Under ordinary circumstances, the Xprize staff tries to tackle specific problems for which their organization can offer something that traditional funding instruments cannot. “Normally, our prizes are very long-term competitions and not focused on immediate needs,” says Xprize CEO Anousheh Ansari. “And we usually try to go where there is a market failure—whether due to lack of awareness or lack of policies or lack of investment, there is no incentive for teams or companies to work on those types of solutions.”
Historically, this approach has led Xprize to embrace dramatic challenges with long-term consequences: private space travel, carbon capture, water scarcity. For example, in 2018, the Water Abundance Xprize honored a couple who designed a system to extract large volumes of water from the air; currently, the NRG Cosia Carbon Xprize is evaluating projects that transform atmospheric carbon into usable objects. It is precisely these problems, with their enormous effects on human life, that traditional funding mechanisms are ill-equipped to handle, Ansari believes. “The return on investment may take 10 years or more, and some investors are not ready for this type of investment,” she says. As a charity that doesn’t directly profit from the innovations it supports, Xprize can swoop in where firms fail.
But the Rapid Covid Testing competition is not a typical Xprize, because an ongoing pandemic is not a typical problem. There is no obvious market failure in the case of Covid-19 testing—any institution would jump at the chance to purchase a quick and easy test for the novel coronavirus, so there’s plenty of demand. “I would think that if you had a sophisticated biological laboratory, there’d already be a lot of incentive to do this,” says Joel Best, a professor of sociology and criminal justice at the University of Delaware who has studied the role of prizes in contemporary life. “If somebody can devise a better Covid test,” he continues, “they are in line to make a lot of money anyway.”
And Covid-19 testing is a very different problem from blue-sky objectives like longitude measurement or autonomous vehicles. Whereas the competitions in pursuit of those goals lasted years, even decades, the pandemic is measured in months, and its problems can whipsaw the world in matters of weeks or days. “I wonder if all these competitions that were launched will produce results early enough to be used for this pandemic,” says Luciano Kay, a research associate at UC Santa Barbara’s Institute for Social, Behavioral, and Economic Research who has researched how prize competitions can spark innovation. “We don’t have much time to wait for a solution.”
In other words, there is no guarantee that competitions will make a difference in this crisis. “Not everything is suited to prizes,” says Jerome Davis, professor emeritus of political science at Dalhousie University and another prize competition expert.
Even so, Ansari feels there is a role for Xprize here. “There was a need to push things a little bit harder, to make them go where we need them to go faster,” she says. And Kay points out that the unique structure of competitions could facilitate discoveries that may not have been possible otherwise. “The lack of upfront funding actually triggers a lot of innovation,” he says. “People need to find a solution that is simpler, that is cheaper, that you can build really quick without all the traditional financial overhead.”