Can Offering Prizes for Innovative Solutions Save the Gulf?

The IntersectionBy Chris MooneyMay 13, 2010 5:08 PM


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This is a guest post by Darlene Cavalier, a writer and senior adviser at Discover Magazine. Darlene holds a Masters degree from the University of Pennsylvania, and is a former Philadelphia 76ers cheerleader. She founded and cofounded to make it possible for lay people to contribute to science.

Prizes: This old idea is making a sweeping comeback and it is changing the way government, industry and foundations help revolutionize future discovery. It’s high time we offer prizes to motivate and galvanize the public to come up with creative, real-time solutions to major disasters, such as the BP oil spill. Approximately one-and-a-half weeks ago, I received an email from Andrew Revkin (who writes the DotEarth blog at The New York Times) in which he challenged researchers and others to think creatively about substantive approaches to stanching the oil spill in the Gulf of Mexico. "There's a lot of talk about sweeping Grand Engineering Challenges this year. But one is unfolding in real-time in the Gulf. Waiting months for a relief well seems pretty in the box,” he wrote in the email (reprinted with Revkin's permission), and reiterated in this blog post. While it’s true that BP is accepting public suggestions about ideas to mitigate the oil spill, the process needs some tweaking. From the Deepwater Horizon Response website: “Once a formal suggestion has been filed, BP technical personnel will carefully evaluate each and every one for technical feasibility and proof of application. If the engineering group finds the suggestion feasible, the person submitting the suggestion will be contacted if and when their support is needed.” BP technical personnel will evaluate the suggestions? Seems a little too cozy to me. For the same reasons President Obama wants to divide the Minerals Management Service into two agencies--one charged with inspecting oil rigs, investigating oil companies and enforcing safety regulations, and another to oversee leases for drilling and collection of billions of dollars in royalties--perhaps we should consider a third-party administrator to solicit and evaluate proposed solutions from the public. I suspect the White House would agree. Earlier this week, Beth Noveck, U.S. Deputy Chief Technology Officer and Director of the White House Open Government Initiative, summarized on the White House blog the highlights of a recent Prize Summit organized by the Office of Science and Technology Policy and some of the major players in the world of big prizes. “Leaders from over thirty Federal agencies have come to learn about how to incorporate prizes and incentive-backed challenges into their work of addressing complex policy problems,” Noveck reported. The summit helped agencies learn more about the benefits of prizes while setting forth guidelines, like this one from the U.S. Office of Management and Budget (OMB): “A prize should not be an end in itself, but one means within a broader strategy for spurring private innovation and change." Hold the phone. What if one IS looking for an end in itself, such as an immediate solution to the oil spill? I contacted InnoCentive's CEO, Dwayne Spradlin. InnoCentive works with companies and organizations struggling to find (largely technical) solutions. If in-house researchers and engineers can’t solve a problem, InnoCentive poses the challenge to its 250,000 independent solvers from all walks of life. Not surprisingly, Dwayne informed me that he’d already put into action an Emergency Response 2.0 Challenge to help find a solution to mitigate the impact of the oil spill. Unlike most of InnoCentive's other challenges, this one does not carry a cash prize. “Our connected planet needs to take a fresh approach to disaster response,” remarked Spradlin in a recent media release. “All crisis situations are time-sensitive and we have the ability to quickly tap into our global Solver network to start looking for solutions immediately. It only takes one amazing idea to slow the Gulf oil leak or minimize its impact.” Now thru May 30th, anyone with a creative solution to this crisis can enter the Emergency Response 2.0 Challenge. I, for one, support Spradlin’s approach. Now it's time to link Spradlin up with the White House and BP. Stay tuned. But if you’re not entirely persuaded that prizes—or, more to my point, opening doors to public participation--may hold the key to finding unique solutions to grand challenges, pull up a chair so I can bend your ear some more…Be forewarned, I am prize-obsessed. I was the executive director of the Discover Magazine Technology Awards and, more recently, wrote this piece about prizes which was featured in Discover's Top 100 Science Stories of 2009. Prizes have been around for three centuries, dating back to 1714 when the British Parliament established the Longitude Prize in an effort to turn to the public to end reoccurring shipwrecks from inaccurate measurements at sea. Not surprising to modern era supporters of open collaboration and incentivized competitions, the solution came from an unexpected source--a clockmaker who developed the marine chronometer. Charles Lindbergh’s famous transatlantic endeavor was a result of his participation in the Orteig Prize for the first nonstop flight between New York and Paris--an accomplishment, notes X PRIZE Foundation CEO Peter Diamandis, that woke up Americans to what was possible and spawned a $300 billion aviation industry. The $10 million Ansari X PRIZE to launch a privately funded reusable space craft was modeled after the Orteig Prize. The X PRIZE Foundation and its partners have helped spur a renaissance in prize giving with a plan to award $100 million over the next five years through ten new prizes, including the $10M Archon X PRIZE for Genomics to drive rapid human genome sequencing. “We know that performance-based investments, where sponsors only pay for results, and where competitors often spend 10-40 times the amount of the prize purse, are highly efficient, effective, low-risk mechanisms to solve problems,” says Diamandis. A report by McKinsey & Company, commissioned by the John Templeton Foundation, tracks 219 current prizes with awards value greater than $100,000. The report finds that before 1991, 97% of big-prize purses recognized prior achievements (Nobel Prizes, for example), but since then, 78% of new prize money has been given as inducement to prize winners that achieve a specific, future goal. What’s more, the authors estimate the total prize sector to be worth as much as $1 to 2 billion (currently, corporations fund 30% of major prizes). Prizes can stimulate unconventional collaborations and decentralize the pool of potential solvers, casting a wider net to seek solutions from unexpected sources. “Innovations happen at the intersection of disciplines,” Karim R. Lakhani, assistant professor in the Technology and Operations Management unit at Harvard Business School, once told me. He and his coauthors studied the effect of "broadcasting" or sharing problems with people whose expertise is at the periphery of a problem's particular field. It turns out, those outsiders “were most likely to find the answers and do so quickly.” The study and its findings are described in "The Value of Openness in Scientific Problem Solving," coauthored with Lars Bo Jeppesen, Peter A. Lohse, and Jill A. Panetta. Do prizes spur innovation? A 2009 study by Harvard and the Norwegian Business School compared 2000 awards given in the late 18th century-early 19th century with inventions registered with the British Patent Office. Not only were winners more likely to receive and renew patents but the participants applied for more than 13,000 patents for their inventions. Inducement prizes can be “transformational elements to support innovation,” wrote Tom Kalil in a 2006 Brookings Institution report, three years before President Obama appointed him Deputy Director of the U.S. Office of Science and Technology Policy. In the report, Kalil called for the institutionalization of prizes as policy. He suggested that NASA, for example, eventually allocate 2-3% of its annual budget to such prizes. (Senator McCain promised during his presidential campaign a $300 million prize for the development of a battery for plug-in hybrids or electric cars.) It’s no coincidence that the National Science Foundation, NASA, the Department of Energy, and the 27 other federal agencies Noveck references in her OSTP blog post, endorse the use of public funds to support inducement prizes, hearkening back to the 18th and 19th centuries. Bottom line: Expect to see LOTS of big prizes ahead. For now, let’s hope Spradlin’s Emergency Response 2.0 project gets the attention it deserves from BP, the White House, and the scientific community--because, as Revkin said, we need immediate solutions to real-time disasters.

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