The steering committee recommends that Congress encourage federal agencies to experiment more extensively with inducement prize contests in science and technology—competitions designed to foster progress toward or achievement of a specific objective by offering a named prize or award—as a complement to their existing portfolio of science and technology policy instruments.
At present the U.S. federal government makes very little use of inducement prizes in science and technology. However, the recent history of inducement prizes, most privately sponsored, and a growing body of research on contests, grants, procurement contracts, and the optimal design of federal R&D programs, suggest that it may make sense for the federal government to make more extensive use of explicit inducement prizes to advance research, technology development, and technology deployment toward specific societal ends.
The steering committee views inducement prizes as a potential complement to, and not a substitute for, the primary instruments of direct federal support of research and innovation—peer-reviewed grants and procurement contracts. When compared with traditional research grants and procurement contracts, inducement prizes appear to have several comparative strengths which may be advantageous in the pursuit of particular scientific and technological objectives. Specifically these include:
the ability of prize contests to attract a broader spectrum of ideas and participants by reducing the costs and other bureaucratic barriers to participation by individuals or firms;
the ability of federal agencies to shift more of the risk for achieving or striving toward a prize objective from the agency proper to the contestants;
the potential of prize contests for leveraging the financial resources of sponsors; and
the capacity of prizes for educating, inspiring, and occasionally mobilizing the public with respect to particular scientific, technological, and societal objectives.
Inducement prize contests may be used to pursue many different objectives —scientific, technological and societal. In particular, the steering committee believes they might be used profitably to identify new or unorthodox ideas or approaches to particular challenges, to demonstrate the feasibility or potential of particular technologies, to promote the development and diffusion of specific technologies, to address intractable or neglected societal challenges, or to educate the public about the excitement and usefulness of research and innovation. Moreover, prize contests can be designed to stimulate effort across the spectrum of research and innovation efforts, including basic research, technology development, technology deployment and diffusion, and managerial/organizational innovation.
To encourage agencies to experiment with inducement prize contests, Congress should consider providing explicit statutory authority and, where appropriate, credible funding mechanisms for agencies to sponsor and/or fund such contests. Congress and federal agencies should approach contest structures and administration flexibly, and consider using a variety of
contest models, including contests that are funded and administered by agencies, contests that are initiated and administered by agencies yet privately funded, and contests that are initiated by agencies but privately funded and administered.
The design of any such experiment should include mechanisms for appropriating prize money, for flexibly distributing intellectual property rights, and for reducing political influence. Moreover, prize contest rules should be seen as transparent, simple, fair, and unbiased. Contest rewards should be commensurate with the effort required and goals sought. Finally, if such a policy experiment is initiated, it should be time-limited, and the use of prizes and contests should be evaluated at specified intervals by the agencies involved to determine their effectiveness and impact.