[Ip-health] European Commission Blog: Prizes as a new approach to funding research and innovation?

Jamie Love james.love at keionline.org
Fri Apr 8 08:22:28 PDT 2011

The European Commission is expanding its work on innovation prizes.
This blog is part of a larger set of EC activities.  Jamie


Prizes as a new approach to funding research and innovation?
February 23, 2011

One of the questions in the Green Paper is about introducing
“inducement prizes” as a new approach in EU research and innovation
funding. To discuss this point, we invited David Osimo, a co-organiser
of the upcoming “Prize Summit” to give his thoughts. David sees prizes
as a new trend in research and innovation funding which can reach out
to innovators, reduce administrative burdens, and help turn research
results into marketable solutions. But he also warns that they are not
a panacea: they only work in certain conditions and there is a risk of
“prizes overload”. We would welcome other comments.

Prize-based competition for funding research and innovation: flavour
of the day or sustainable policy solution? By David Osimo

We live through important times in the context of innovation policy in
Europe. Just after launching the flagship Innovation Union, the
European Commission recently opened the consultation
(http://ec.europa.eu/research/csfri/index_en.cfm ) on the future
research and innovation support measures. The wider macro-economic
context is even more unstable, between the freeze in public spending
and the ever increasing speed of innovation, with new players (both
countries and companies) rapidly growing and others rapidly declining,
and totally new products and markets being created from scratch often
from unexpected sources.

In this context, we need to look at the current policy measures and
ask ourselves: how can we get most out of the funding instruments for
innovation? We need to look not only at the funding level and the
research priorities, but at HOW the funding instruments are designed.

Evaluation studies and experts agree on the key issues to be addressed:

- the capacity to involve the real innovators, rather than the best

- the administrative simplification both for government and for recipients

- the capacity to turn research results into marketable solutions

 These are not new, but there is now an emerging trend that could help
addressing them. In the last years, mostly in the US, there has been
an increasing usage of prizes, rather than grants. Companies and
governments have set up “challenges”, where the financial reward goes
not to the best proposals, but to the innovators who come up with the
best working solutions.Examples are the DARPA challenge
(http://www.darpa.mil/grandchallenge/index.asp ) for the self-driving
car, or the recent Australian prize for the best algorithm to identify
patient at risk (http://www.heritagehealthprize.com ).

This trend is becoming extremely powerful and structured, not just a
one-off exercise. The US government has created a dedicated platform,
called www.challenge.gov , to enable the organisation of competition
by any government, and has promulgated the America Competes
Act(http://en.wikipedia.org/wiki/America_COMPETES_Act ) to simplify
and streamline the organisation of challenges by government. In the
private sector, not only challenges are being organised by the largest
corporation, but there are now many companies who have as core
business the organisation of prizes for both government and business.

The results are highly promising precisely to address the three issues
listed above: these competitions are able to attract the best
innovators, even those traditionally not engaged with government
funding. They reward concrete results, not proposals. They don’t
require complex control systems. They are able to attract a far
superior number of high-quality results than traditional grant

I was personally involved in the design of the Flemish INCA award
(http://www.inca-award.eu/INCA09 ): with a total prize of only 20.000
Euros we received 35 innovative working applications, ranging from
Internet of Things to smartphone apps.

Yet we must not consider prizes a panacea: they work only in certain
conditions, for example where barriers to entry are low and innovation
is not capital-intensive. They have to be properly promoted and
designed. It is not clear to what extent they can upscale or there is
a risk of prizes overload. Prizes tend to overlook basic research,
which can lead to fundamental but unexpected results. Intellectual
Property has to be clear, and in some countries such as Italy there
are administrative barriers to the organisation of prizes.

In conclusion, prizes offer opportunities that the current debate
around EU innovation policy should take closely into account. But we
need to have a clearer picture of the state of the art, assess the
impacts and the lessons learnt, understand the potential for upscaling
and the risks. These issues will be discussed at the Prize Summit
(http://theprizesummit.com ), a high-level conference in London next
April the 8th. Practitioners from all over the world will come
together to share their knowledge and hands-on experience on the
opportunities and limitations of prize-based competitions.

What is clear is that today there is no one-size-fits–all solution:
governments have to increasingly experiment with innovation policy and
continuously re-design their measures, rapidly learning from the
experimentation. Prizes are the “flavour of the day” but it’s only by
concrete experimentation that we’ll understand the implications and be
able to properly design the “next generation” of policy instruments.


The blog also includes 18 comments

James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.

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