Prizes and challenges are nothing new. The X Prize, for instance, is modeled after the $25,000 Orteig Prize of the 1920's which Charles Lindbergh won by flying from New York to Paris in 1927. Long before that, reported McKinsey & Company consultant Jonathan Bays, who co-authored And the winner is . . . : Capturing the Promise of Philanthropic Prizes (pdf link), governmental and nongovernmental prizes have spurred important innovations. The Longitude Prize of 1714, offered by the British government, resulted in the marine chronometer and drastically improved shipping safety. Napoleon Bonaparte's 1800 food preservation prize resulted in the advent of canning as we now know it.
As Case Foundation CEO Jean Case noted in her blog post and welcoming remarks, the recent growth of social media technologies has led to a renaissance of prizes and challenges amongst the private and philanthropic sectors:
Today’s drive toward transparency, social media and Web 2.0 are enabling this model.
New technologies empower organizations to generate thousands of possible solutions, to enlist a community of thousands to help surface the most worthy ones for more careful consideration, and to build on one another's ideas.
Indeed, the McKinsey study identified more than sixty new prizes of more than $100,000 each having debuted since 2000."The outlook for prizes is strong," reported Bays, "and we expect to see continued growth and innovation."
In addition, increasingly interactive web-based applications have led to the emergence of a new strategy - open grantmaking – that shares; the fundamental idea behind prizes and challenges: to identify problems that need solving, and encourage as wide a range of people as possible to try to solve them, providing incentives for success. For instance the Case Foundation's "Make It Your Own" initiative, a challenge to communities to decide collectively on a community improvement initiative and compete for a number of grants, was mounted in 2007 and used an open comment-and vote system to surface the most promising ideas.
Until recently, the U.S. Government had lagged behind the private and philanthropic sectors in making full use of prizes as vehicles for driving innovation. Committed to bringing the top talent and best ideas to bear on our nation’s most pressing problems, the Obama Administration recognizes the role that prizes can play to spur innovation. In the Strategy for American Innovation white paper released September 2009, President Obama directed Federal agencies to "harness the inherent ingenuity of the American people" in part through using prizes and challenges. In March 2010, the White House Office of Management and Budget issued a memorandum to all heads of the Executive Departments and Agencies affirming the Administration’s commitment and providing a policy and legal framework to guide agencies in utilizing prizes to stimulate innovation to advance their core mission.
In light of these commitments, one challenge is to bring the learning of nonprofit, business, and philanthropic organizations in this area to the public arena. As a Washington Post article notes:
Whatever you call this new way of doing business, it represents a dramatic departure from the norm for the bureaucratic, command-and-control federal government. To be sure, the agencies won't abandon the traditional method of doling out grants to predictable bidders. But in the new era of innovation-by-contest, the government will sometimes identify a specific problem or goal, announce a competition, set some rules and let the game begin.
This challenge gave rise to the April 30th strategy session, Promoting Innovation: Prizes, Challenges and Open Grantmaking.