Prizes are flourishing

by on December 13, 2016 at 1:02 am in Economics, Science, Uncategorized, Web/Tech | Permalink

Stumped for solutions to hundreds of industrial and technical problems, businesses and governments alike are turning the search for innovative ideas into prize-worthy puzzles that capitalize on the ingenuity of the crowd.

At a time when the pace of innovation seems to be slowing, prize sponsors hope that today’s hackers and makers can step into the breach and jump-start progress in a way that today’s research institutions—with their many constituencies and restraints—are struggling to do.

Improve smartphone voice recognition? There’s a $10,000 prize for that. Design a delivery drone? $50,000. Extend the human lifespan? Venture capitalist Dr. Joon Yun offers the $1 million Palo Alto Longevity Prizes. Diagnose antibiotic resistance? That’s worth $20 million. And if anyone can profitably repurpose the carbon emissions involved in global warming, there are prizes totaling $55 million in the offing.

“You name it, there is a prize for it,” said Karim Lakhani at the Harvard Business School’s Crowd Innovation Lab, who has helped run 650 innovation contests in the past six years.

In addition, crowdsourcing companies such as InnoCentive Inc., NineSigma, and Kaggle have posted hundreds of these lucrative research contests on behalf of corporate and government clients, offering cash prizes up to $1 million for practical problems in industrial chemistry, remote sensing, plant genetics and dozens of other technical disciplines. Among them, the three companies can draw on the expertise of two million freelance researchers who have registered for access to the prize challenges.

All told, more than 30,000 significant prizes are awarded every year worth $2 billion and growing, according to McKinsey & Co. The total value of purses from the 219 largest prizes has tripled in the past 10 years. Not only are there more prizes than ever, but nearly 80% of all the major new prizes announced since 1991 are designed to spur specific innovations.

Yet here is a cautionary note:

To be sure, there is little evidence that crowdsourcing competitions have significantly altered the innovation landscape yet. “Prizes are important, but they are not the ultimate incentive for innovation” said Luciano Kay, a research fellow at the University of California at Santa Barbara who studies incentive prizes. “They are not big enough to change how industry works in general.”

Here is the full Robert Lee Hotz WSJ article.  Here are previous MR posts on prizes.  Here is an MRU video on prizes.  Here is my 2007 talk at Google on prizes as a means of funding innovation.

For the pointer I thank Ray Lopez.

1 Steve Sailer December 13, 2016 at 1:41 am

One thing I’ve noticed is that it’s practically impossible to create a new science prize that will get even 1% of the publicity of the Nobel Prizes.

For example, the Crafoord Prize was set up in 1980 to complement the Nobel Prize by rewarding scientists in fields that don’t have Nobels. The King of Sweden gives out the medals. It really ought to be almost as famous as the Nobels by now, but it’s not.

Similarly the Breakthrough Prize is funded by super rich people such as Mark Zuckerberg and the lady who used to be married to one of the Google guys. It’s lavishly funded at $3 million per scientist and often goes to in-the-news scientists like the CRISPR ladies. And yet I never hear of it in the news.

In contrast, the Economics quasi-Nobel is a big deal because it has the word “Nobel” in its name and the Nobel brand is really good.

As the President-Elect would say, branding works.

2 Steve Sailer December 13, 2016 at 1:46 am

Perhaps some of the newer prizes should be merged into the Nobel brand. My vague impression is that the Nobel isn’t doing all that well money-wise so it can’t afford to expand into new categories. But there is lots of money out there that would like to reward scientists and you’d think there ought to be a solution to how to expand public appreciation for more types of scientists.

3 mulp December 13, 2016 at 2:50 am

No one accomplishes anything useful to get a Nobel Prize. No one who works to win a Nobel accomplishes anything worthy of a Nobel.

The X prize class competitions are in reality competitions to gain meetings with venture capitalists. They provide the opportunity to make a pitch for funding to really try to innovate, which today costs billions.

4 dearieme December 13, 2016 at 11:47 am

They could economise by ditching the Peace and Literature Prizes, instead of using them to make lugubrious Scandowegian jokes.

5 Jaffe December 13, 2016 at 3:26 am

They just recently had the Breakthrough Prize ceremony on the National Geographic channel. I thought it was notable that the level of celebrities in attendance dropped off heavily from last year.

They held it in Mountain View, CA. It clearly needs to be in LA or NY if they want to get a bunch of the A-list celebrities to be in attendance.

I imagine in the Trump years celebs will love to signal how much they “love science”. I think the Prize has a lot of room to grow.

6 JWatts December 13, 2016 at 1:33 pm

“I imagine in the Trump years celebs will love to signal how much they “love science”.”

But they can’t be bothered to make a trip from LA to Mountain View?

7 Ray Lopez December 13, 2016 at 8:36 am

Everybody who bemoans the lack of publicity for a prize is falling into “Old School” thinking, which, sadly IMO, is the modus operandi for how inventors get compensation: societal blessings. A businessman giving a pat on the back, a bronze medal and an ‘atta boy’ is considered enough compensation for coming up with a groundbreaking invention (Kary Millis got 10k for inventing PCR DNA replication, which spawned an entire industry) . It should be (in my idealized Ayn Rand style alternate universe) cold card cash only.

“For the pointer I thank Ray Lopez.” – damn straight. Stuff I’ve said about IP nobody has even seen in print yet, but it’s been told to the highest authorities in the land (without dropping names). Trouble is, nobody yet in society really cares about pushing the Production Possibilities Frontier (PPF) curve out faster. They’re actually perfectly OK with the Great Stagnation. In many ways IP is like free trade. Give Average Joe the choice between more, better, cheaper and job security and the status quo, they’ll pick job security and the status quo every time. We’d be living forever in flying cars if we adopted my plans, in a couple of generations, but nobody cares.

Bonus trivia: invention is not just flying cars. This week’s Economist has an article on the Koch brothers, especially C. Koch, who’s innovative management styles added value tremendously, and in a dying industry (manufacturing, just look at any graph). Innovator Charles Koch is a inventor, as was his father (who was also a patent holder)

8 carlospln December 13, 2016 at 2:20 pm

Its ‘Mullis’

9 Really? December 13, 2016 at 1:59 am

Improve smartphone voice recognition? Patent it, you’re a millionaire
Design a delivery drone? Patent it, you’re a millionaire
Extend the human lifespan? Patent it, you’re a billionaire

10 Mark Thorson December 13, 2016 at 2:19 am

Agreed. The right way is to sew up IP rights. Prizes seem to me like a scam to cheat inventors out of their IP — that’s the case in screenwriting competitions in which the sponsors get to see a bunch of treatments of their characters without paying for them. Architecture competitions can be like that, though often the sponsor invites the entrants and pays them for creating an entry. Prizes might make sense for stuff where a patent would be worthless or unobtainable, like a method to remove floating plastic waste from the ocean.

11 stephan December 13, 2016 at 2:17 am

In mathematics there are since 2000 $ 1M prizes each for the solution of the 7 Clay Millennium problems . Of course they’re extremely hard ( Riemann Hypothesis, P vs NP etc..) so far only one has been solved ( The Poincare Conjecture)

12 stephan December 13, 2016 at 2:18 am

and I must add the solver Grigori Perelman refused the prize and the money

13 Ray Lopez December 13, 2016 at 8:44 am

Typical (or rather common) ‘today’s inventor’ thinking. I’ve met distinguished scientists who did not have a single patent and were proud of it. Today people invent for love,not money. Most geeks are like that. Google the geek founder of, who actually gave away his entire IPO money worth tens of millions (or was it 100s? Saw it the other day) to his friends. People who love money and are smart are drawn to medicine, law, Wall Street, business, not science, unless you don’t have wherewithal (i.e. a non-US citizen aspiring to get a toehold in the USA, read, Chinese or Indian). Sad but true.

14 dearieme December 13, 2016 at 11:50 am

Modern science education and academic organisation could almost be designed to drive intelligent, spirited people away from science.

15 Luis Pedro Coelho December 13, 2016 at 4:15 am

“Improve smartphone voice recognition? There’s a $10,000 prize for that. Design a delivery drone? $50,000. Extend the human lifespan? Venture capitalist Dr. Joon Yun offers the $1 million Palo Alto Longevity Prizes. Diagnose antibiotic resistance? That’s worth $20 million. And if anyone can profitably repurpose the carbon emissions involved in global warming, there are prizes totaling $55 million in the offing.”


These are all puny amounts.

For the most part, they pale next to how much those inventions are worth in the for-profit market. When compared to traditional grant-funded science, those are all smallish amounts: a single 20 million grant would be a huge grant (although not unheard of), but a research fund with 20 million for antibiotic resistance over a decade would not really make the news.

Some of these prizes would need an extra zero or even two to even pay market wages to the researchers who win, let alone those that fail to win. Thus, they mostly serve as extra publicity for academics who would anyway do the same things and who are paid from other sources (which is a positive thing) or as a way to influence how money from other sources actually gets spent.

Prizes would be great if you really want to think big: when will the major governments put up a 10 billion USD (yes, with a B) prize for a new antibiotic class or, how about, 100 billion or even 1 trillion for working, cheap, and scalable nuclear fusion? If you think that these amounts are outrageous, then please never again refer to climate change or antibiotic resistance as major problems of our time.

16 Axa December 13, 2016 at 7:24 am

Haha, if antibiotic resistance ever becomes a mainstream problem it will be too late to solve it 😉

Forward-thinking people have understood this paradox and started working on it. Of course, 50% of a nation research funding going to this would may be a waste. But, there should be a compromise, 0.1%, 0.5%. I’m no science fund manager but there should be constant secure funding to do research on this potentially catastrophic issue.

17 Luis Pedro Coelho December 13, 2016 at 10:00 am

Ab resistance is already a problem, it kills thousands per year. It’s not a binary microbes are naive/microbes are resistance, but rather a gradient.


10 billion USD is not 50% of the research funding.

It’s about 1/3 of the current NIH yearly budget (there is also NSF, DOE on the public side and a lot of privately funded research, mostly for profit).

If this was done between, say, US, EU, Japan, and China, over several years, it may not be much more than the 0.5% of the budget that you mention.

18 Ray Lopez December 13, 2016 at 8:50 am

+1 Luis Pedro Coelho . I would add most of the time patents are hard for individuals to procure. To really protect something you need a family of patents (not just one) and each patent costs a minimum of 5-10k in the USA (for entire world it’s actually prohibitive, as in several hundred thousand per patent, last I checked) and you need a minimum of around 10 to 20 patents. So that’s 50k-100k USD for each invention (minimum, and for a truly groundbreaking invention I would not feel comfortable with so few patents). Not to mention the (minimum) 1M USD you need for patent litigation, to establish a precedent that your invention is worthy of licensing. Then you must settle for 5% or less (varies by industry) licensing fee. The myth that you can ask for whatever you want if you hold a single patent, and stop the entire industry from practicing your invention, is a myth.

19 Pearl Y December 13, 2016 at 5:50 am

As a scientist, I resent prizes and crowdsourcing, and I think they are stupid. The sponsor is trying to trick many people into working on a problem, when they don’t have enough money to properly fund the required research. The researchers who try for the prize but fail get nothing. Tremendously inefficient allocation of resources.
At the company I work at, our “Open Innovation” department forces us to work with InnoCentive, NineSigma, and other companies like this, to issue proposals to the public. The proposals take a lot of time to craft properly, and the answers take a lot of time to review – it’s like Human Resources sorting through resumes, but with highly trained scientists doing the sorting. Most of the answers are “bad”, not necessary because they’re not intelligent, but because they’re uninformed about fundamental science and technical limitations. Out of all the stuff we tried, I’ve never seen any of these projects have a successful outcome.
I think the only context in which prizes are effective is as a badge of honor (not a monetary incentive) when people are willing to work on the problem for free in their spare time because they find it intellectually interesting. And that mostly only applies to software challenges. No garage researcher or hobbyists is going to impove human longevity, no matter how big the prize is. Most of the lauded prizes (e.g. Nobel) just acknowledge in retrospect something that the researcher was doing anyway.

20 Troll me December 13, 2016 at 6:58 am

“The sponsor is trying to trick many people into working on a problem, when they don’t have enough money to properly fund the required research.”

There’s no trick. That’s exactly how it’s supposed to work.

If you don’t think the thing is worth dedicating your grey matter to, probably the prize wouldn’t attract you. But just you wait until you see that 100k prize sitting next to something you’ve had a pet theory on for 20 years and wouldn’t mind setting some time aside for …

21 Ray Lopez December 13, 2016 at 8:53 am

+1 to Pearl, who is saying prize funds are too small at present and not guaranteed. In my alternative universe even ‘runners up’ would get prizes, and in my IP scheme even an inventor who was not first, but came up (and could document steps) with an invention independently of who was first would get compensation. Simultaneous invention is very common, I know from experience.

22 Axa December 13, 2016 at 7:18 am

Prizes? There are funds knows as post-doc grants that have more or less the same objective. The difference is that the post-doc grant is cashed before or while the research is done and the prize comes only if there are positive results. Research is bit like gambling, you bet on ideas and a few times you win.

The prizes idea makes looks the use of funding as more efficient use of resources, but is it? As a guy with a PhD, I’d say prizes are good but they can’t be the main driver or funding source. If prizes become mainstream, the prize giver will feel good at the cost of making scientists prefer mining, oil or finance. If doing an average job at big-mining company yields a secure income, why do a intellectually harder job in science and risk no income? The boring truth is that geeks only need a secure middle class income to produce results, no more no less.

23 Turkey Vulture December 13, 2016 at 8:29 am

Do these prizes have some sort of requirement that the associated IP be released into the public domain?

24 Some Other Tom (I Forget Which) December 13, 2016 at 9:43 am

I believe this is the first time this year I thought from seeing the title of my post in the RSS reader that “this is an Alex post,” but it turned out to be a Tyler post.

25 Hadur December 13, 2016 at 10:09 am

Wake me up when these prizes are actually awarded.

26 Bob December 13, 2016 at 3:15 pm

The problem is that most of these are not objective prizes that are awarded for accomplishing certain specific milestones. They tend to be vaguely worded awards granted for pleasing or satisfying a body of people who award the prizes.

For examples of objective prizes based on specific milestones, see prizes such as the Orteig Prize and the Longitude Prize.

Both professional scientists/researchers and wealthy sponsors of awards tend to dislike actual objective prizes because they tend to open up competition to outsiders and divert research funds and prestige away from themselves.

27 Zach December 13, 2016 at 8:13 pm

I’m skeptical about the value of a $10,000 prize for “improving smartphone voice recognition” or other such piddly amounts for major open problems. $10,000 isn’t enough to finance more than a couple of months of research, and saying you won a ten thousand dollar prize isn’t prestigious enough to get a job with. I have nothing against giving a nice Christmas bonus to researchers who have come up with impressive results, but I don’t think these prizes are enough to change people’s behavior.

To change people’s behavior, I think you need to either offer lots of money and lots of prestige or a steady amount of money plus some job security / ability to find a new job afterwards. Basically, Nobel prizes or normal research jobs.

28 Thanatos Savehn December 13, 2016 at 8:16 pm

The effort to automate scientific discovery by way of significance testing has been an expensive failure and in the biomedical sciences also a tragic waste of precious time for those suffering dread diseases. Collaboration and interdisciplinary teams have proven far better at snagging big grants than making big discoveries. Part of the problem arises from dogmatic research paradigms that have been internalized by grant agencies and institutionalized by grant seekers. Another rises from the crushing conformity created by an academy nowadays interested mainly in patentable discoveries that advance its bottom line rather than advance human knowledge. So what’s the harm in (a) demanding pre-registration and posting of all subsequently captured data so that it can be pondered by would be Michael Faradays and Barry Marshalls; (b) funding replication studies so that polymaths can sort industrial science’s wheat from its chaff; and, (c) give them some filthy lucre in addition to fame when their light bulbs go off? It’s a threat to the academy and the poor minions who sold their souls to it, that’s what.

Comments on this entry are closed.

Previous post:

Next post: