The usage of ‘problem prizes’ to expand nice innovation coverage

Using 'challenge prizes' to develop great innovation policy




If you wish to have any further convincing that Australian politics faces difficult instances, simply glance to Hansard.

The phrase ‘problem’ hasn’t ever seemed in additional paperwork in Hansard than it did right through the 44th and 45th Parliaments.

Most probably a mix of increasing govt purposes and the rise in quantity and complexity of demanding situations confronted, it’s changing into transparent that new coverage equipment are required to reply.

What’s extra, different nations appear to be finding out this sooner than we’re.

‘Challenge-based coverage’, innovation video games, tournaments, demanding situations and prizes are on the upward thrust right through Canada, the United Kingdom, US and EU; innovation coverage gauntlets are being thrown down internationally.

READ MORE: Frugal innovation: five low cost inventions any company can undertake

Somewhat than just supporting innovation, we’re finding out to urge it.1

This isn’t to mention Australia hasn’t performed with the theory.

The federal government’s announcement within the Funds of $3.6 million over two years for ‘nationwide innovation video games’ is solely the most recent in a string of Australian-funded innovation demanding situations.

The Division of International Affairs and Business by myself has contributed to the Pacific Humanitarian Problem,’s Affect Problem Australia, the Indo-Pacific Building Prize, and the Blue Financial system Problem, in combination handing out greater than $10 million to innovators.

Again in 2011, the Division of Innovation, Trade, Science and Analysis highlighted Nesta’s paintings on ‘social problem prizes’ as a brand new world construction that “encourage[s] communities to expand imaginative and efficient answers to advanced social issues”.

READ MORE: A brand new international of labor for presidency

In 2015, the then Minister for Trade and Science noticed demanding situations as “a very powerful platform to reinforce, rejoice and advertise Australian ingenuity and to lend a hand force concepts for commercialisation”.

In 2017, CSIRO release — a world listing of lively demanding situations.

Previous this yr, the Division of Trade, Innovation and Science ran the primary Problem-based Innovation Discussion board, taking a look on the “alternatives for trade, analysis and govt to paintings in combination to unravel actual international issues”.

However ‘problem prizes’ – a subset of innovation demanding situations which can be proving their price in quite a lot of coverage settings – are continuously misunderstood through the ones they are able to lend a hand probably the most.

At Nesta, we’ve realized some classes through the years about when and the way problem prizes make for just right innovation coverage equipment.

What’s a ‘problem prize’?

Problem prizes be offering a praise to whoever can first or maximum successfully meet an outlined problem.

The praise is continuously monetary, however too can come with get entry to to experience, reinforce for construction and commercialisation, publicity to larger networks, and exposure.

Their heritage is firmly rooted within the public sector; the unique Longitude Prize of 1714 helped to crack maritime navigation.

Margarine, canned items and trendy billiard balls all resulted from nationwide innovation demanding situations.

After fuelling a lot of the contest that outlined the early 20th Century aviation generation, they’re going again to their pedigree: the general public sector.

Nicholas Gruen just lately wrote that we continuously know what to do, it’s the how that’s difficult for each policymaking and implementation.

READ MORE: We all know WHAT we want to do. Will any person let us know HOW?

That is the gap problem prizes fortunately occupy.

They capitalise on in-depth wisdom of what must occur, the place we’d love to be, what inventions we’d like to look, or which issues we’d like to unravel (wisdom already embedded within the policymaking procedure) however they prevent wanting proposing how this must be accomplished.

From there – with a neatly outlined difficulty definition in hand – they search to expand quite a lot of numerous answers to an issue, preferably to the purpose the place they are able to be judged on their relative advantage and have an effect on.

Crucially, and possibly counter-intuitively, problem prizes don’t seem to be about winners and losers.

They’re about growing cohorts of innovators, marketers and difficulty solvers.

In a super problem prize, candidates will assault the similar difficulty from other angles, permitting judges to make a choice the most productive of a plethora of answers.

Problem prizes paintings absolute best once they reinforce the advance of concepts, spotlight their doable, then step again.

In a way, the finalists are nearly extra necessary than the winners.

When don’t they paintings?

A long way from being the silver bullet of innovation, there are occasions after we know problem prizes aren’t the most productive coverage software.

Like different innovation strategies, they are able to’t ensure luck; when judging the most productive resolution to a particular difficulty it’s continuously arduous to inform the iPods from the Zunes.

A cheap competitor to the early iPod, Microsoft’s Zune would most probably have met an identical judging standards for a problem prize, but was once no longer commercially a hit. Image: Wikipedia

There also are commonplace pitfalls, like no longer giving the fitting reinforce to innovators, or a mismatch between the trouble required to unravel the problem and the presented prize cash.

As well as, there are some problem-specific standards for once they paintings absolute best:

  • If you realize what the most productive resolution is or if just a handful of organisations can clear up the issue, then the trouble of a problem prize may well be wasted.
  • If you’ll be able to’t outline the issue obviously, then you’ll be able to’t be expecting any person to unravel it.
  • If it’s a cultured difficulty or one who calls for price judgements, it may well be arduous to seek out consensus on an answer (particularly given a various judging panel offers energy to a problem prize).
  • In case your problem prize is just to spur innovation in a given box, answers may well be too numerous (asking judges to check apples and oranges).

A chance for Australia

Problem prizes provide an actual alternative for Australian innovation coverage.

They thrive, as an example, within the virtual area (which the CSIRO just lately labelled Australia’s $315bn alternative, “making it a important factor within the country’s ongoing financial luck”).

We’ve observed the Open Up Problem play a number one position in growing open banking in the United Kingdom, spurred through the Festival and Markets Authority.

Nesta could also be running with the United Kingdom’s Solicitors Law Authority to supply virtual applied sciences within the prison sector that make justice extra out there and inexpensive.

The Sensible Towns Problem is letting Canadian communities design their very own data-driven towns.

Problem prizes are already offering tailwinds for some Australian universities; the College of Era Sydney gained $500,000 for a mission that gets rid of arsenic from groundwater in Vietnam, the College of Western Australia has commercialised the microscope-in-a-needle off the again of $30,000 from The Australian Innovation Problem, and researchers from QUT have won $750,000 for RangerBot as a part of the Google Affect Problem, amongst others.

As a technique they’re as at ease enjoying on the margins as they’re capturing for the moon.

XPRIZE has helped take us into area and is now taking a look to the depths of the sea, and the brand new Longitude Prize is tackling rising ranges of antimicrobial resistance.

They’ve additionally been utilized by Essex council to empower native communities.

There’s nonetheless scope for the general public sector to include problem prizes as a cornerstone of innovation coverage.

In 2017, Invoice Ferris known as Australia’s lagging innovation efficiency “a clarion name for nationwide motion”, and this name applies similarly to problem prizes.

CSIRO’s hosts fewer than 10 public demanding situations (together with some on the state degree).

Affect Canada is lately operating 9 demanding situations with plans for no less than 4 extra (together with a AUD$315 million Housing Provide Problem), and UKRI has 15 demanding situations lately funded through their Commercial Technique Problem Fund (of over AUD$8.five billion).

In 2015, america govt took a aware step “to make incentive costs a regular software in each and every company’s toolbox”.

America govt’s now lists 38 lively demanding situations.

Problem prizes are in innovation coverage style.

If we take our lead from Hansard, they must be a treasured software in Australia’s innovation coverage toolkit, too.


  1. Kay L (2011) The impact of inducement prizes on innovation: proof from the Ansari XPrize and the Northrop Grumman Lunar Lander Problem, R&D Control, vol. 41(4).

Tris Dyson is the chief director of Nesta Demanding situations; Oliver Cansdell is a researcher in Nesta Demanding situations, spanning environmental metrics, promotion of STEM abilities and mitigating social isolation.

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