Making the case for more contests

Government has barely scratched the surface of what it could achieve in R&D with more, better and bigger prize competitions, experts say.

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It might not be a novel notion that competition inspires innovation, but just in case anyone forgot, private-sector innovators showed up on Capitol Hill on April 9 to boost legislative efforts to increase the use of contests and prizes in federal research and development.

"Today, scientific prize challenges still play an important role in spurring innovation, and the federal government and private sector are crucial to sustaining these challenges," said Indiana Republican Rep. Larry Bucshon, chairman of the House Science, Space and Technology Committee's Research and Technology Subcommittee.

Bucshon is the author of legislation that would, among other things, direct the National Science Foundation to "place a high priority on designing and administering pilot programs for scientific breakthrough prizes."

Dr. Sharon Moe, president of the American Society of Nephrology, said innovation in kidney disease treatment "has been stymied by a lack of competition and a payment system that doesn't support novel therapies."

Competition could save lives, she said. "If Congress uses a prize competition to signal that it wants alternatives to currently available dialysis care, I believe the private sector will produce life-changing, cost-saving alternatives to dialysis," she said.

One of the best incentives would be allowing winners to retain intellectual property rights, said Christopher Frangione, vice president of prize development at the XPRIZE Foundation, which creates incentivized prize competitions.

"If you keep their [intellectual property], they're competing for a $10 million check," Frangione said. "They'd rather compete for the multibillion-dollar market that's there at the end of the day."

Although that approach might spark greater innovation, it would keep federally funded innovation out of the public domain. "I'm worried that the public won't appreciate that we're paying for somebody, giving them a prize, and then the taxpayer doesn't necessarily hold the rights to the intellectual property," said Rep. Thomas Massie (R-Ky.).

Prizes are not a panacea for all research ills, particularly when it comes to sensitive national security issues. But Narinder Singh, co-founder and chief strategy officer at IT services company Appirio, said that doesn't mean the quest for more competitions in the federal sphere wouldn't bear fruit.

"There are limitations, but I think we're not even close to approaching those yet," Singh said. "So there's a lot of opportunity to expand and try this in other places."

Singh is also president of TopCoder, which divides larger research and development projects into smaller jobs. The site crowdsources thousands of challenges annually and offers monetary prizes that range from hundreds to thousands of dollars.

"Breaking problems down allows for giant leaps forward to be encouraged inside of existing markets," Singh said.

By issuing more than 140 challenges in 11 months, TopCoder helped Minnesota modernize its system for screening Medicare and Medicaid providers for a cost savings that Harvard Business School researchers estimated at $6 million, about one-fifth what the government would have spent through traditional means.

"For us as a commercial organization, we don't focus on government as a sector," Singh said. "We look at the challenge [as] a way of saying, 'This is a more efficient mechanism of engaging with government.'"

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