I am in favour of an increased use of prizes to motivate innovation. From Slate, some fairly convincing arguments that some prizes may not be up to scratch. In this case, it is a $1m prize for substitute chicken meat:
So what’s wrong with the PETA prize? You need to sell your product in order to win. According to the contest guidelines (PDF), the million-dollar meat must be available in stores to qualify for the cash. Fake-chicken entrepreneurs have to demonstrate a “commercial sales minimum” at a “comparable market price”; in plain English, they need to move 2,000 pounds of the stuff at supermarkets and chain restaurants spread out across 10 states during a period of three months. And the Franken-meat can’t cost more than regular chicken.
That means PETA won’t be content with any intermediate (and not immediately profitable) breakthrough, like the development of lab-grown chicken that tastes as good as the natural stuff. Instead, the organization will hold the purse until a “commercially viable” product hits the market. In other words, you can’t win the $1 million unless you’re already in position to make a profit. At that point, a science prize doesn’t provide much incentive for innovation. It’s more like a small bonus.
The good news, of course, is that if you get the terms of a prize wrong all that happens if nothing. Pick grant and subsidy winners wrong and you still have to pay.