Aneesh Chopra, Obama’s Chief Technology Officer, Talks About Health IT Geek Squads, Entrepreneurship Prizes, and “Data as a Policy Lever”

10/7/10Follow @wroush

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qualified, all for $60,000. The money isn’t the point.

X: Well, that’s my question. Whether there is a huge prize or a little prize, there is only one winner, generally. From one perspective it seems like an inefficient way to allocate resources, because in the end the competition only has one winner. Only one team winds up getting the resources to really go and build their technology, and everybody else who put in all that work gets nothing. But you’re saying there is this larger effect.

AC: Well, it’s funny. You’re making an efficiency argument, and it’s actually quite the opposite. You’re paying for results. So, in the case of the Automotive X Prize, there is a specific result you are looking for—a car that can go a hundred miles per gallon. So that specific goal, you are going to put money towards it. What we normally do in R&D is we fund ideas that we think have merit, if the person passes scientific peer review. So the R&D investment is really about betting on the person, and hoping that they can thrive. And there’s room for that in the portfolio. What we’re saying is, it’s not an either/or. In the portfolio of approaches to drive breakthroughs and innovation, a component should be prizes and competitions.

We do think the focus on results makes it a higher return on investment for taxpayer dollars because the likelihood you are funding no result doesn’t exist, because then you wouldn’t award the prize. We also think that there are spillover benefits. So in the most recent X Prize for automobiles, the winning team was from Lynchburg, Virginia, but one of the most inspiring teams was the West Philly inner city school kids, who made it all the way through the round of 12 or 10 or whatever it was, and just didn’t make it to the final lump. But they have gotten such support! They’ve gotten publicity and attention and sponsorship. So, they win too. And who knows what those individual team members will do in their future. So society benefits from their having participated, even if they didn’t win.

It all depends on the outcome goal you are trying to achieve. If you are trying to hit a particular price per unit of service, then you’ve got a rigid construct. But if you are trying to tap into creativity, you don’t really care to have one winner. Our Apps for Healthy Kids was $60,000. We divided that up into $10,000, and $5,000, and $3,000 chunks so we ended up giving 12 prizes. In each individual example we gave a very limited amount of money—but they didn’t need the money. They wanted the chance to participate.

X: So we’ll see more of those kinds of competitions.

AC: Yes. Tons more. That’s my job.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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