Reading, Rockets and ‘Rithmetic (Ep. 9)
Reading, Rockets, and ‘Rithmetic: When is the federal government not like the federal government? When it launches a Race to the Top.
Our latest Freakonomics Radio podcast looks into the Race to the Top education-reform program. (You can subscribe at iTunes, get it by RSS feed, read the transcript, or listen live via the box above.) We argue that the U.S. Department of Education is acting a bit more like a venture capitalist than we’re used to — and that that’s probably a good thing.
Race to the Top is awarding $4 billion in prize money to state education departments to reward reform but also to seed further innovation. It thrives on two elements that government bureaucracies don’t usually employ: competition and experimentation.
So we ask Arne Duncan, the Secretary of Education, where the idea came from — and whether it was a tough sell, and what kind of results he’s seen so far.
You’ll also hear from some private-sector folks who paved the way for Race to the Top. One of them is Craig Nevill-Manning, an engineering director at Google New York. He’ll tell the story of one of Google’s most interesting (though not widely known) practices called “20 percent time,” and how it led to Google breakthroughs that might otherwise have lain unborn. You may even be typing into one of them right now.
As interesting as Nevill-Manning and Duncan are, the star of the episode is Peter Diamandis. As a kid, all he wanted to do was go into space. Things looked promising: he was born in 1961, just as NASA was flexing its considerable muscles. But as Diamandis aged, so did NASA, and it became less ambitious. He realized that relying on the government to push forward with space travel was a losing bet.
So he decided to do something about it. Inspired by the Orteig Prize, whose $25,000 tempted Charles Lindbergh to fly across the Atlantic Ocean, Diamandis founded the X Prize. Its initial offering: a $10 million prize for the first private team who could build and launch a vehicle that could carry three people to 100 kilometers above the earth. And then do it again, within two weeks. It worked.
That was in 2004. Just last month came the second X Prize: three teams who split another $10 million for building safe, reliable cars capable of traveling 100 miles on a gallon of gasoline, or gas-equivalent energy. The car prize money was put up by Progressive Insurance, the space-travel prize by the Ansari family.
The X Prize Foundation is not alone. According to a recent McKinsey & Co. report called “And the Winner Is …,” more than 60 prizes of at least $100,000 have been launched since 2000, representing nearly $250 million in prize money. Furthermore:
Before 1991, 97% of the value of the big-prize purses that we analyzed was dedicated to awards that recognize prior achievement, such as the Nobel and Pulitzer Prizes. But since 1991, 78% of new prize money in this data set has been dedicated to inducement-style prizes that focus on achieving a specific, future goal.
As Peter Diamandis sees it, most big institutions just aren’t inclined toward major-league innovation:
In a government situation, if you tried a bold, crazy idea and it blew up in your face, there’d be a Congressional investigation. In a large corporation, if you did that, there’d be a stock price plummeting. So, really, crazy ideas are in the purview of small companies, entrepreneurs who are willing to risk everything to make their dream come true, literally their lives, their fortunes. And we’ve seen that in our X Prizes where people have mortgaged their homes, or lost their marriages, or risked their lives.”
So this style of innovation may not be for the faint of heart. But in a world where problem-solving is often an exercise in political charades and hyperbolic idiocy, we say: bring on the bold, crazy ideas! And if the government wants to get involved, all the better. (Granted, it’s a bit easier to hold big competitive experiments when you can raise $4 billion in prize money just by dipping into the tax coffers.)
As with any experimentation, there will be lots of failures. (See you at the Congressional investigations!) But if the X Prize, Google and Charles Lindbergh are any indication, Race to the Top at least has a chance of helping a few million schoolkids learn how to fly.