Why innovation prizes fail

Innovation prizes aren’t hard to come by. Last year Elon Musk announced $100 million to come up with ways to remove carbon dioxide from the atmosphere. The year before, Prince William and David Attenborough announced an annual £1 million Earthshot Prize for solutions to environmental problems. This year, no doubt, will herald another headline-grabbing announcement. 

But do such prizes actually work? The lessons from history are far from straightforward, but there are many for would-be creators of modern innovation prizes to learn.

Many innovation prizes draw their inspiration from an 18th-century prize for discovering how to determine one’s east-west position on the globe, or longitude, while at sea. Such a discovery had huge implications for navigation, as knowledge of one’s longitude could be a matter of life and death. In 1707 some 2,000 sailors were killed, including the chief admiral of Britain’s Royal Navy, when a fleet mistook its course home and struck rocks off the Isles of Scilly.

In 1714 the mathematicians William Whiston and Humphrey Ditton successfully lobbied Parliament to offer a reward for solving the longitude problem, and then spent much of the following decades trying to win it. Their earliest proposal was for ships anchored at fixed longitudes to essentially shoot fireworks at certain intervals, like a sort of lighthouse. Ships passing by might then calculate their longitude from comparing the difference between seeing and hearing the flashes (a mechanism quite similar, in principle, to modern GPS). Along with other longitude searchers, Whiston also investigated exploiting the Earth’s magnetic variation – he and the astronomer Edmond Halley produced some of the earliest maps with isogonic lines, which indicate the pattern of where compass needles dipped. Magnetic declination, as it was called, promised to provide sailors with a hitherto hidden geography of ‘landmarks’ in the middle of the ocean from which to gain their bearings.

But the best-known solution came from the clockmaker John Harrison. His solution exploited the principle that longitude is measured according to the circuit of the Earth around the sun each day, subdividing the globe’s 360 degrees into 24 hours. At the equator, for example, to be 15 degrees of longitude west of a place corresponds to the sun rising one hour later. Noon in the English city of Bristol – that is, the moment when the sun is highest in the sky – is actually 10 minutes behind London. We no longer think of it this way because of the invention of time zones, which were only developed later on to simplify railway timelines. If one could construct a clock accurate enough to always tell the time at a specific point of departure – despite the rocking, rolling, and atmospheric changes of the seas – then sailors could calculate their longitude by simply comparing its time with the time wherever they were. Starting in the 1720s, Harrison developed just such an accurate timekeeping device, known as the marine chronometer. 

Harrison has become so famous, however, because his life seems at first glance to have all the elements of a gripping yarn. He was a humble artisan who found a technological solution to a problem that the gentleman scientists had struggled with for decades. And the Board of Longitude, which judged the prize, never gave him the full reward – ostensibly because of the villainy of one of the board members, Astronomer Royal Nevil Maskelyne, who had another preferred solution. We thus have a compelling rags-to-riches story of a wronged inventor humbling the scientific snobs: the king eventually intervened, overseeing experiments of his own, to ensure that Parliament gave Harrison his due.

His story has become the subject of countless articles, podcasts, videos, books, and even a TV miniseries, while the prize itself has become the model way to solve the world’s grand challenges. In 2014, to commemorate the prize’s tricentenary, British taxpayers funded a new (and as yet unclaimed) Longitude Prize of £8 million, administered by the innovation foundation Nesta, to whoever could develop an accurate and affordable means of diagnosing bacterial infections, with the goal of slowing the evolution of antibiotic resistance. Last year, too, Amazon funded a more general Longitude Explorer prize at Nesta to reward the ideas of inventors aged 11 to 16. 

The creators of modern prizes seem to draw a number of lessons from Harrison and the Longitude Prize. They expect prizes to prompt radical solutions to age-old problems – to capture ideas from well outside the box. Some of them expect the prospect of headline-grabbing rewards to excite ordinary members of the public to suddenly have a go at becoming innovators. And even if they wouldn’t go quite so far, they expect their prize to direct innovators’ attention toward solving their particular problem.

But, for all its acclaim, the popular story of Harrison and the Longitude Prize is beset with myths. For a start, the supposed villain of Harrison’s story, Neville Maskelyne, should really be thought of as a hero in his own right. He tirelessly devoted his life to science and the improvement of navigation, undertaking a journey to the mid-Atlantic island of St Helena to try to observe the transit of Venus – an extremely rare chance to determine the size of the solar system – and testing out proposed solutions to the longitude problem along the way. He personally traveled all the way to Barbados to provide a benchmark calculation of longitude against which to test Harrison’s device, and later even took a break from his prestigious job as Astronomer Royal to spend over four months atop a miserable, rainy mountain in the Highlands in order to measure the Earth’s mass. This was no fusty or dismissive gentleman, but an energetic man almost 40 years Harrison’s junior who rolled up his sleeves and did things himself.

Maskelyne’s skepticism of chronometers was not the product of jealous snobbery. He wanted more data before its accuracy could be definitively accepted. And he knew, from personal experience, that a much cheaper, better-tested, and unfailingly reliable solution to the longitude problem had already been found.

The solution Maskelyne had tested on his expedition to St Helena was to measure the complicated movements of the moon against predictive tables, painstakingly computed by the mathematician Tobias Mayer. These tables were the culmination of centuries of work by astronomers and mathematicians, and where a chronometer might break down, there was nothing more reliable than the heavens themselves. At Maskelyne’s instigation, the Board of Longitude turned its energies to computing and publishing the lunar tables in The Nautical Almanac – a navigational aid still being produced and published today. (Indeed, the task of calculating the lunar tables gave rise to “computers” – the profession, not yet the machine – and eventually led a frustrated Charles Babbage, who noticed too many errors for his liking, to explore how such calculations might be done mechanically instead.)

But the myths about the longitude story go much deeper. Modern innovation prizes appear to have been based on a fundamental misunderstanding of how the 1714 Longitude Prize worked.

When Whiston and Ditton first petitioned Parliament to create the prize, it was with a view to getting rewarded for making their own GPS-like fireworks solution public. The lunar method, the magnetic declination method, and even the chronometer method were actually extremely old ideas as to how to solve the longitude problem, long pre-dating Maskelyne or Harrison. They just required a lot of effort to put them into practice. As Isaac Newton put it, these ideas were “true in the theory, but difficult to execute”. Whiston and Ditton, with their proposed solution, were thus positing a novel theory, which they knew would then require quite a lot of effort to put into practice. So when Parliament considered how to respond, they chose a methods-neutral approach to granting the rewards, specifying that the reward would be granted based on results – finding longitude at sea to particular degrees of accuracy. They allowed for the ancient theories to eventually be made practicable while also leaving open the possibility that, as Whiston and Ditton had demonstrated, someone might come up with an entirely new approach. 

What this reveals, however, is that the Longitude Prize was not just a general appeal for new solutions to a knotty problem, as so many innovation prizes are today. Its designers actually already knew the most likely approaches to finding longitude at sea. The real problem, as they saw it, was that inventors had very little to gain from concentrating their efforts and making their specific solutions public. To “discover” longitude had a dual meaning. It was not just a matter of finding it, but about disclosure. The aim of the rewards was to coax secrets out into the open.

But that was not all. Plenty of Longitude Prizes had been instituted before – in Spain, the Dutch Republic, and France. Even in England, people had already been actively searching for a solution for decades. When the Royal Society was founded back in 1660, its first task from the newly restored king Charles II was to pursue the magnetic declination method. In the 1670s, too, the government promised large sums to Robert Hooke to disclose potential chronometer improvements. Ineffective innovation prizes were thus common, just as they are today.

What made the 1714 prize so different was that it was not, strictly speaking, just a prize. The real problem it solved was not one of rewards for new ideas, but of the cost of implementing them.

When Parliament passed an act in 1714 “for providing a public reward for such person or persons as shall discover the longitude at sea”, it inadvertently created an organization that would become much more akin to a modern scientific grant-making foundation than a prize. The act created a committee of various experts and officials who were to administer earmarked funds. This Board of Longitude, as it later came to be known, was empowered to judge and bestow the gigantic headline prize of £20,000. But it very quickly became clear that the headline prize was ineffectual. It took 23 years of individually rejecting over a hundred low-quality proposals before the board even bothered to formally meet.

When it did finally meet, it was to make use of a much smaller budget that Parliament had given it, to award to applicants to develop promising ideas. John Harrison, far from being an inventor ignored by jealous gentlemen scientists, was the first such grantee. He would continue to be funded by the board for the next three decades. Harrison was only able to make the chronometer method practicable thanks to this steady flow of funds. As the original act rightly noted, the real barrier to discovering longitude was not just the lack of eventual rewards, but the “want of money for trials and experiments”.

Over the following decades, the board gradually grew into its role as a grant-making research agency, more like a navigation-themed version of DARPA or the National Institutes of Health than an XPRIZE. It gradually acquired the power to fund coastal surveys by Whiston and John Bradley – it was essential that the precise longitudes and latitudes of dangerous rocks and landmarks be known – and gave smaller rewards to recognise the foreign developers of the lunar-distance method. After half a century it even got a salaried secretary to manage its affairs, and was soon funding the annual testing, computing, editing, and publishing of The Nautical Almanac. 

And it didn’t stop there. The Board of Longitude funded clockmakers to improve Harrison’s chronometer and make it cost-effective, as well as to improve other navigational instruments. It even sent astronomers to the Arctic, western Canada, and Australia to take new longitude measurements and conduct more tests of the newly improved longitude-finding methods. In the 1820s, long after Harrison and Maskelyne were dead, the Board of Longitude funded the improvement of glass for telescopes, as well as a project to remeasure the exact distance between the observatories at Greenwich and Paris – an important exercise to sync up the mapmaking achievements of Britain and France.

The legend of Harrison has thus obscured some important lessons about innovation prizes. To the extent that the Board of Longitude was a prize-granting body at all, it was effective because it found a niche for something where a range of possible methods had already been worked out, but where there were still many problems of implementation. Accurately finding the longitude at sea was much like the modern challenge of accurately predicting the three-dimensional shape of a protein from its amino-acid sequence – something with huge implications for medicine. Potential methods for protein prediction had already been sketched out, but it was a matter of fine-tuning their implementation and applying the latest advances in computation. And since 1994, a biannual competition to predict proteins, Critical Assessment of protein Structure Prediction (CASP) has yielded dramatic improvements. Having defined a precise niche, and by setting out clear benchmarks for improvement, the competition has been a major success even without a major cash prize to back it up – the winners mainly get a bit of prestige. It shows the importance of simply publicizing a problem the right way.

This is not to say that money for invention doesn’t matter at all. It surely does. But even then, the main impact of the Board of Longitude’s funds came from their series of smaller developmental grants, not the headline-grabbing promise of vast riches. Perhaps the headline figure helped a little in turning some inventors’ minds to the longitude problem, but the Board had to wait 23 years for a worthy competitor to turn up. It had to wait 41 years before the breakthrough improver of the lunar distance method, Tobias Mayer, sent word of his achievements to Britain.

The lesson here for those endowing these innovation prizes is either that they should be extraordinarily patient, or that the headline figures simply aren’t that effective. We don’t know enough about Harrison’s early life to tell for sure, though he was seemingly tinkering with clocks for over a decade before he approached the board. As for Mayer, he never even experienced the excitement of the 1714 announcement of the prize, as he would not be born for another nine years. When he did send word of his achievements to Britain, it was to the Admiralty rather than directly to the Board of Longitude, and only after the continual urging of his friends. Given the seemingly limited effect even back then, we should also bear in mind that an innovation prize today will now have to compete with many more for attention – unless the amounts are truly mind-boggling.

Regardless, prize designers need to bear in mind that diverting innovators’ attention implies directing them away from something else. Innovators are still very rare, and there’s no evidence at all to suggest that the announcement of prizes causes ordinary people to suddenly become innovative out of nowhere. Eventual prize-winners are overwhelmingly people who had already been putting their heads and hands to solving other problems. It is possible that the existence of prizes in general, rather than a specific prize, perhaps creates a very general perception in society that becoming an inventor is a viable career path with high potential rewards. But even if that is the case, it suggests a negligible impact of adding an additional innovation prize to an already-crowded field. Money to spend on encouraging innovation is probably better spent another way.

Innovation prizes are by no means wholly ineffective. But the effective ones are unlikely to make the news – much like all of the Board of Longitude’s lesser-known achievements. The prizes that can identify a very specific niche are much more likely to have an impact – especially if they can fill a gap that no existing support for innovation can fill. Innovation prizes are sometimes compared to patents, for example, but the parallel is poorly conceptualized. Effective prizes are not substitutes for patents, but complements, filling in the gaps of what they fail to incentivise.

Take the premiums offered from the mid-1750s by the London-based Society for the Encouragement of Arts, Manufactures and Commerce (which survives today as the Royal Society of Arts). The Society of Arts eventually instituted a ban on rewarding patented inventions. This was not because they didn’t want people to take out patents, but because they didn’t want to reward inventions that would have appeared anyway thanks to the incentives already being provided by the patent system. It did not want to waste its limited funds incentivising something that had already been incentivised. It sometimes advertised ‘premiums’ – cash prizes or honorary medals – for solutions to specific problems, but increasingly offered ‘bounties’ for unsolicited inventions. It very quickly found that the no-patent rule was sufficient, without specific advertisements, to attract the right kind of inventions.

The Society of Arts thus mainly rewarded advancements that were not patentable at all, like agricultural techniques or semaphore systems, or advancements that were not worth patenting because they were insufficiently profitable: inventions that saved lives or remedied some social ill. It awarded a bounty to Henry Greathead, one of the inventors of the lifeboat, as well as awarding a medal to John Hessey Abraham for a magnetic apparatus to prevent metal dust getting into the eyes and lungs of workers employed in grinding the points of needles. One of the society’s most significant advertised premiums was for a technological replacement for the use of children to clean chimneys. The eventual winner, George Smart, may not have received widespread fame then, and is not considered one of the great inventors of the Industrial Revolution – he has no more than a stub on Wikipedia, and only because I’ve written about him before. But his invention made possible many of the Victorian child labour laws, alleviating untold suffering.

There are two lessons that innovation prizes should thus take to maximize their impact: One approach is to be like a better-funded version of CASP, the protein-folding competition: identifying specific niches where we have a general idea of how problems can be solved, but where the challenge is to fine-tune the implementation. We know, for example, in general terms how to reduce carbon dioxide emissions. But implementing solutions and increasing their efficiency is difficult. Although there are a host of very general headline-grabbing prizes for out-of-the-box ideas that could reduce carbon emissions, the lesson from both CASP and the Board of Longitude is that prizes work best if they instead narrow their scope to, say, specific industries and reward people for meeting certain carbon-saving benchmarks. Just as Harrison unlocked successive waves of funding from the Board of Longitude for his chronometers meeting certain milestones, modern prizes should be focused on both the implementation and the continued improvement of ideas.

The other lesson is to find problems that are not already being addressed by existing innovation-supporting institutions, using the prize to draw some specialist attention to them and provide rewards where they otherwise would get none – the approach of the Society of Arts. Such prizes might include, for example, ones for research investigating the medical effectiveness, to certain standards of rigor, of existing foods, drinks, or off-label medications. No pharmaceutical company has an incentive to investigate the properties of green tea, for example, or of activated charcoal – they have been in use so long that they are impossible to patent. And funding for such studies from universities and other grant-making bodies is sporadic, as well as subject to the distortionary pressures of academic publishing, favoring the investigation and publishing of only the most unusual or exciting results.

The best prizes have shunned the spotlight and found their ultra-specific niche, incentivising innovations that nobody else could. It is better to change the world quietly than not change it at all.