Appendix B

Participants, Prospectus, and Agenda

Workshop to Assess the Potential for Promoting Technological Advance through Government-Sponsored Prizes and Contests



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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Appendix B Participants, Prospectus, and Agenda Workshop to Assess the Potential for Promoting Technological Advance through Government-Sponsored Prizes and Contests

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the This page in the original is blank.

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Participants Workshop to Assess the Potential for Promoting Technological Advance through Government-Sponsored Prizes and Contests April 30, 1999 National Academies Building 2100 C Street, N.W. Washington, D.C. 20418 Erich Bloch, Chair* President The Washington Advisory Group, LLC Bruce Alberts President National Academy of Sciences Alan H. Anderson Consultant Claude Barfield Research Scholar American Enterprise Institute for Public Policy Research Joseph Bordogna Acting Deputy Director National Science Foundation David Brown Executive Director U.S. FIRST Rita R. Colwell Director National Science Foundation Marc D. Cummings Assistant for Policy Development Office of the Under Secretary for Technology U.S. Department of Commerce Peter H. Diamandis Chairman and President X Prize Foundation Richard L. Dunn General Counsel Defense Advanced Research Projects Agency Robert W. Galvin Chairman of the Executive Committee Motorola, Inc. Lori Garver Associate Administrator for Policy and Plans National Aeronautics and Space Administration Penelope Gibbs Administrative Assistant, Program Office National Academy of Engineering Newt Gingrich Senior Fellow American Enterprise Institute Greg Henry Program Examiner, National Security Division Office of Management and Budget * Steering Committee Member

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Harry S. Hertz Director, Baldrige National Quality Program National Institute of Standards and Technology David F. Heyman Special Assistant Office of the Secretary of Energy U.S. Department of Energy Christopher T. Hill Vice Provost for Research and Professor of Public Policy and Technology George Mason University Neen Hunt Executive Director The Lasker Foundation Steve Isakowitz Branch Chief, Science and Space Programs Office of Management and Budget Anita K. Jones University Professor Department of Computer Science University of Virginia Thomas A. Kalil Senior Director National Economic Council Ronald L. Kerber Executive Vice President and Chief Technical Officer Whirlpool Corporation Genevieve J. Knezo Specialist, Science and Technology Policy Congressional Research Service Library of Congress Sylvia K. Kraemer Director of Policy Development National Aeronautics and Space Administration John S. Langford President Aurora Flight Sciences Corp. Stephen A. Merrill Executive Director Board on Science, Technology and Economic Policy National Research Council William G. Morin Vice President R. Wayne Sayer and Associates David C. Mowery* Haas School of Business University of California at Berkeley Proctor P. Reid Associate Director, Program Office National Academy of Engineering Del Ritchhart Vice President, Domestic Operations Lockheed Martin Corporation Daniel Rodriguez Senior Evaluator U.S. General Accounting Office Nam P. Suh Professor Massachusetts Institute of Technology James Turner Senior Democratic Staff Member for Technology and Counsel House Committee on Science U.S. House of Representatives

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Harold Varmus Director National Institutes of Health Robert S. Walker* President The Wexler Group R. Thomas Weimer Director, Program Office National Academy of Engineering Steve Wesbrook Gingrich Group Robert M. White Principal The Washington Advisory Group, LLC Patrick H. Windham Windham Consulting Wm. A. Wulf President National Academy of Engineering

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Prospectus Workshop to Assess the Potential for Promoting Technological Advance through Government-Sponsored Prizes And Contests Summary In response to a request from the President's National Economic Council, the National Academy of Engineering is organizing a day-and-a-half workshop on April 29–30, 1999 to assess the potential of government-sponsored prizes in stimulating technological innovations of significant societal impact. Erich Bloch, President of the Washington Advisory Group, chairs the NAE workshop steering committee. The project will result in a summary report from the NAE steering committee to the NEC, the workshop sponsor (the National Science Foundation), other interested federal agencies, and members of Congress. NSF has provided a grant of $65,115 to the NAE to cover costs associated with the workshop. Background Throughout recent history, governments, private foundations, companies, and individuals have sponsored contests and prizes designed to promote technological advance in particular fields for the public good. For example: In response to the loss of 4 warships and over 2,000 sailors and officers of the British Navy in a wreck off the Scilly Isles attributed to navigational error, the British Parliament passed the Longitude Act of 1714, which offered 20,000 pounds (the equivalent of millions of dollars today) to anyone who could solve the problem of determining longitude at sea. A British clockmaker named John Harrison rose to meet the challenge by developing the first stable nautical chronometer in 1737. Prizes played an important role in the development of the civil aviation industry in the early 20th century by rewarding advancements in speed, distance, safety, and endurance. New York hotel owner Raymond Orteig offered $25,000 as a prize for the first aviator to cross the Atlantic from New York to Paris, a prize won by Charles A. Lindbergh in 1927. Between 1926 and 1927, Daniel Guggenheim offered aviation-related cash awards and trophies worth approximately $100 million in today 's dollars. In 1992, the Super Efficient Refrigerator Program (SERP), a nonprofit corporation of 24 major public and private American utilities, pooled together $30 million to reward the manufacturer who could build the most efficient CFC-free refrigerator at the lowest cost. The winner, Whirlpool Corporation, received guaranteed rebates from the SERP pool to offset the incremental product cost. SERP would be the first of a series of “Golden Carrot” programs, whereby utilities have offered financial incentives to manufacturers to make major advances in energy efficiency and product performance.

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the The Feynman Prize in Nanotechnology was established in 1993 to recognize researchers whose recent work has most advanced the development of molecular nanotechnology. The European IT Prize, organized by the European Commission and the European Council of Applied Sciences and Engineering, offers cash awards and widespread promotion to companies that have made outstanding contributions in generating and converting innovative ideas and R &D results in information technology into marketable products. The objectives of the annual IT Prize are to promote excellence in European Information Technology performance and to stimulate innovation and competitiveness in industry. In essence, the logic or rationale for “innovation” prizes and contests such as these is quite similar to that of government R&D tax credits or other “extra-market” incentives to private investment in research and technological innovation. In general, technology prizes or contests seek to advance technological solutions to important societal challenges (safety, energy efficiency, public health, etc.) in areas where market forces alone have been unable to induce adequate private-sector investment in R&D and innovation. As is the case with tax credits, sponsored prizes would allow the government to set a goal without dictating how it should be achieved, thereby leveling the playing field for researchers or companies that want to experiment with unconventional approaches. However, by underscoring through publicity the linkages between science and technology and particular societal challenges, sponsored prizes would seem to offer greater opportunity for public outreach and education than many other government incentives to technological advance. At present, innovation prizes of this type are not part of the U.S. federal government's portfolio of science and technology policy instruments. Current Federal Acquisition Regulation (FAR) appears to present legal impediments to the use of such prizes by federal agencies. More importantly, public understanding of the potential costs and benefits of innovation prizes as an instrument of federal technology policy is very limited, i.e., the knowledge base for making intelligent policy decisions in this area is underdeveloped. The objective of the planned workshop is to build a useful knowledge base regarding innovation prizes and their potential as federal policy tools for fostering technological innovation of benefit to society. Proposed Plan of Action To assess the potential of sponsored prizes and contests as an additional tool of federal science and technology policy, the National Academy of Engineering will convene experts at a day and a half workshop dedicated to the subject on April 29–30, 1999. The meeting will involve roughly 35 invitees from industry, academia, and government with expertise regarding R&D, innovation, technology commercialization, the history of technology, and science and technology policy. A background paper on the role of sponsored technology prizes and contests in advancing technology is being prepared by the NAE for distribution to participants in advance of the workshop.

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Topics to be explored by the workshop and the commissioned background paper will include Case studies of previous or existing prizes Issues associated with the design of contests and prizes, including partnerships with foundations and the private sector Current barriers to the use of prizes as an instrument of technology policy Possible technical areas and goals for prizes Anticipated Results In December 1998, NAE President Wm. A. Wulf appointed a five-member workshop steering committee,* chaired by Erich Bloch, President of the Washington Advisory Group. The committee met on January 12, 1999 to identify prospective workshop participants, structure the workshop agenda, review the draft background paper, and identify additional background materials for distribution to attendees in advance of the meeting. Following the workshop, the committee, with support from NAE staff, will prepare a brief report for delivery to the Chairman of the National Economic Council, the Director of the National Science Foundation, the heads of other interested agencies, and members of Congress. The committee report will be reviewed in accordance with Academy procedures and will draw on the workshop discussion, but will not necessarily reflect any consensus reached during the workshop. Federal Advisory Committee Act The Academy has developed interim policies and procedures to implement the Federal Advisory Committee Act, 5 U.S.C. § 1 et seq. (FACA), as amended by the Federal Advisory Committee Amendments Act of 1997, H.R. 2977, signed into law on December 17, 1997 (FACA Amendments). The FACA Amendments exempted the Academy from most of the requirements of FACA, but added a new Section 15 that includes certain requirements regarding public access and conflicts of interest that are applicable to agreements under which the Academy, using a committee, provides advice or recommendations to a Federal agency. In accordance with Section 15 of FACA, the Academy shall deliver along with its final report to the National Science Foundation a certification by the Responsible Staff Officer that the policies and procedures of the National Academy of Sciences that implement Section 15 of FACA have been complied with in connection with the performance of the contract/grant/cooperative agreement. For further information regarding the project, please contact Proctor Reid, Associate Director, Program Office, National Academy of Engineering at tel. 202–334–2467, or fax 202–334–1595; or email <preid@nae.edu>. * Other members of the workshop steering committee include Paul Kaminski (Technovation, Inc.), David Mowery (University of California at Berkeley), Daniel Tellep (retired, Lockheed-Martin), and Robert Walker (The Wexler Group).

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Agenda Workshop to Assess the Potential for Promoting Technological Advance through Government-Sponsored Prizes and Contests April 29–30, 1999 National Academies Building 2100 C Street, N.W. Washington, D.C. 20418 Thursday, April 29, Members Room 6:00 p.m. Reception and Dinner 6:30 Welcome by NAE President Wm. A. Wulf 8:00 Brief Remarks by Workshop Chairman Erich Bloch 8:30 Adjourn Friday, April 30, Lecture Room 7:30 a.m. Continental Breakfast in Anteroom 8:00 Chairman's Opening Remarks Terms of Reference; Definitions; Objectives 8:30 Keynote Address Incentive Technology Prizes as Instruments of Federal Policy: For and Against   Moderator: Erich Bloch, Workshop Chair and President, The Washington Advisory Group   Speakers: An Advocate: Newt Gingrich, Former Speaker of the U.S. House of Representatives   A Skeptic: Claude Barfield, American Enterprise Institute   Q&A and General Discussion  

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the 10:00 Break 10:15 Panel 1: Established Prizes and Their Lessons: Case Examples of Inducement and Recognition Prizes Moderator: David Mowery Haas School of Business, University of California, Berkeley Background Paper: Patrick Windham Consultant to Workshop Steering Committee Panelists: The X Prize Peter Diamandis, Chairman, X-Prize Foundation Industrial Prizes Can Drive Innovation Ronald Kerber, Chief Technical Officer, Whirlpool Corporation Learning from the Lasker Award: The Jewel in the Crown of Medical Research Achievement Neen Hunt, Executive Director, The Albert and Mary Lasker Foundation The Malcolm Baldrige National Quality Award Harry S. Hertz, Director, Baldrige National Quality Program, National Institute of Standards and Technology 12:00 p.m. Lunch 1:00 Panel 2: Policy Perspectives on the Potential Role of Inducement Prizes Moderator: Robert Walker, President, The Wexler Group FEDERAL AGENCY PERSPECTIVES: A New Look for Supporting Technology Development through DARPA Richard Dunn, General Counsel, Defense Advanced Research Projects Agency Incentive Innovation and the NSF Portfolio Rita Colwell, Director, National Science Foundation Harold Varmus, Director, National Institutes of Health

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Concerning Federally Sponsored Inducement Prizes in Engineering and Science: Report of the Steering Committee for the Lori Garver, Associate Administrator for Policy and Plans, National Aeronautics and Space Administration INDUSTRY PERSPECTIVE: Robert Galvin, Motorola 2:45 p.m. Break 3:00 Chairman's Summary Discussion of Day's Findings 3:45 Closing Remarks: Erich Bloch, Workshop Chair 4:00 Adjourn Panel Focus Questions Panel 1 What are the motivations and goals of prize sponsors and prize recipients? How would you define and measure the effectiveness of the existing prize? What elements are critical to the effective structuring and administration of prizes and contests? Lessons for potential government sponsors of prizes? How would you compare the role of prizes with that of other factors (e.g., the availability of venture funding) that have promoted technological advance in the field or industry? Panel 2 Are there areas where federal inducement prizes are likely to be useful? What can prizes or contests do that other policy instruments cannot? (E.g., innovative procurement mechanisms, CPIF contracts, etc.?) What are the advantages and disadvantages of prizes? How should inducement prizes be structured and administered in the federal context? (E.g., treatment of intellectual property generated? How to fund?)

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