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The Role of Prizes In Innovation 87

Carl Bialik from WSJ writes "The Wall Street Journal's David Wessel assesses the impact on innovation of the increasing number of prizes, such as the X Prize, that reward solvers of intractable problems. From the column: 'Prizes prompt a lot of effort, far more than any sponsor could devote itself, but they generally pay only for success. That's "an important piece of shifting risk from inside the walls of the company and moving it out to the solver community," says Jill Panetta, InnoCentive's chief scientific officer. Competitors for the $10 million prize for the space vehicle spent 10 times that amount trying to win it. Contests also are a mechanism to tap scientific knowledge that's widely dispersed geographically, and not always in obvious places. Since posting its algorithm bounty in October, Netflix has drawn 15,000 entrants from 126 countries. The leading team is from Budapest University of Technology and Economics.'"
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The Role of Prizes In Innovation

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  • The fact is that any team capable of solving these problems is worth MUCH more than any prize offered. Offering a prize is pointless IMO - it's like giving a surgeon a $20 bill every he saves a life.
    • Sheesh most Doctors I know are such incredible cheapskates they'd TAKE the $20.
    • Re: (Score:3, Informative)

      The leading team changes every few days in the Netflix prize. For the longest time, it was a guy from U Toronto called NIPS Reject, then it was the whole ML team at the same uni, then it was, and now it's Team Gravity. It's come to the point where successive improvements are incremental and hardly significant over the previous leader. What should be interesting now is if anyone has the big breakthrough that actually wins the prize. Check out the actual Netflix leaderboard []
    • "it's like giving a surgeon a $20 bill every he saves a life." Uh....he's *asking* for f@cking five thousand. Maybe the spirit of invention is enough of excitement for you, but nothing says "INVENT ME PLEASE" like the chance to pay the bills.
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      It's possible that smart people will do something useful if left on their own, but there are several advantages to a contest:

      - If a specific kind of problem has a real business application, having a contest will get you a pretty good solution much sooner (probably years sooner) than just waiting for the right academic guys to decide they feel like solving your problem. Having a standardized problem description, standardized software interfaces and file formats, and a forum for lots of different people worki
    • If someone will work for the pay on offer, can you really say it is too cheap?
      If you find a (good) surgeon willing to save your life for $20, would you decline?

      Too me, this seems a very interesting alternative to patents. It certainly seems like the economic incentive is enough to drive innovation quite spectacularly. Of course, participating in one of these contests also give you (or your team) good PR. So if this kind of contest ever became common-place it would probably be necessary to up the prize su

  • by Refried Beans ( 70083 ) on Thursday January 25, 2007 @09:17PM (#17761840) Homepage
    If innovators work on a project alone, they have to work really hard to get people to pay attention to their work. If there is a contest at which the organizers are already taking care of the publicity, they have a better chance at turning their work onto better opportunities. All they have to do is make a good showing at the contest.
    • Plus, a contest provides a standardized (usually very difficult) dataset, and standardized metrics for evaluating the result. Provides a fair comparison of everyone's bright idea on a given real-world dataset.
      • Provides a fair comparison of everyone's bright idea on a given real-world dataset.
        However, such can be skewed by relative wealth and favoritism of exclusionary conduct. Factor out market and failures thereof, and you can get a better solution.
  • For the Glory (Score:4, Interesting)

    by Original Replica ( 908688 ) on Thursday January 25, 2007 @09:24PM (#17761910) Journal
    Especially, where universities are concerned, the bragging rights to a well advertised prize can be worth more than the prize itself. Competition also make a great muse.
    • Competition also make a great muse.

      Not to mention the fact that a million buckaroos would make even the most Bohemian/isolationist academic think " could I put that kind of money to good use?"

  • by Anonymous Coward
    Prizes may be of some use. But on the other side of the equation exists the fact that if the prize offered outweighs the social benefit. Besides having an increase in depressed people. More seriously, you have wasted resources and time/energy of everyone who didn't win the prize. Those resources could have been channeled elsewhere or into other useful things.

    Also, circling is the vulture of impossibility .. where a prize is offered to accomplish an impossible task .. resulting in complete waste of resources
    • "Also, circling is the vulture of impossibility .. where a prize is offered to accomplish an impossible task .. resulting in complete waste of resources."

      On the contrary, a prize is offered to accomplish an impossible task [], can be of great educational value.
    • That's what I though when I read

      " important piece of shifting risk from inside the walls of the company and moving it out to the solver community,"

      So depleting the solver community is for the benefit of the "company", why didn't I guess that?
    • Remember that before the winner is chosen, every contestant is in the same boat. They're aware that they might lose. They knew this before they entered the contest. Hopefully, especially with big projects that cost a lot of money, they take this risk into account when they decide to enter the contest. Businesses who bid for projects must to evaluate this risk and deal with it to be successful. The company I work at bids for government (US Military) projects occasionally. Sometimes we don't get the project.
    • The people who tried and failed did not waste their time or energy.

      It is impossible to work long and hard on anything without learning a hell of a lot about the problem domain.
      For example, in the first DARPA "Grand Challenge" to build an autonomous vehicle, all the contestants failed miserably. But, several of the failing teams did brilliantly the following year. Would they have done so well the second year without the knowledge gained through "failure" in the first?
  • Self limiting (Score:2, Insightful)

    by mdsolar ( 1045926 )
    Copernicus never got a prize. His accompishments were just too large to be recognizable. Prizes, especially those mentioned with fixed goals are a lot of fun, but can the truely innovative be discerned in time to reward the inovator? Only sometimes I think.
    Go Solar: -selling-solar.html []
    • by khallow ( 566160 )
      So you're saying that contests and prizes aren't the best possible means for every possible human endeavor? Blasphemy.
      • Re: (Score:2, Insightful)

        by mdsolar ( 1045926 )
        Some ideas and accomplishments seem to just fit and these are easily recognized. The discovery of DNA came about at a time when encoding was something people were thinking about. It just fit and was recognized with a prize. Some discoveries that are true and important may not fit right away, people's thinking needs to stretch so much that recognition comes only when it is too late to award a prize.

        My point, then, is that seeking after recognition is likely to limit your final level of accomplishment.
        • by khallow ( 566160 )
          I disagree. I think a lot of current science is driven by the desire for recognition. And scientific output drops about the time that either the scientist acquires said recognition or becomes more interested in some other goal like raising a family.
          • I think you are most likely correct on the 'a lot' part, I'd even say 'the vast majority' for the simple reason that entry into science is accompanied by many hoops to jump through. Because this is part of the training, the habit of seeking recognition becomes pretty ingrained. And, it is pretty hard to be self-taught these days. It also seems to me that schools that have sought to counter this bias in the past have been cowed by the insistence that the transcripts they issue be comparable with those of
            • by khallow ( 566160 )

              Because this is part of the training, the habit of seeking recognition becomes pretty ingrained.

              Human nature not training IMHO. But I suppose my comments don't negate your point. But since most people have motivations that aren't completely "inner", then there's good reason to consider providing such motivation for things we can clearly see a need for, like cheap(er) access to space or improving human health and longevity.
              • I agree that human nature contains an urge to compete, but I'd add cooperate, contemplate, inquire and many other drives.
                For myself, I like the horse race aspect of those prize competitions. And, I think that competition can bring out more in people than they thought they could do, as well. I just don't think it always can bring out everything they can do. That is the limiting aspect: the goal, however lofty, is still a cutoff of achievement.
                This tag is not about solar power.
                • by khallow ( 566160 )

                  Anyway, the main reason I posted way back when, was because I saw yet another, "prizes can't do everything" post. It's true, but I don't see any serious attempts, even in the original article, to make this claim. There are many flaws going solely with a prize based system. You miss the subtle results that you didn't anticipate would be important. It's not worth using a prize system for minor things (eg, the scientific equivalent of deciding what to wear at home), And prize systems don't help you make decisi

                  • I think some professional societies have been a little too enthusastic when it comes to promoting the prospects for employment in their fields. Your analysis should be included in profesional society literuature. My advisor, in astronomy, had one Ph.D. student partly because he saw the same math as you. But, your mention of math reminds be of another internal drive which is approching the sublime. In this case, any prize that turns up becomes irrelevant. We've seen a recent case of a major prize being d
                    • by khallow ( 566160 )

                      So are you saying that having prizes would cause people to be burned at the stake like poor Mr. Bruno? Of course not. But I don't really understand the point of including his sad tale. It's not like we're seriously going to consider burning people at the stake for having scientific opinions. And I doubt you would claim that if we did so that this wouldn't cripple scientific research in any society which did so (ie, it's not going to prove that most scientists are more interested in persuing the sublime rath

                    • No, I was saying that raising the stakes increases both risks and rewards, Bruno is sort of a limiting case on the risk side. I also think the grapes are sourer on all sides of the fence, just as base motivations are present everywhere as you point out. But, for the level of creativity that might go beyond anything that a prize could adequately recognize, highly refined motivations probably have a role to play of necessity. I like prizes. I just think that they can limit total potential creativity and t
  • by shanen ( 462549 ) on Thursday January 25, 2007 @09:39PM (#17762052) Homepage Journal
    The fundamental idea is so wrong it's just hard to know where to begin. It's related to the trivialization of scientific endeavor and the focus on publicity as more important than reality.

    The days of the solitary inventor who could justify spending months or years pursuing a breakthrough and feel some sort of financial justification because of the expectation of winning a prize are long behind us. There might be some 'low-hanging fruit' still to be found, but not much of it, and if you knew where it was, it would make much more sense to just pick it rather than to offer a prize in hopes of motivating some gold seeker to find it. Major scientific breakthroughs now require serious investments, usually involve large numbers of people and long periods of time, and any profits are far downstream. You *NEED* to have that long-term perspective, not the motivation of a quick fix for a prize. Even the prize seekers admit they just want the publicity to help sell their results.

    By the way, I actually work with researchers from a major lab. Some of them are even leaders in their fields, and have established track records of changing the world for the better far more than I ever will. Some of them have won prestigious awards and prizes, and I'm sure they'll win more in the future. However, it is very clear that they aren't motivated by prizes, and if they were, I'd take odds against them ever accomplishing much of anything.

    Prizes are interesting for 'gold-hunting' pseudo-scientists, not for the actual hard working *REAL* scientists.
    • by caffeinemessiah ( 918089 ) on Thursday January 25, 2007 @09:50PM (#17762166) Journal
      Prizes are interesting for 'gold-hunting' pseudo-scientists, not for the actual hard working *REAL* scientists.

      Just wanted to point out a slight flaw in your idealistic view of science and academia. We'd all LIKE it to be that way, but perhaps you've heard of one other prize that motivates some of the most brilliant scientists in the world in many fields? People spend their whole careers trying to get this prize, not just for the money but for the validation. Say what you will, but very few scientists have shrugged off the Nobel Prize as the goal of "gold-hunting pseudo-scientists".

      Finally, in theoretical computer science and mathematics, it IS still possible for one person or a very small group to come up with a breakthrough. The Poincare conjecture was recently solved largely due to the efforts of a single mathematician. There are other examples, but TCS/math are not as vastly invested in massive research groups as say, particle physics.

      • That's true, but I don't think a Nobel Prize is the reason the winners did what they did. It is just a pat on the back. I think where prizes are really effective is when they are very large, when there is a specific goal stated up front, and that goal can be reached in a relatively short period of time by a small number of people doing something a little innovative. The VC firm, Kliner Perkins, announced that they will be awarding an alternative energy prize with a $100,000 award every year to someone th
      • "The Poincare conjecture was recently solved largely due to the efforts of a single mathematician. "

        How ironic, then, that he utterly shuns publicity and declined the Fields Medal. [] Something other than prizes motivates Perelman.
        • The point about Perelman was to illustrate that breakthroughs can indeed come from a single person in math/TCS. I understanding not reading the article, but not reading even the comments?
          • Do you have a problem with irony? His point was perfectly lucid and I appreciated the reminder.
            • Something other than prizes motivates Perelman

              I never said the prize motivated Perelman. Thus the poster's comment was an implied rebuttal to my own. While his statement was ironic (as it claimed to be) -- and I have no problem with irony and even agree with his statement -- it was as a whole based on the premise that I had implied Perelman "did it for the prize".

          • The simple irony of Perelman's nature in light of the conversation does not invalidate your point about individual genius. I was pointing it out as an interesting tangent, not a rebuttal.
      • by shanen ( 462549 )
        Maybe I've missed it, but I cannot recall a single example of any winner of *ANY* Nobel Prize, not just the science categories, who ever claimed that winning a Nobel Prize was part of their motivation. In fact, I even believe that the committee would count it against any nominee who said so. Do you care to provide *ANY* example of your claim?

        I repeat. Real science is *NOT* a contest.
        • No, because you're asking for silly evidence, along the lines of "Can you prove that any politician has ever claimed to be in politics for the kickbacks (before being indicted)?" You're right about one thing though -- they'd be stupid to admit it to the Nobel committee. I'm also not saying that winning the prize motivates individuals to go for the prize 100%. What your original comment claimed is that the promise of the Prize (with capital P), or any prize or recognition for that matter, has absolutely no p
        • "I repeat. Real science is *NOT* a contest

          I disagree. Pharmaceutical companies, chemical companies, food companies, are all using science and scientific experiments in a contest to make their product better than their competitors. Even scientists that work at Universities are always competing against one another. They compete for funding, resources, and in different universities, to see who can find a solution first.
          • by shanen ( 462549 )
            Oh, so now you want to play word games with the definition of contest. And the moderators rate it as insightful? Right. Typical /.
      • The Nobel Prize includes a princely sum of money, actually.
    • "The Space Race" was most definitely a contest.
      • by shanen ( 462549 )
        So where was the prize? Or are you simply trying to reinforce my point? I shudder to suggest that you should read the actual article...
    • A prize is simply a way to leverage more effort from more people to solve your problem. Look at the Darpa Grand Challenge: winning-the-darpa-grand-challenge/ []
      They could have spent $2 million dollars funding each team, which is the way they'd approached funding in the past. Instead they spent $2 million for ALL the teams efforts, and it worked. What a spectacular bargain.

      Prizes are perfect if you have a specific goal that's almost achievable, but you
    • Science is full of contests (you already mention awards and prizes, for example). They get instant recognition at least in their field for being the first to discover an important idea or discovery. Contests are a way to demonstrate to the whole world that something is important rather than the few dozen people who have some interest directly in your work. $10 million for the first fully privately funded organization to put someone into space in a reusable vehicle. That's a big statement about the importanc

    • Especially in a field like computer science, prizes are very good because they give researchers motivation to work with the same data set as everybody else. It is much easier to compare the relative strengths and weaknesses of algorithms and approaches when people work towards the same goal.

      And there are other reasons for very *REAL* scientists to try to win prizes. Winning prizes gains prestige for their institution, and prestige for their institution helps provide the resources they need (students, g
  • Seems like the mentality that goes into working on such prize projects probably goes into open source projects.
    • The desire to expand your knowledge and skill.
    • A personal interest in the completion of the project at hand.
    • The need for recognition.
    • Something to put on your resume.

    Have corporations found a way to utilize this motivation in projects other than software? What role does the cash prize play in this if people are spending many times fold in attempting to win the spoils?

  • by hypermanng ( 155858 ) on Thursday January 25, 2007 @09:42PM (#17762082) Homepage
    The X Prise had more to do with stoking an incipient avenue of development than anything as narrow as looking for an immediate solution. It shows that whatever it is can be done, or done better. There's publicity for the contestants, yes, but also for the contest. In cases where a company puts up the money, I'm sure that the prime functions are to create buzz for its industry (as well as the company's place in it) and as a method to identify hireable talent.
  • Unfortunately, many if not most of the oldest and most successful research facilities are now mired in political and bureaucratic sludge. Research funding and even hiring too often is now driven by political motivations. I am glad that these prizes provide an opportunity and motivation to restore the joy (and hopefully progress) in research.
  • by Baldrson ( 78598 ) * on Thursday January 25, 2007 @10:33PM (#17762566) Homepage Journal
    Fusion energy prize legislation was drafted 15 years ago and submitted to Congress by one of the founders of the US Tokamak program, Robert W. Bussard []. There is good reason to believe this legislative proposal was a precursor to resurgence of interest in technology prize awards later in the 1990s.

    More recently, Dr. Bussard gave a talk at Google HQ about his currently favorite fusion technology and it has caused some commotion [].

    It's profoundly disturbing that the US is willing to spend a trillion dollars on war in the middle east getting negative results and not willing to devote even one tenth of one percent of that to fusion energy prize legislation that pays for positive results only.

  • Just a thought (Score:3, Interesting)

    by troll -1 ( 956834 ) on Thursday January 25, 2007 @11:14PM (#17763030)
    When I was in college I had a professor who doubted that prizes in science bring about any new inventions or discoveries that wouldn't have been made anyway. He argued that progress in science usually comes about through cooperation, not competition, and that the most significant advances in science were all made by people with little of no financial incentive (e.g. Newton, Einstein, Flemming, etc.)

    The article doesn't say whether the Ph.D. crystallographer who solved the pathology problem won a prize, but I wonder if a prize would have made a difference.
    • by mblase ( 200735 )
      When I was in college I had a professor who doubted that prizes in science bring about any new inventions or discoveries that wouldn't have been made anyway.

      Did you ask him if he'd have ever written his thesis if a degree hadn't been attached to its success?
    • Re: (Score:3, Insightful)

      by TubeSteak ( 669689 )

      He argued that progress in science usually comes about through cooperation, not competition
      Has your professor ever done research?

      Until it all gets published, researchers guard their data/results like a dragon guards its gold.

      There are very few fields that I'm aware of where that is not the normal behavior.

      As for Flemming, didn't he have a nice practice going on the side? Something about treating syphilis?
  • So where are the prizes in the fields of computer science/mathematics/computational sciences? [links] (goatse me if you'd like)
    Our grad students mustn't have the cash money to pay for their thesiseses.
  • After examining 166 problems posted by 26 research labs on the InnoCentive site over four years, Karim Lakhani, a Harvard Business School professor, found 240 people, on average, examined each problem, 10 offered answers and 29.5% of the problems were solved.
    Wikiproblema? Perhaps student's homework assignments could be done the same way.
  • From TFAS(ummary):

    Competitors for the $10 million prize for the space vehicle spent 10 times that amount trying to win it.

    Not even remotely. The word on the street is that SpaceShip One cost around $20 million - and Scaled Composites was the only entry that was fully funded. The remaining entries had essentially no funding.

    It's also worth pointing out that historically, technology prizes tend to be won by point solutions - rather than the general purpose solution desired. The City of S []

    • by Teancum ( 67324 )
      While Scaled Composites was certainly the only "fully funded entry", there were other contestants that may have likely succeeded had Burt Ruton not sent in his entry.

      Notably Armadillo Aerospace certainly has been showing some surprising results, as has the Romanian ARCA group. Both have gone off to other areas now that the X-Prize has been "won".

      I will admit though that many of the other 30 teams were there in name only, and it seems as though the entry fee they paid was only to help boost the overall succ
  • Two Things:

    One, it seems almost exploitative, to fund innovation this way.

    Two, it seems like a sizeable population of idle rich is necessary, to find a pool of investors sufficient to fund innovation this way.
    • by cbacba ( 944071 )
      To understand some of what the prize approach can do, one should read Dava Sobel's book, Longitude, which makes a fascinating and instructive look on the effort to achieve a prize of major value.

      One thing a prize does is provide an open invite to the nonestablished 'inventors' to participate. While it might bring out some kooks, it also can bring out some who are 'thinking out of the box'. The predisposition of the greatest minds of the time in the longitude prize case was to solve the problem by astronom
  • It worked for the DARPA Grand Challenge, but not in the way most people think.

    The prize was the carrot. But there was a stick, too. The Grand Challenge was a real threat to robotics funding at CMU and Stanford, which had been getting DARPA money for decades but were progressing very slowly. Originally, neither university's robotics group intended to enter. But there were apparently hints that if the non-university entries did significantly better than the people DARPA had been funding, the funding fo

    • That's very a interesting angle on the whole thing that helps explain some broader trends in the contest. I went to CMU, and even though I was excited about their entry, I always had nagging doubts about the general design of our entry. I was surprised there were so many automobile-based designs. Since there weren't any restrictions on the vehicle shape per, you'd think there would be designs with more stability than a four wheel vehicle. I mean, even though a Hummer is ridiculously stable when it comes
  • Prizes are only interesting if you're already working on it before the prize, and know you're gonna win already. For everyone else involved, it's just a PR stunt and a way to do really really cheap R&D.

    If you're smart enough to win one of these prizes, don't be a dumbass - go file the patents and sell them the solution for 100x more!

  • I haven't RTFA, or even TFAS, but this reminds me of why waste is important.

    For example, the article presumably says that prizes are good. The concentration of money into one person's (or one body's) bank account so that it could be spent on stuff like this, could be considered "waste" (particularly when it's spent on really stupid shit).

    Another example is how governments keep trying to reduce "inefficiencies" and programs that don't have proven results. The problem is, if you want to get one successful pro
  • Prizes aren't a panacea. They won't replace corporate R&D labs or universities.

    The targeting aspect of prizes is geared to the short term not the long term. The danger to the long term research is that prizes may achieve headline-making successes, and, as a result, clueless politicians and CEOs/CFOs may be inclined believe this is the best R&D funding model, because it allows them to parade short-term results in front of voters or share holders. This could lead to dumping or reducing funding to corporate R&D labs or universities, where what is currently 'blue sky' research

  • Here are the things I think we need a prize for. Each one is something that we scan get fairly quick advancements in, but appears just out of reach.

    Cheap Silicon production (for solar power)

    Better battery: 1. by weight and 2. by volume

    Better Voice recognition software

    Electronic voting machine with paper trail, prize awarded for the one hardest to break into.

Where it is a duty to worship the sun it is pretty sure to be a crime to examine the laws of heat. -- Christopher Morley