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Washington Catches Prize Fever

trophyWashington is catching prize fever. Back in September, the federal government created, a platform for federal agencies to run Netflix Prize-style competitions. And yesterday Congress passed the America COMPETES Act, which codified the running of prizes by federal agencies.

According to the new law, any agency head may now run competitions "to stimulate innovation that has the potential to advance the mission of the respective agency." The competitions aren’t only limited to "point solution" prizes—like the Netflix Prize or the X Prize, both of which seek very specific outcomes. They can also be "exposition prizes," the Act says, which help "identify and promote" ideas that otherwise might not get a lot of attention and that will help accelerate the ideas by businesses or other institutions.

The purpose of the prizes is to "to spur innovation, solve tough problems, and advance [the federal agency's] core missions," according to the White House's Open Government Initiative. The act doesn’t set a maximum amount for any prize, though it does say that any prizes over $1 million must be approved by the agency head.

But don’t expect most competitions run by the federal government to be that rich. The majority of the 57 competitions already up on run more in the range of a few thousand dollars, if they even offer a reward at all.

The new law is the latest sign that Washington is embracing the type of open innovation that businesses and philanthropies, like the Progressive Automotive X Prize (which sought production-ready cars that got 100 mg), have been pursuing for a decade. The official shift toward this mindset started in September 2009 when President Obama announced his "Strategy for American Innovation."

"In a world of widely dispersed knowledge, prizes and challenges are an essential tool for every agency’s toolkit," wrote Tom Kalil (Deputy Director for Policy in the White House Office of Science and Technology Policy) and Robyn Sturm (Kalil’s Advisor for Open Innovation) on the White House’s Open Government Initiative blog.

[Image: Flickr user Shorts and Longs | The Both And]

Follow E.B. Boyd on Twitter.

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  • truman semans

    It is encouraging to see the government develop a strategic approach to leverage the power of prizes. As my colleague and I wrote on this topic in GreenBiz (, prizes can be an invaluable tool to amplify participants’ investment many-fold beyond the prize purse, and to bring together the unique perspectives from disparate fields that are often needed to tackle the complex problems prizes aim to solve.

    But as we have also noted (, prizes must be used carefully because they are not a cure-all. In instances where the cost to scale far outweighs the prize award, or where there is significant policy uncertainty (both of which apply to climate change), prizes may not be the ideal tool.