[Ip-health] Idea of the Day: Use Inducement Prizes to Stimulate Innovation

[Manon Ress]

Idea of the Day: Use Inducement Prizes to Stimulate Innovation
http://www.americanprogress.org/issues/ideas/2008/06/061908.html

June 19, 2008

Inducement prizes are an old but currently underutilized tool for
stimulating technological innovation. Inducement prizes encourage
efforts by contestants to accomplish a particular goal, as opposed to
recognition prizes such as the Nobel Prize which reward researchers
for past achievements.

Historically, prizes have been used by the British Parliament to
discover an accurate way to measure a ship=92s longitude, by Napoleon to
feed the French army with preserved food, and by a New York hotel
owner to motivate Charles Lindbergh=92s trans-Atlantic flight. In recent
years, prizes have enjoyed a renaissance, in part due to the success
of the Ansari X PRIZE.

A related policy tool is an Advance Market Commitment. Under an AMC,
governments commit to purchase a product that does not yet exist,
thereby stimulating private-sector investment in R&D and
manufacturing. Experts have proposed creating AMCs for diseases of the
poor such as tuberculosis and malaria.

Currently, only a few federal agencies (DARPA and NASA) are using
prizes. Congress should pass legislation that gives federal agencies
the authority to support prizes and Advance Market Commitments. This
legislation should encourage agencies to partner with non-profit
groups and the private sector, which would take the lead on public
relations, defining the rules, recruiting additional and philanthropic
sponsors, and selecting the judges.

The legislation should make clear that the government can make
commitments to prizes and AMCs that are legally binding, and not
subject to the whims of the annual appropriations process. Finally,
the legislation should allow agencies to experiment with a broad range
of topics, prize amounts, and rules.

For more on CAP's policies for increasing innovation in science and
technology, please see:

     * A National Innovation Agenda: Progressive Policies for Economic
Growth and Opportunity Through Science and Technology by Tom Kalil and
John Irons

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Manon Ress
manon.ress@keionline.org,

1621 Connecticut Ave, NW, Washington, DC 20009 USA
Tel.:  +1.202.332.2670, Fax: +1.202.332.2673