novative accomplishments after they have occurred and been recognized as such. Inducement prizes—prizes intended to encourage innovators to address defined objectives that the sponsor identifies clearly in advance—have been used only sparingly by governments. There have been a few, relatively high-profile exceptions. A recent book recounted the history of the 18th century prize offered by the British government for development of a successful method for determining the longitude of ships at sea.2 This prize resulted in development of the ship’s chronometer, which revolutionized ocean-going travel and transportation. Much more recently, the U.S. Defense Advanced Research Projects Agency (DARPA) has sponsored a series of prizes awarded to teams that develop programmed land vehicles that can complete a challenging overland course without further human intervention.3 NASA has recently contracted with several nonprofit organizations to assist it in offering inducement prizes for several relatively small-scale improvements in aerospace technologies through its Centennial Challenges program.4

Private interests have been somewhat more active than governments in offering inducement prizes for innovations in various fields. Commercial aviation has featured privately sponsored prizes for many decades. Charles Lindbergh’s celebrated solo flight over the Atlantic in 1927 was in response to a prize of $25,000 offered by Raymond Orteig.5 The privately funded Ansari X-Prize of $10 million was recently won by a team headed by a renowned flyer, Burt Rutan, and Paul Allen, financier and cofounder of Microsoft Corporation. Their team completed a successful pair of suborbital flights in a manned, rocket-powered vehicle, fulfilling the Ansari X-Prize requirements.6 The National Academy of Engineering (NAE) is administering an innovation inducement prize funded by the Grainger Foundation. The NAE will award $1 million in 2007 to the team that develops the best way to remove arsenic from drinking water obtained from underground sources in developing nations, such as Bangladesh.7 Prizes have been fairly common in the field of mathematics. In 2000, for example, the Clay Mathematics Institute established a series of $1 million Millennium Prizes for the solution of seven critical problems in mathematics.8


Sobel, Daval. Longitude: The True Story of A Lone Genius Who Solved the Greatest Scientific Problem of His Time. Penguin, 1996.




See for a description of the program, the initial array of prizes, and NASA’s partner organizations.


Schroeder, Alex. “The Application and Administration of Inducement Prizes in Technology.” The Independence Institute, Golden, Color. December 2004, pp. 7-8.







The National Academies of Sciences, Engineering, and Medicine
500 Fifth St. N.W. | Washington, D.C. 20001

Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement