Feds to Offer Prize Competitions

December 29th, 2010 | Sources: Wall Street Journal, whitehouse.gov


Lost amid coverage of the repeal of Don’t Ask Don’t Tell and passage of a new START treaty, the lame-duck Congress passed the America Competes Act last week. Although the move didn’t receive much coverage by the press, it is quite significant in its own right.

In what could turn out to be a decisive move in the effort to leverage American ingenuity and innovation, America Competes empowers all federal agencies to sponsor prize competitions to spur innovation, solve their most difficult problems, and advance their missions.

Prize competitions have been shown to be effective as a strategy to energize our nation’s innovators. The private sector and philanthropists use them quite often. According to a study by McKinsey  in fact, more than 60 prizes valued at $100,000 or more were introduced by such organizations between 2000-2007. Total prize money associated with these competitions approached $250 million.

Perhaps the best known among these are the competitions sponsored by the X Prize Foundation, a nonprofit organization that works with philanthropists and the private sector to foster innovation by offering enormous cash prizes to those who solve key technological challenges. In September, for example, it awarded a $10 million prize to 3 teams who created a production-ready car that got 100 miles per gallon (or an energy equivalent).

The X Prize Foundation has established similarly sized prizes for groups that achieve specified cost and speed targets in the area of gene sequencing, and a $30 million prize for the first private group that lands and operates a rover on the moon.

And as Eric Hintz points out, America Competes is not the first example of government-sponsored innovation challenges. In 1714, Hintz writes, the British Parliament offered prizes to those who would develop a means to calculate longitude at sea. It took awhile, but eventually John Harrison won nearly £14,315 for his marine chronometer. And in 1800, the French government created a Food Preservation Prize as a means to help supply food to Napoleon’s army. A decade later, Nicolas Appert won 12,000 francs for a vacuum-packing process, that is used for canned foods to this very day.

Until now however, the federal government had not implemented a prize-oriented open innovation strategy

But, as summarized in a post by Tom Kalil and Robynn Sturm on the Open Government Initiative blog, President Obama triggered momentum to change that when he floated the idea as part of his 2009 proposal titled, Strategy for American Innovation. Then, 6 months after a March, 2010 memo from the Office of Management and Budget confirmed the Administration’s commitment to the new approach, the White House and the General Services Administration “launched Challenge.gov, a one-stop shop where entrepreneurs, innovators, and citizen solvers can compete for prestige and prizes by providing novel solutions to tough national problems, large and small.”

In just 3 months since the launch, Challenge.gov helped 27 federal agencies release 57 challenges on topics ranging from childhood obesity and Type 1 Diabetes to advanced vehicle technologies and financing for small businesses.

Frankly, I can’t remember a more creative, dynamic initiative coming out of Washington. Innovation is in this country’s DNA. It has helped make our country great. In today’s increasingly competitive global economy, we need it more than ever. Moreover, prize competitions, whether sponsored by governments or other entities, do work. They allow sponsors to exponentially increase the number and diversity of people that are focused on the toughest of challenges.

And as Hintz said, the sponsor pays only for positive results. Nice work, fellas!


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