Can we solve the world’s problems by offering a large enough prize?

On the 22nd of October 1707, more than 1400 British sailors died when a British naval fleet sank in stormy weather off the Isles of Scilly. The disaster was later attributed to failings in navigation and sailors’ difficulty in determining their location at sea. This was a perennial problem at the time, and had persisted despite intense scientific research. Seven years later, the UK government passed the Longitude Act, offering 20,000 pounds (more than 2 million pounds in today’s money) to anyone who could develop a method for reliably determining longitude at sea. The longitude prize was eventually won by John Harrison, a self-educated Lincolnshire clockmaker.

Yesterday, 300 years after the original Longitude act, the UK Technology Strategy Board launched a £10 million pound prize competition, a new ‘Longitude prize’. The money will be awarded to a scientist or group of scientists who come up with a solution to one of a set of major global challenges – inadequate food/clean water supply for everyone, antibiotic resistance, spinal cord injury, dementia, the large carbon impact of air-flight.

The new Longitude prize is the latest in a series of innovation inducement competitions over time. These competitions have offered monetary rewards for solving problems as diverse as the development of butter substitutes, the first trans-Atlantic air flight, reusable aircraft for space flight, or an alternative fertilizer to bird poo. One novel feature of the 2014 Longitude prize is that it is seeking public input into the specific challenge to be targeted. Public voting will decide which of the six global challenges above are to be the focus of the prize.

But are innovation prizes an effective or appropriate way to solve major global scientific challenges?

There is relatively little evidence about the effectiveness of innovation prizes as a means of generating solutions to major problems. Although there are memorable examples of apparently successful competitions, there have also been many prizes (such as the guano prize) that were never awarded. A sceptic might wonder whether the scale of some of the current Longitude challenges would inevitably lead them to fall into that category. Even where discoveries have occured it is often difficult to know whether or when innovations would have occurred in the absence of the prize.

There are three attractive features of innovation prizes. First, prizes may be attractive to funders, since they typically involve low risk. If no one successfully completes the challenge, there is no payout required, and the only cost will be of admistering/publicizing the competition. (They are far more appealing in this sense than conventional research funding, which involves definite financial outlays with no guarantee of success). Second, prizes can generate a wider public interest in a particular issue. Third, at least anecdotally, prizes may be useful in generating ideas from innovators/inventors/thinkers outside of traditional research and industry. For example, Charles Lindbergh, who won the Orteig prize for trans-atlantic flight, was virtually unknown before his prize-winning achievement.

However, there are also some potential concerns that we might have about innovation prizes like Longitude 2014. Typically they only reward a single winner. This potentially means that others who have worked towards the challenge receive no reward, even if they have made major steps forward or were close to the goal. Although some scientific discoveries represent distinctive novel approaches, most scientific progress is incremental, building upon past knowledge. (Often basic research that would not be eligible or attractive for innovation awards). There is a danger that highly competitive prize competitions would inhibit potentially beneficial cooperation or collaboration between researchers. One interesting idea, described in a discussion paper by the International Food Policy Research Institute, suggests the use of proportional prize rewards, dividing available funds in proportion to achievement.

Second, the type of scientific research likely to be necessary to solve any of the above problems is likely to be highly costly, far more so than scientific research in the 18th or 19th centuries. Typically, the research cost of completing a challenge is significantly less than the cash value of the prize. In the 21st century it seems much less likely that prizes like Longitude will be won by ‘lone eagle’ innovators or researchers like Harrison or Lindbergh. Researchers will need to find funding from elsewhere in order to support their work, and will not be able to depend on prize money. Innovation prizes cannot therefore be a sole means of stimulating and encouraging research. There is the obvious downside that funding large enough to generate interest and competition may displace or replace conventional funding streams for research.

Innovation prizes potentially have an important role in stimulating investment, interest and inventive approaches to major technological and scientific challenges. Prize competitions like the Longitude prize are strongly motivating, building on our strong innate competitive instincts. Yet there is also a need for careful assessment of the impact and effectiveness of such competitions, and recognition that they represent only part of the solution.

 

Gok, The Impact of innovation inducement prizes, NESTA working paper 2013

Kay, Opportunities and Challenges in the use of innovation prizes as a government policy instrument Minerva 2012 191-6

Masters and Delbecq Accelerating innovation with prize rewards IFPRI discussion paper

Davidian Prizes, Prize Culture, and NASA’s Centennial Challenges

 

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