On this day, 164 years ago, James Marshall discovered gold at Sutter’s Mill in Coloma, California.  In Carey McWilliams’ apt phrase, the ensuing Gold Rush “got California off to a flying start, and set in motion its chain-reaction, explosive, self-generating pattern of development” according to a simple, even magical equation: “gold equals energy.”

From computer chips to wonder drugs to the silver screen, California’s boom economy has brought the world innovation after innovation.  Each boom has fed into the next, as dreamers from around the world have come to California chasing the “Next Big Thing,” creating countless wealth and well-being in the process. Yet with our state’s current crisis, why not work to reinvigorate this process?

The X Prize Foundation has created multimillion dollar prizes for paradigm shifting advances in human innovation – such as the Asari X Prize, awarded in 2004 to Mojave based Scaled Composites as the first private enterprise to launch three humans into space twice in two weeks.

The currently outstanding prizes total a little over $60 million and include such advances as a technique to cheaply sequence the human genome, a hand-held “tricorder” that creates a dashboard for an individual’s health, and a production ready 100 mpg car.  The region that pioneers these advances will reap the fruits for years to come – witness Silicon Valley.

So why not offer to double the prizes if the winning organization is based in California?   Each of these technologies would have the potential to create or reshape entire industries, and the small amount of money needed would only be awarded after the winning organization had created tremendous human and intellectual capital.

Moreover, this sort of policy is not picking winners and losers. Rather, increasing the prize money available to California based organizations simply incentivizes productive risk-taking and recognizes the long-run value such innovation has to our state.

Such a policy would demonstrate the state’s commitment to our vaunted knowledge economy and help to break the pernicious narrative that California is somehow on the road to becoming a failed state.  And fertilizing our innovation ecosystem will pay dividends regardless if a California organization ends up winning. A failed invention for a new strong adhesive became the monumentally successful Post It note.

Our state has moved beyond the natural resource economy that underlay the 1849 Gold Rush.  Yet Carey McWilliams’ magic equation still resonates.  The forty-niners and entrepreneurial innovators ultimately hunt the same thing: a dream, an idea that California is where you go to do big things.

Why not prove the declinists wrong once again?  Why not create a simple, no regrets policy to help ensure that California is the pioneer of humanity’s next great innovation?