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 Challenge.gov 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.
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