A Taxonomy of Technology Prizes and Contests
Patrick H. Windham
1.0 Types of Prizes and Contests
This addendum has two parts. This first section introduces major types of technology prizes and contests and the objectives they can help meet. A second part provides some examples of inducement and recognition prizes.
There are two types of prizes: inducement awards and recognition awards.
1.1.1 Inducement Prizes
Inducement prizes—or incentive prizes—are offered to individuals or groups who provide the best entry in a contest or who first meet some specified technical goal. These prizes are prospective, intended to induce people to do osomething better than others or to do something that has not been done before. Technology prizes encourage people to “stretch” the state of the art in technology. The award may or may not include a cash component.
Historical examples include a 1714 prize offered by the British government for the first practical method to determine longitude at sea and a large set of aviation prizes offered in the early 20th century, including the prize for the first nonstop flight from New York to Paris. More recent inducement prizes include a private prize for super-efficient refrigerators, a prize-like program at the Federal Communications Commission in the early 1990s, two new private prizes for innovative space launch vehicles, and several prizes offered for achievements in computing. Another set of inducement prizes serve primarily educational purposes, encouraging young people to enter engineering contests and awarding the prizes to the best entries.
1.1.2 Recognition Prizes
Recognition prizes are awards offered after an accomplishment, to recognize past achievement. The Nobel Prizes in science are the most famous examples. The Draper Prize is the NAE's similar award to recognize significant accomplishment in engineering. As with inducement awards, these prizes may or may not include a cash component.
In addition to recognizing achievement, these awards may also have other purposes. For example, the Lasker Awards in medical science have the explicit purpose of
publicizing medical advances so as to help build public support for biomedical research. Many sponsors of recognition prizes also hope that their prizes will encourage young people to go into engineering and science.
Prizes often are awarded through contests. Recognition prizes, for example, usually involve a contest-like process in which nominators submit names and a panel of judges picks the best entries among those nominations. In the case of inducement awards, there are two types of contests: best-entry contests and goal-oriented contests.
1.2.1 Best-Entry Contests
One type of contest gives a prize for the best entry submitted during some period of time, often a year.1 Judges pick this best entry and award a prize, even if the progress falls short of some overall objective. One recent example of this type of contest is the annual privately funded Loebner Prize, which each year gives a cash award and a medal for the computer that is the most “human” in its responses to inquiries.
1.2.2 Goal-Oriented Contests
In the second type of contest, the sponsor sets a technical objective or goal. The prize goes to the first person or group who meets the stated objective (and is verified as having met it).
In the twentieth century, aviation has seen many examples of this type of contest. In 1919, for example, New York businessman Raymond Oertig offered a $25,000 prize to the first person or team who could fly nonstop from New York to Paris, or vice versa. Charles Lindbergh won that prize in 1927. Another example is a second type of Loebner Prize. Dr. Hugh Loebner has pledged $100,000 and a gold medal for the first computer whose responses to questions are indistinguishable from a human's.
1.3 Objectives of Inducement Prizes and Contests
All inducement-type technology contests seek to encourage technological accomplishments. However, sponsors offer prizes to promote different types of objectives. In general, these can be divided into the four types described below.
1.3.1 New or Best Inventions
A sponsor offers a reward to the first person or group who can invent a new technology or technique that meets some technical objective —or who offers the best technology within a specified period of time. As discussed in the next section, one notable example is the cash prize offered by the British Parliament in 1714 to the first person who could develop a reliable method to measure longitude at sea.
1.3.2 New Applications
Here the sponsor offers a prize to the person who can refine or integrate existing technologies to meet a new objective. Meeting the objective may involve some degree of invention, but the real goal is to stretch existing technology in a new way.
Most of the aviation prizes of the early twentieth century fit this category. Airplanes already existed, but the contests asked people to try to use (and refine) aircraft in new ways—such as making the first nonstop flight between New York and Paris. It is important to note that prizes in this category can be designed either to encourage a technological achievement or to encourage a combination of technological achievement and commercial innovation.2 For example, Lindbergh's flight was a great technical and personal achievement, but it did not prove the economic viability of carrying passengers or mail across the Atlantic.
1.3.4 Performance Improvements
Sponsors also can offer a prize to those who can improve the performance of an existing product used for an existing application.3 The next section discusses one such case, in which utility firms offered a cash prize for a refrigerator company that could best reduce energy costs.
1.3.4 Technology Diffusion
Most prizes go to those who do something for the first time, but it is also possible to reward those who offer a new technology broadly in the marketplace. For example, the prize in the super-efficient refrigerator contest mentioned above provided part of the prize money for each of the new refrigerators the company sold. The prize explicitly rewarded the diffusion of the new innovation.
2.0 Examples of Inducement and Recognition Prizes
This section briefly presents several case studies of past and present technology inducement and recognition prizes, some offered by governments and others sponsored by private groups. These cases illustrate the different purposes for which prizes can be used.
2.1 Inducement Prizes
2.1.1 Longitude Prize
In 1714, the British Parliament offered a prize of £20,000 pounds (millions of dollars in today's money) for a “practical and useful” means of determining longitude at sea. British naval and merchant vessels faced serious problems because they could not
accurately determine their locations. The size of the prize reflected both the importance of the issue and the fact that no reliable method was close at hand.4
A remarkable British clockmaker, John Harrison, eventually solved the problem by developing the first accurate marine chronometer. He was drawn by the size of the prize and sustained for many years by research grants from the group administering the prize, the Board of Longitude. However, despite successful sea tests of his timepieces the Board never gave him the prize money—a step attributed by historians to the fact that over time the Board became dominated by astronomers who favored a rival, astronomy-based method of determining longitude. The longitude case illustrates both the ability of a large prize to draw serious proposals and the problems that can arise if the judges have conflicts of interest.
This case study also illustrates an important point about prizes and intellectual property. As a condition for continued research funding, the Board of Longitude required Harrison to provide written details on his design and to build duplicate timepieces the Board could make available to other watchmakers. As a result, the technology quickly became available to other producers, leading to several competing manufacturers. Harrison did not receive patent protection, but since the government paid his research costs one can argue that this arrangement was fair. In any event, it led to the speedy diffusion of a very important new technology.
2.1.2 Aviation Prizes
In the twentieth century, aviation has seen more contests and prizes than any other technical field. Aviation prizes generally come in three types.
Prizes for accomplishing some feat (e.g., Lindbergh's flight or the $1 million Budweiser Cup that will now go to the two men who just completed the first nonstop global balloon flight).
Prizes for accomplishing a certain feat using a prescribed type of technology (e.g., the Kremer Prizes for human-powered flights).
Air races. The prizes can be designed either to encourage new types of technologies or aircraft or to encourage pilots to stretch existing aircraft types to accomplish new tasks.5
Related to aviation prizes are what one can call “aviation procurement contests.” Air forces have long offered funding to enable competing teams of contractors to build prototypes of new aircraft. Officials then hold “fly-offs” to see which prototype best meets government needs. The “prize” becomes the resulting procurement contracts.6
In the decades between 1900 and World War II, aviation was a dramatic field and newspapers, governments, businesses, and individuals offered dozens of prizes. The prizes definitely encouraged early contest and innovation in aircraft design, but by World War II most aircraft innovation appeared to come from military contracts, government-sponsored research (such as that of the U.S. National Advisory
Committee on Aeronautics), and airline contracts for commercial planes. Since World War II, the number of aviation prizes has fallen sharply.
2.1.3 FCC Pioneer's Preference Program
In 1991, the U.S. Federal Communications Commission (FCC) offered what amounted to a technology prize. It offered guaranteed slices of the telecommunications spectrum to companies that committed to developing and implementing innovative communications services and technologies—particularly in the areas of wireless personal communications services (PCS) and low-earth-orbit (LEO) communications. In October 1992, the FCC tentatively granted pioneer's preferences to three companies.
The program made a certain sense in an era when spectrum allocations were based on either administrative decisions or lotteries. The FCC recognized that companies would not develop expensive new technologies unless they had some assurance that they would receive licenses and thus be able to recoup their investments. The pioneer's preference program sought to give those assured licenses in return for credible commitments to develop and deploy the innovative technologies.
However, in 1993 Congress sought new sources of government revenue and authorized the FCC to hold auctions of telecommunications frequencies. A market quickly developed for those parts of the spectrum subject to auctions. That market, in turn, raised serious questions for the preference program. Was it still necessary or fair to give preferences in an era when other companies, including innovative companies, would pay for their licenses? Even before the auctions, companies denied pioneer's preferences complained that the program gave unfair economic advantage to a few. Those complaints grew after the auctions began. The FCC planned to terminate the program in September 1998, but a new act of Congress led to its termination in September 1997.
2.1.4 Energy-efficient Appliances
In 1992, 24 major American utility firms created a new nonprofit corporation, the Super Efficient Refrigerator Program (SERP). The utilities pooled together $30 million as a reward to the manufacturer that could develop and successfully market a refrigerator which used at least 25 percent less energy than required by existing regulations. An interesting feature of this contest was the stipulation that part of the prize money would be awarded for each refrigerator sold—an inducement not only to develop but also to market the new product.
Whirlpool Corporation won the contest and did indeed manufacture and market a super-efficient refrigerator. However, as energy prices fell during the 1990s, no large market developed for this product. Whirlpool eventually discontinued the refrigerator—although it continues to market products with moderate energy efficiency. This case illustrates three points: (1) a sizable prize can indeed induce
innovation, (2) tying prize money to sales can encourage the production of an innovative product, and (3) even the most well-designed program will encounter problems if the marketplace changes and demand for a product falls.
2.1.5 Malcolm Baldrige Quality Awards
Congress established the Baldrige Awards program in 1987 to recognize U.S. companies for their achievements in quality and business performance and to raise awareness about the importance of quality and performance excellence as a competitive edge. There is no cash prize, but there is prestige.
While this is a primarily a recognition prize, it also serves as an inducement for firms to adopt the techniques of total quality management. Many companies have upgraded their quality programs in the hope of being considered for the awards. The program is a public-private partnership: applicant fees and a privately funded foundation pay for the reviews, but the Commerce Department is involved in the final judgments and the President traditionally makes the awards. The Baldrige program shows that monetary awards are not necessary to have a successful contest, provided that the awards are prestigious and make good economic sense for the applicants.
2.1.6 X PRIZE
The X PRIZE is a modern-day version of the traditional aviation prize. In 1996 the privately-funded X PRIZE Foundation of St. Louis announced that it would give $10 million to the first private team that develops and safely flies a spacecraft capable of carrying three passengers into suborbital flight and back. The craft must make two suborbital flights within a two-week period, meaning that the prize will go to a reusable vehicle.7
The X PRIZE comes at a time when rocket technology is relatively well known and a number of entrepreneurial companies are interested in getting into the space launch business. Thus, some of the conditions that make prizes a realistic means to encourage innovation exist. However, there are concerns—particularly about safety. To minimize the possibility that the prize will encourage risky or particularly dangerous entries, the Foundation requires that each applicant meet the regulatory requirements of its home country—including requirements regarding licenses, safety features, and insurance.
2.1.7 CATS Prize
On November 18, 1998, the Space Frontier Foundation (SFF) and the Foundation for the International Nongovernmental Development of Space (FINDS) announced another private space prize. They offered the $250,000 “Cheap Access to Space” (CATS) Prize for the first private team to launch a two kilogram payload into space, 200 kilometers or higher, by November 8, 2000. No government funding may be used. In addition, $50,000 will be awarded for the first “near miss” that fails to reach
200 kilometers but does exceed 120 kilometers, provided that the $250,000 prize has not already been won. The CATS prize has a detailed set of rules, including compliance with applicable government laws and regulations.8
Both the X PRIZE and CATS Prize illustrate the growing interest in encouraging private innovation in space technology, and both are aimed particularly at entrepreneurial firms with innovative, low-cost ideas. However, one policy question that arises is whether the size of these prizes will be sufficient to draw serious and sustained entries. This is a particularly important question in the case of the X PRIZE, since a vehicle that can carry humans even into suborbital flight will be very expensive to develop and build. An apparent assumption behind both prizes is that the potential for commercial markets and government contracts will add to the incentives provided by the prizes themselves.
2.1.8 International Computer Go Championship
This prize offers 40,000,000 Taiwanese dollars (about $1.6 million in U.S. currency) for any computer program that can beat a professional player at the oriental game of Go. The sponsors are the computer company Acer and the Ing Chang-Ki Wei-Ch'i Education Foundation of Taipei. They also sponsor annual contests that award NT$200,000 (about U.S. $8,000) for the best computer program for Go entered that year. 9
2.1.9 Loebner Prize
In 1990 Dr. Hugh Loebner pledged a grand prize of $100,000 and a gold medal for the first computer whose responses were indistinguishable from a human's. Every year an annual prize of $2,000 and a bronze medal are awarded to the “most human” computer. The winner of the annual contest is the best entry relative to other entries that year, regardless of how good it is in an absolute sense. The contest was inspired by mathematician Alan Turing, who asked, “Can a machine think?” Turing's suggestion was this: If the responses from a computer were indistinguishable from those of a human, then the computer could be said to be thinking. No one has won the grand prize to date.
2.1.10 EFF Cooperative Computing Challenge
On March 31, 1999, the Electronic Frontier Foundation (EFF) announced prizes up to $250,000 for the discovery of large new prime numbers. According to EFF's press release:
The first million-digit prime found will be worth $50,000; a ten-million-digit prime will claim $100,000; a hundred-million-digit prime garners $150,000; and the finder of the first billion-digit prime will receive $250,000. The largest known prime number . . . has 909,526 digits. 10
The prizes are designed to encourage cooperative computing. No single supercomputer is likely to solve this problem soon, but large numbers of personal computers linked through the Internet could tackle the problem. “In the process,” according the EFF press release, “EFF hopes to inspire experts to apply collaborative computing to large problems, and thereby foster new technologies and opportunities for everyone.”
2.1.11 Feynman Prizes
The Foresight Institute, a nonprofit educational foundation in Palo Alto, California, offers a set of prizes named for the late physicist Richard Feynman. These prizes encourage and reward scientific and technical progress in the field of nanotechnology, which the Institute defines as “the coming ability to build materials and products with atomic precision.”
The grand prize will be at least $250,000 and will be awarded for the demonstration of a 50-nanometer 8-bit adder and a 100-nanometer robot arm. Starting in 1997, the Institute awards two $5,000 prizes each year—one for the best work published in recent years on experimental aspects of nanotechnology, and one for the best theoretical work of recent years. The Institute will award annual prizes until someone wins the grand prize, at which point the series of annual prizes will end.11
2.1.12 EU Information Technology Prize
The annual European Information Society Technology (IST) Prize12 is organized jointly by the IST program of the European Commission 's DG XIII and Euro-CASE, the European Council of Applied Sciences and Engineering. The contest is open to companies, laboratories, universities, and others in Europe and Israel. Each year, three grand prizes are awarded (200,000 euros and a trophy) and 25 winner prizes are awarded (5,000 euros and a certificate). Unlike most of the contests described above, this one does not have a precise technical objective. The prize's Web page states that awards “are made for outstanding contributions to generating and converting innovative ideas and R&D results into marketable products. ”13
The IST Prize can be labeled a combination inducement/recognition award. Along with the recognition of past efforts, this contest also encourages European researchers to develop new technologies. The program then tries to help winning researchers refine and market their products by publicizing the results and providing what the Web page calls a “blue-chip reference for all stakeholders, whether upstream financiers or downstream customers.”
2.1.13 Wolfskehl Prize for Proving Fermat's Last Theorem
Inducement prizes can be offered to encourage advances in science and mathematics as well as technology. An example is the Wolfskehl Prize, created in 1908 to reward whomsoever could prove Fermat's Last Theorem. The 17th century French
mathematician Pierre de Fermat argued, in what became known as his Last Theorem, that the equation xn+ yn=zn has no whole number solutions for n greater than 2. Paul Wolfskehl, a German industrialist, had an interest in mathematics, and upon his death in 1908 his will bequeathed a large portion of his fortune for the prize.14
Initially, the prize attracted few ideas from serious mathematicians, since the problem has longed seemed difficult, even a lost cause. However, the prize did attract a whole new audience of eager amateurs, none of whom succeeded. In the early 1990s, British-born Princeton professor Andrew Wiles began an eight-year intensive effort to prove the theorem. He finally succeeded, and on June 17, 1997, Wiles collected the Wolfskehl Prize, worth $50,000.
2.2 Recognition Prizes
The number of recognition prizes in science and technology is large and growing. Harriet Zuckerman estimates that as of 1992 there were some 3,000 science prizes available in North America alone, 5 times as many as 20 years earlier. Some of the newer awards are in the same fields as the Nobel prizes, while others are conscious attempts to create prestigious awards in fields not covered by the Nobels. 15
As mentioned earlier, recognition prizes may have multiple purposes. Some, such as the Lasker medical awards, explicitly try to build public support for research as well as recognize the achievements of individuals. Prizes also may seek to encourage young people to enter careers in science, engineering, and medicine.
2.2.1 Typical Recognition Prizes
Some of the better-known recognition awards in science, engineering, and technology are listed below.16 (The names of the administering organizations are included in parentheses.)
Nobel prizes in physics, chemistry, and physiology and medicine (Royal Swedish Academy of Sciences)
Japan Prize for science and technology (Science and Technology Foundation of Japan, a Japanese government agency)
Draper Award for engineering (National Academy of Engineering)
Lemelson-MIT Prize for innovation and invention (MIT)
MacRobert Award for engineering (Britain's Royal Academy of Engineering)
Robert J. Collier Trophy for aeronautics and astronautics (National Aeronautic Association)
Goddard Astronautics Award (American Institute of Aeronautics and Astronautics)
A.M. Turinig Awards (Association for Computing Machinery)
Lasker Awards for Medical Research (Albert and Mary Lasker Foundation)
Bower Awards for science and business leadership (the Franklin Institute)
Fields Medals for mathematics
Tyler Prize for Environmental Achievement (University of Southern California)
Vetlesen Prize for earth sciences (Columbia University)
Crafoord Prize for mathematics, astronomy, biosciences, and geosciences (Royal Swedish Academy of Sciences)
Rolf Schock Prizes for logic and philosophy and mathematics (Royal Swedish Academy of Sciences)
Kyoto Awards for advanced technology and basic sciences (Inamori Foundation)
Wolf Prizes for agriculture, chemistry, mathematics, medicine, and physics (Wolf Foundation, Israel)
Balzan Prizes for physical, mathematical and natural sciences, and for medicine (International Balzan Foundation, Switzerland and Italy)
General Motors Cancer Research Center Awards (GM Cancer Research Foundation)
Honda Prize for “eco-technology” (Honda Foundation, Japan)
Marcus Wallenberg Prize for research of importance to forestry and forest industries (Marcus Wallenberg Foundation, Sweden)
Italgas Prize for Research and Technological Innovation (Italgas Prize Secretariat, Italy)
Volvo Environment Prize (Volvo Corporation, Sweden)
Enrico Fermi Award (U.S. Department of Energy)
2.2.2 Combination Recognition Prizes/Grant Awards
The following are examples of prizes that are not just honorific but also provide support for future research. The first two are sponsored by the U.S. government agencies:
Alan T. Waterman Award
The purpose of this annual National Science Foundation award is provide recognition for and support of outstanding young researchers who are in the forefront of their field of science, mathematics, or engineering. One does not apply for the award; the National Science Board solicits nominations and makes an annual selection. United States citizens or permanent residents who are 35 years of age or younger, or not more than 5 years beyond receiving their Ph.D. degrees, are eligible. Each winner receives a medal and a grant of $500,000 over a 3-year period. The award thus combines a recognition component and a grant component. Congress authorized the award in
1975, in honor of Alan T. Waterman, the first NSF director, and to mark the twenty-fifth anniversary of the NSF.
Christopher Columbus Fellowship Foundation
The Christopher Columbus Fellowship Foundation, an independent federal agency established by Congress in 1992, gives an annual $100,000 Columbus Foundation Award. First presented in 1996 and awarded in conjunction with Discover magazine, the Foundation calls these awards “fellowship grants.” Each “is intended to recognize an individual American who has improved, or is attempting to improve, the world through ingenuity and innovation, and to provide incentive and opportunity for continuing research. ” These prizes, by themselves, are unlikely to induce researchers to undertake work that they would not otherwise have pursued, but the prize money does support additional research that the Foundation thinks is useful.
Privately Funded Awards
Zuckerman identifies several private awards that provide both recognition and research funding. They include the Donald Bren Fellowships at the University of California at Irvine, the Prix Louis Jeantet, and MacArthur Fellows Awards.17
1 In some nontechnology contests, the winner is picked through a random selection process. Ordinary raffles are one example. However, this paper focuses on technology contests in which people submit prizes that are judged for technical merit.
2 One needs to distinguish between the terms “technology,” “technological innovation,” and “innovation.” One can design a contest to promote one or more of them, but they are different. A technology is a specific tool or technique. A technological innovation, as the term is used in this paper, is the ability to achieve some practical goal but not necessarily in an economically viable way. Lindbergh's flight is an example. A technological innovation may or may not involve research or new technologies; often it involves the creative integration or extension of existing technologies. A full innovation is viable in the marketplace as well as technologically viable. The distinctions made here build on Stephen J. Kline and Nathan Rosenberg, “An Overview of Innovation,” in Ralph Landau and Nathan Rosenberg, editors, The Positive Sum Strategy, Washington: National Academy Press, 1986. They cite three features of innovation. First, in the commercial world a successful innovation must not only be technically sound but also in tune with the market. Second, innovations often involve the creative integration of a number of technologies. Third, innovations may or may not involve new research and new technologies.
3 Racing events, such as car races and aircraft races, may or may not qualify as technology contests. If the contests encourage and reward improvements in performance, then they qualify as technology contests. But if they require fixed technology, they are not events that promote technological innovation.
4 The discussion here draws on Dava Sobel, Longitude: The True Story of the Lone Genius Who Solved the Greatest Scientific Problem of His Time, New York and London: Penguin Books, 1995.
5 This section draws, in part, on a memorandum from Roger D. Launius of NASA, “Talking Points on Aeronautical Prizes and Innovation,” dated November 5, 1998. His assistance is gratefully acknowledged.
6 Defense procurement in general can be seen as a way to create prizes for innovation in the form of positive economic profit on production contracts. Companies submit bids and compete for the “prize” of procurement
contracts. For discussions of this issue, see two articles by William P. Rogerson: “Profit Regulation of Defense Contractors and Prizes for Innovation,” Journal of Political Economy, 1989, vol. 97, no. 6, pp. 1284–1305; and “Economic Incentives and the Defense Procurement Process, ” Journal of Economic Perspectives, vol. 8, no. 4, fall 1994, pp. 65–90.
7 See www.xprize.org. Last date accessed: 15 June 1999
8 For a general description of the CATS Prize, see www.space-frontier.org/EVENTS/CATSPRIZE_1/. For detailed rules, see http://www.space-frontier.org/EVENTS/CATSPRIZE_1/rules.html. Last date accessed: 15 June 1999.
9 See www.usgo.org/computer/icgc.html. Last date accessed: 15 June 1999.
10 See http://www.eff.org/coop-awards/prime-release1.html. Last date accessed: 15 June 1999.
11 Foresight Institute Web page, www.foresight.org.
12 Through 1998 the prize was called the European IT Prize. For 1999, the name was changed to the European IST Prize.
14 This description of the Wolkskehl prize is taken from Simon Singh, Fermat's Enigma: The Epic Quest to Solve the World's Greatest Mathematical Problem, New York: Doubleday, 1997, particularly pages 121–125 and 284.
15 Harriet Zuckerman, “The Proliferation of Prizes: Nobel Complements and Nobel Surrogates in the Reward System of Science,” Theoretical Medicine, 13:217–231, 1992, page 217.
16 Notes: This brief list is not meant to be comprehensive. For a complete list, see Gale Research International, editor, Awards, Honors and Prizes, 15th edition, Volumes 1-2, Detroit: Gale Research International, 1999. Almost all of the prizes in the brief list above have Web pages; URLs for these are available from this paper's author. Also, several of the organizations listed above give prizes not only in science and technology but also in other fields, such as the arts; the Schock, Kyoto, Wolf, and Balzan prizes are examples. Only their science and technology awards are mentioned in this list.
17 Zuckerman, page 218.