Finding a new and better solution for an everyday problem is the goal of many visionary entrepreneurs. But most of the imaginative proposals that I receive every day from idealistic business leaders who hope to address our society’s greatest challenges, such as climate change and protecting the environment, require massive investment, with years of research and development before launch. How to finance such ventures, most of which will not bring immediate gains?
Over the past few centuries, many governments have offered prizes to encourage people to tackle the most pressing technical problems of their time. My favourite example is the Longitude Prize – a 20,000 pound award established by the British government in 1714 to prompt scientists and navigators to look for a more accurate way for ships to determine their position east or west of a fixed point on the globe. More than 10 inventors received grants through the Longitude Prize over the next 50 years for their contributions to the solution; the main winner was John Harrison, inventor of the marine chronometer.
Today most of our challenges are so complicated that they require truly enormous investments of time, effort and capital. The Ansari Space X Prize, at $10 million the largest such award in history, was won in 2004 by Scaled Composites, led by engineer Burt Rutan, for building and launching SpaceShipOne – a craft capable of carrying passengers to 100 kilometres above the Earth’s surface twice within two weeks. The teams chasing the $10 million prize collectively spent more than $100 million.
And in the end, that prize was the catalyst for the founding of a commercial space sector. I was so impressed by the achievement that the Virgin Group established a new space tourism business, Virgin Galactic, and sealed a deal with Scaled Composites to build a launch system and space ship for our operation, thus taking a prize concept and using it for a commercial venture. Virgin Galactic and other companies joined the space race – a field in which previously only government agencies had competed.
Climate change has the potential to destroy ecosystems and impact the lives of billions. It is the responsibility of business to contribute solutions, since industry has been historically a part of the problem, and so in 2007 our group decided to launch the Virgin Earth Challenge to promote the invention of technologies that remove greenhouse gases, especially carbon dioxide, from the atmosphere. The winner must demonstrate a safe, scalable and commercially viable design to take man-made greenhouse gases directly out of the air at the rate of 1 billion metric tons per year. To put that figure in perspective, total carbon emissions from all human activity add up to about 8 billion metric tons per year.
We received more than 2,500 entries from all over the world, ranging from wildly optimistic concept papers to proposals from accredited scientists conducting tests on carbon storage technologies. None appear likely to reach commercial viability soon; there is a lot of work ahead if we are going to develop sustainable businesses in this field. Indeed, as one scientist told our Earth Challenge team, all the investments on carbon capture and storage research to date probably do not match the $25 million prize.
That said, with so many power stations, factories, cars, livestock, ships, aeroplanes and so forth – the list is long – pumping all that carbon dioxide into the atmosphere every year, the goal of taking 1 billion tons back out is ambitious, but not impossible. Our entire society needs to undergo a series of fundamental changes to cut carbon emissions from everyday life. Virgin businesses are starting at home by addressing their own sustainability issues, examining every process for opportunities to reduce, reuse and recycle.
Our prize will only be effective if it is part of a wider system of support for development in this field that can get ideas from the “eureka” moment to fully functioning operations. We have made a large investment via the Virgin Green Fund to back pioneering companies working on biofuels, solar energy, and energy-saving technologies. We have also provided financial backing for the Carbon War Room, which is highlighting ways for businesses to get involved in the fight against greenhouse gases and encouraging investors to back green, clean technologies.
The upcoming transformation of our society presents one of the greatest business opportunities of the next 100 years. This will require patience as well as perseverance; to anticipate what’s next and plan for that situation as well as taking advantage of what’s immediately before you. The prize we are offering and our efforts in this field are part of our strategy for this future. What’s yours?