Instead of a bailout: and open-source A-Prize

I was inspired by a Facebook back-and-forth today about the big 3 bailout. My friend Matt made an excellent point -- wouldn't the $14-25 billion be better used toward creating a new auto company or technology, rather than propping up the old?

Indeed it would. In fact, we'd get a lot more bang for the buck if just a portion of that -- say $1,000,000,000 -- were dedicated toward a new "A-Prize", modeled after the X-Prize.

The basic idea is that a very large prize is awarded to the first person(s) to create a new technology which passes a set of performance goals. For cars, I would suggest it be a formula that considers eco-efficiency, cost and availability of fuel. Something combining "x emissions per mile" with "$y per-car and per-mile" with "z years of available fuel". I leave it to a greater mind to find the right equation (perhaps in the comments).

Let's go further -- maybe the first two or three to achieve the goal would split the prize, with the hope of a diversity of solutions. Or we simply give $1B each for the first three, unique technologies

The catch would be: in exchange for the big $$ up front, the newly-developed technologies would be patent- and royalty-free. This could spur the whole industry to adopt the technology.

Further: while the technology would be public domain in the US, it would not be exportable. Any company manufacturing in the US could use it, thus encouraging more of the world's firms to build plants here. (We'd need some sort of international intellectual property protection, perhaps through the WTO.)

I think this is a combination of free-market entrepeneurialism with political pragmatism. Normally, I would like the developer of such technology to enjoy its fruits long into the future, so the forfeiture of intellectual property is not my normal instinct. But any private investor could offer such a prize, without such strings -- indeed the X-Prize folks are doing just that.

This would unleash the self-interested entrepeneurs while also "protecting" an American industry. Right and left could be satisfied. Thoughts?

Comments

[Mike Fabio]

The Progressive Insurance Automotive X PRIZE (like all X PRIZEs) aims not just to incentivize technology breakthroughs, but to build an entire industry. Just as the aviation industry was built on the Orteig Prize, or the personal spaceflight industry is being build on the Ansari X PRIZE, the automotive industry of the future will hopefully be built on an X PRIZE.

I couldn't agree with you more: stop bailing out old technology, and put incentive into new.