Using Prizes to Foster Innovation

Steve Lohr’s “Unboxed” column in today’s New York Times provides several examples of how prize competitions have spurred innovation–starting with Britain’s 1714 prize of 20,000 pounds (nearly $4.5 million today) to anyone who could figure out how to determine  a ship’s longitude (see the fascinating book Longitude for the full story).

If you like Lohr’s article and you’d like to learn more, I recommend The McKinsey Prize Report (I was interviewed for the report), published in 2010. It provides good advice about how and when prize competitions work and when they don’t, and a comprehensive list of recent prize competitions designed to foster innovation.