A draft presentation pulling together some basic ideas around prize design. Looking for feedback - need more international development examples (especially those sponsored by governments) and some good impact/outcome data. Email lhtorres at gmail dot com.

1. PRIZE DESIGN *
Using Prizes to Pull Innovation into International Development
Lars Hasselblad Torres/DAI 2011
Wednesday, November 9, 2011

2. Opportunity
• Growth of Design for Development community of practice
• Emergence of Challenge Driven Innovation (CDI) discipline
• Rise of “grand challenges” as an international development focusing
mechanism
• Increased interest in, uses of prizes across federal agencies
• Robust ecology of Open Innovation (OI) platforms
Conditions right, moment ripe
Wednesday, November 9, 2011

3. Spotted
Why [are] all these highly intelligent, well
educated youngsters not putting their brains
to good use by solving real-world problems.
Instead they’re building technology to solve
trivial issues.
@hermioneway on TNW*
*http://thenextweb.com/entrepreneur/2011/07/13/the-problem-with-silicon-valley-is-itself/
Wednesday, November 9, 2011

4. Conditions
A creative, results-oriented community of practice that will “get” the
Design for Development call, engage, and bring energy to the effort.
Challenge Driven Recognized approach to accelerating research and development
Innovation while mitigating risk by tapping creativity in crowds.
Galvanize international attention and aspiration around some
Grand Challenges common purpose.
Provision of broad authority and legitimacy for aspirational,
Federal Prizes experimental tools and approaches to innovation.
An approach to problem-solving emphasizing networks,
Open Innovation transparency, and cooperation.
Wednesday, November 9, 2011

5. When to use a prize (from the funding toolkit)*
* From McKinsey, “Using prizes to spur innovation” (2009)
Wednesday, November 9, 2011

6. When prizes are needed (in the marketplace)*
Public or philanthropic
Private funders
funders
Direct funding by
Funders can
Direct funding by private firms government or philanthropic
Direct funding observe quality of
(Principals, employees, or donors
(ex-ante payments) R&D before results
research contracts) (public labs, contracts, and
are known
competitive grants)
Prize contests funded by Funders cannot
Research contests by public or philanthropic
Prize funding observe quality of
private firms donors
(ex-post payments) R&D until results are
(eg InnoCentive, NineSigma)
(eg X PRIZE, AMCs) seen
Value capture is easy. Value capture is costly.
Beneficiaries can be Benefits spread to
made to pay. consumers and imitators.
*William Master, “Accelerating Innovation with Prize Rewards” (2007)
Wednesday, November 9, 2011

7. Prize typology
Purpose & Outcome
Recognition Stimulation Solution
• Goal is encouragement
Approach to Disbursement
and celebration.
Winner take all • A single winner selected
Well-evolved
for past achievement in
a field or discipline.
• Goal is ideation and
mobilization.
• A limited sequence of
Rank order
winners selected based
on design criteria.
Goal is research and
Experimental
•
development focused.
• A series of winners are
Proportional selected for relative
achievement based
on solution criteria.
Wednesday, November 9, 2011

8. Prize typology with examples
Purpose
Recognition Stimulation Solution
• Nobel Prize • METROPOLIS Next • Ansari X PRIZE
• Lemelson-MIT Prize Generation Design • Cisco iPrize
Competition • Saltire Prize
Winner take all • Buckminster Fuller • ALS Biomarker
Challenge Prize4Life
• Innovation Prize for
Disbursement
Africa
• CurryStone Design • MIT Global Challenge • Google Lunar X PRIZE
Prize • Braun Prize • Wendy Schmidt Oil
• ImagineH20 • INDEX: Award Cleanup Prize
• Dell Social Innovation • DARPA Grand
Rank order Challenge Challenge
• LG Design the Future
Competition
• GE Ecomagination
Challenge*
Proportional Excluded (Experimental*)
Wednesday, November 9, 2011

9. Prize examples
Prize Purpose Features Award
Recognition
Recognize great individual and shared Invitation-only nomination process, proposal 10,000,000SEK
Nobel Prize achievement in a field. selection by respective Nobel committee.
Recognize an inventor who has made Open field, peer nomination, tiered judging $500,000
Lemelson-MIT Prize significant breakthroughs. process, patent requirements.
Advance and inspire work of emerging “social Anonymous jury review of Invitation-only $100,000
CurryStone Design Prize design pioneers” improving lives. nominations.
Implementation support for integrated Open application process, multidisciplinary $100,000
Buckminster Fuller Challenge strategy addressing a complex human jury review.
Stimulation
problem.
Challenge young engineers to tackle barriers Problem marketplace, solver community, Up to $15,000
MIT Global Challenge to human well-being in underserved focus on impact. Judges recommend
communities. winners, amounts.
Open call for breakthrough ideas for home Judge panel selects among entries for $200,000,000
GE Ecomagination Challenge energy creation, management, and use. merit, technical validity, innovation, impact.
Stimulate development of technologies that First-past-the post prize to team £10,000,000
Saltire Prize harvest marine energy at a large scale. demonstrated specific results in power
Solution
generation.
Accelerate the discovery of a disease First-past-the-post prize to an individual or $1,000,000
ALS Biomarker Prize4Life biomarker that will benefit medical field. team for achievement based on board vote.
Accelerate the development of a fully Open tournament-based prize competition $2,000,000
DARPA Grand Challenge autonomous vehicle for battlefield use. over four years, with increasing complexity.
Wednesday, November 9, 2011

10. Federal prizes examples
Prize Purpose Sponsor Award
First to submit locations of 10 moored, 8-foot, Defense Advanced Research Projects Agency $40,000
DARPA Network Challenge red, weather balloons at 10 fixed locations in the
Stimulation
continental United States.
Sought solutions to sustainable, energy efficient Housing and Urban Development/Department $31,000
Sustainable Urban Housing housing in ways that unleash economic of State/APA/Brazil Ministry of Cities/Ashoka
opportunities for urban poor
A practical demonstration of wireless power NASA/Spaceward Foundation $900,000
Power Beaming Challenge
transmission systems.
Demonstrate solar energy collection and storage NASA/The Clean Tech Open $1,500,000
Night Rover Challenge systems suitable for rovers to operate through
several cycles of daylight and darkness.
Data for Cancer Prevention and Develop innovative applications with evidence- National Cancer Institute $10,000
Control based data for cancer prevention and control.
Solution
Develop a means of stopping an uncooperative Air Force Research Lab $25,000
Vehicle Stopper Challenge
fleeing vehicle without damage or harm.
Develop food storage technology that meets NASA/DoD/InnoCentice $11,000
Improved Barrier Layers - Keeping
mass, volume, and consumable exploration
Food Fresh in Space
requirements.
Develop high performance, energy-saving Department of Energy $10,000,000
Bright Tomorrow Lighting Prize replacements for conventional light bulbs that
save money.
A simple system or approach that can be US Air Force $15,000
Fast Rope Challenge employed with or as a FAST rope to maintain a
fast but safe descent rate.
Wednesday, November 9, 2011

11. Federal prize insights*
Top 5 users of prizes are Department of Health and Human Services (19
Lead Agencies percent), Environmental Protection Agency and Air Force (9 percent),
Department of Defense (7 percent) and NASA (6 percent)
66 percent are “Stimulation” prizes, 26 percent are “Solution” prizes, and
Prize Purpose the balance are “Recognition” prizes.
28 percent of prizes sought a “Software” solution, another 26 percent
sought “Multimedia” outcomes (a video, photo, etc), and 11 percent sought
Prize Outcome “Proposals.” 6 percent sought tangibles like “Devices,” “Robots,” or
structures.
10 percent of federal prizes above $100,000 (50 percent of them
Prize Purse “Stimulation” prizes, 38 percent “Solution” ). 33 percent had no monetary
award (81 percent also “Stimulation” prizes).
53 percent of prizes had closed successfully; only 1 prize went unclaimed.
Prize Takers The others had not yet closed. Among those that had closed, 36 percent
used “Winner Take All” while 21 percent had more than 3 winners.
*A very cursory look at 80 of the most recent prize competitions listed on challenge.gov (11/9/11)
Wednesday, November 9, 2011

12. Prize design considerations
Prizes aren’t, by themselves, a good thing. We have to make them great. Here
are five considerations to get it right:
• Specify outcomes. Make the call for participation as clear as possible from the
get go with a clear technical description of the desired outcome (not solution).
• Know your audience. Knowing who you want to reach, how, and with what
“ask” is central to building momentum and an effective discovery process.
• Build for discovery. Innovation is often about the adjacent possible - the ability
to combine insights across disciplines to produce something new.
• Right-size the purse. Make the prize sufficient to reward effort. This isn’t all
about price - it can include prestige, publicity, market creation, and more.
• Timeframe. A clear sense of timing will motivate and lose actors. Balance the
discovery timeframe against dedicated resources, urgency, and “stickiness”.
Wednesday, November 9, 2011