The oil and gas industry cannot thrive without technology, and technology cannot be developed without innovation. But what, exactly, is innovation?

Peter Diamandis, chairman and CEO of the X PRIZE Foundation, has grappled with this concept since his dream of becoming an astronaut was stalled when the US abandoned its manned space flight program in the 1970s. He decided to investigate the idea of private space flight.

“The idea was to have innovation be driven by competition,” Diamandis told a gathering at the recent Shell Innovation Summit. He proposed a competition that would award US $10 million to a team that could build a spacecraft that could carry three adults into space.

It took Diamandis six years to raise the money, but in the end 26 teams competed.

This approach differs from normal R&D, he said, because it incentivizes nontraditional players to innovate. “We look at where there are market failures,” he said.

What Diamandis considers a “market failure” would be considered by most others to be a “serious global issue.” Some of the recent X PRIZE challenges have included developing a car that gets 161 km (100 miles) to the gallon, a handheld device that can diagnose a patient as accurately as a team of specialists, and a map of the ocean floors. One recent challenge was to double the rate at which an oil spill can be cleaned up from a body of water. More than 300 teams signed on for the initial competition; this was later narrowed to 10. Seven of the 10 teams managed to double the rate, and the winning team increased the cleanup time 600-fold. “One team met in a tattoo parlor in Las Vegas,” Diamandis said. “Some of these people come from very unusual places.” So what is it that drives X PRIZE winners to innovate? The $10 million prize is no doubt a significant motivator. But Diamandis thinks there is more to it than greed. “It’s tied to passion, to trying to make a difference,” he said. “Everything that fuels these people comes from their hearts and souls. By the time they make a breakthrough, they will have been told ‘no’ a thousand times. “Innovation requires absolute persistence,” he added. “Everything is impossible until you make it happen.”

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