# What is the return on investment of using prizes to promote R&D
**URL:** https://boards.straightdope.com/t/what-is-the-return-on-investment-of-using-prizes-to-promote-r-d/525821
**Category:** Factual Questions
**Created:** [January 21, 2010, 9:56am UTC](https://boards.straightdope.com/t/what-is-the-return-on-investment-of-using-prizes-to-promote-r-d/525821 "2010-01-21T09:56:57Z")
**Posts on this page:** 4
**Page:** 1
### Author:  [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)
#### Post date: [January 21, 2010, 9:56am UTC](https://boards.straightdope.com/t/what-is-the-return-on-investment-of-using-prizes-to-promote-r-d/525821/1 "2010-01-21T09:56:57Z")
To win the Ansari X prize of $10 million, which was devoted to inventing a spacecraft that could travel into space two times in two weeks, about $100 million was spend on development of that spacecraft from various organizations and groups. So the prize terms were ‘invent X and win $10 million’. And $100 million was devoted to winning that $10 million.
> **[Ansari X Prize](https://en.wikipedia.org/wiki/Ansari_X_Prize)**
>
> The Ansari X Prize was a space competition in which the X Prize Foundation offered a US$10,000,000 prize for the first non-government organization to launch a reusable crewed spacecraft into space twice within two weeks. It was modeled after early 20th-century aviation prizes, and aimed to spur development of low-cost spaceflight.
> Created in May 1996 and initially called just the "X Prize", it was renamed the "Ansari X Prize" on May 6, 2004 following a multimillion-dollar donation from entrepre...
So is there a general multiplier effect when it comes to prizes devoted to innovation (ie, every $1 in prizes results in $5 or so in research and development), or does it vary dramatically by field, the size of the prize, marketing, etc?
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### Author:  [@dracoi](https://boards.straightdope.com/u/dracoi)
#### Post date: [January 21, 2010, 5:46pm UTC](https://boards.straightdope.com/t/what-is-the-return-on-investment-of-using-prizes-to-promote-r-d/525821/2 "2010-01-21T17:46:19Z")
In the case of the spacecraft, no one is really interested in the prize. Sure, they’d like to get it, but it is not enough to justify their efforts. They want the prize because it’s a stepping stone to being the commercial leader in a whole new industry. In that sense, the $10 million prize is a just a bonus round of capital funding on the way to becoming the next Boeing.
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### Author:  [@WarmNPrickly](https://boards.straightdope.com/u/WarmNPrickly)
#### Post date: [January 21, 2010, 7:05pm UTC](https://boards.straightdope.com/t/what-is-the-return-on-investment-of-using-prizes-to-promote-r-d/525821/3 "2010-01-21T19:05:08Z")
I agree that these prizes are mostly a prestige thing. It’s the contracts and grants that get awarded to the winner that the contestants are after. They could just make the prize the grant/contract, except, I think they probably want to eliminate the possibility of someone winning the prize in a roundabout way that doesn’t really accomplish the intended goal.
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### Author:  [@Stan\_Shmenge](https://boards.straightdope.com/u/Stan_Shmenge)
#### Post date: [January 25, 2010, 8:27am UTC](https://boards.straightdope.com/t/what-is-the-return-on-investment-of-using-prizes-to-promote-r-d/525821/4 "2010-01-25T08:27:14Z")
Well, they could be a lot more than just a prestige thing if they had some real money behind them. Jerry Pournelle is proposing [substantial prizes](http://www.jerrypournelle.com/archives2/archives2mail/mail242.html#prizes) for space technology milestones, and I think he has a good plan.