Increase in Prizes to Advance Innovation
Source of graphic on past prizes: online version of the WSJ article quoted and cited below.
(p. A9) Are we impatient with NASA? Google offers $30 million in prizes for a better lunar lander. Do we like solving practical puzzles? InnoCentive Inc. has posted hundreds of lucrative research contests, offering cash prizes up to $1 million for problems in industrial chemistry, remote sensing, plant genetics and dozens of other technical disciplines. Perhaps we crave guilt-free fried chicken. The People for the Ethical Treatment of Animals offers a $1 million prize for the first to create test-tube poultry tissue that can be safely served for dinner.
Call it crowd-sourcing; call it open innovation; call it behavioral economics and applied psychology; it's a prescription for progress that is transforming philanthropy. In fields from manned spaceflight to the genetics of aging, prizes may soon rival traditional research grants as a spur to innovation. "We see a renaissance in the use of prizes to solve problems," says Tony Goland, a partner at McKinsey & Co. which recently analyzed trends in prize philanthropy.
. . .
Since 2000, private foundations and corporations have launched more than 60 major prizes, totaling $250 million in new award money, most of it focused on science, medicine, environment and technology, the McKinsey study found.
. . .
In growing numbers, corporate sponsors are embracing the prize challenge as a safe, inexpensive way to farm out product research, at a time when tight credit and business cutbacks have slowed innovation. Venture-capital investments have dropped by almost half since last year, reaching the lowest level since 1997, the National Venture Capital Association recently reported. "Here is a mechanism for off-balance-sheet risk-taking," says Peter Diamandis, founder of the X Prize Foundation. "A corporation can put up a prize that is bold and audacious with very little downside. You only pay the winner. It is a fixed-price innovation."
For the full article, see:
(Note: ellipses added.)
The McKinsey study mentioned in the quotes above, was funded by the Templeton Foundation, and can be downloaded from:
McKinsey&Company. ""And the Winner Is ..." Capturing the Promise of Philanthropic Prizes." McKinsey & Company, 2009.
(Note: ellipsis in study title is in the original.)
