Will a multi-million dollar prize find a cure, preserve our environment, or get us to Mars (the other Mars)?
McKinsey & Company’s recently published report “Using prizes to spur innovation” (McKinsey Quarterly – July 2009) focuses on the increased use of philanthropic dollars to fund prizes that solve problems, in some cases some very large problems.
According to the McKinsey report “prize philanthropy” is burgeoning and the role of prizes is changing:
McKinsey lists six model prize structures: Exemplar, Exposition, Network, Participation, Market Stimulation, and Point Solution. The report cites examples ranging from the Nobel Prizes (Exemplar) that reward excellence and influence thinking in specific areas to an online T-shirt store (Point Solution) that holds weekly competitions for the best shirt design.
They stress that for prizes to be effective three conditions are essential:
Or as Peter Diamandis, Founder of the X Prize Foundation succinctly notes “There is an art and science to designing a prize.”
A recent article in the Wall Street Journal – The Science Prize: Innovation or Stealth Advertising? by Robert Lee Hotz shares opinions from individuals who “dismiss the newest trend in prize-giving as a form of advertising that masquerades as public service – a clever ploy to attract top research talent at a discount”. James F. English a University of Pennsylvania scholar and author of “The Economy of Prestige: Prizes, Awards and The Circulation of Cultural Value” says “I hate these inducement prizes and their language of social benefit. It’s a cover for what they are really about, which is getting attention. I don’t think that kind of small-scale frantic prize-chasing investment is the best way for us to solve big problems”.
Are prizes a powerful agent of change or a quest for recognition of a few individuals?