Prizes,Publicity and Problems

In the article Prizes With an Eye Toward the Future Tina Rosenberg glosses over one of her most interesting points.

"More important, prizes work where other methods do not. A lot of problems aren’t new — someone has already solved them or has solved something similar. By casting a very wide net, prizes find these people."

It is hard for newcomers to gain legitimacy when trying to enter the market place. Not only do governments and organizations draw out these solutions with their prize money, but they also give the winner a platform to reach their potential buyers.

Frank WiIlzchek described the effect of winning the Nobel Prize in 2004 to the Boston Globe saying his life "changed a lot! There was a whirlwind of publicity, both for myself and for my work, a great weeklong party in Sweden. And then life continued on a higher plane of self-confidence and self-esteem. Many opportunities opened up."

Prizes can give instant legitimacy to any person or idea, so long as the awarder is credible. In the case of most Nobel Laureates their legitimacy is already a given. By recognizing Social Innovations in this manner, Governments can give an influx of cash to Entrepreneurs not just by the money they award, but by the investors and potential customers they will draw.

I would also argue that while there are obvious benefits of prizes, the main motivator for most individuals will not be the cash, but rather the recognition and the autonomy it creates. Many companies today are moving away from the industrial model and allowing their employees time to create what they want. Prizes are like an international take on Google's famous 20% time model. Offering prizes is essentially providing the small incentive many innovators might need to flesh out that idea they had

The biggest roadblock to the American Government offering prizes is precisely because it is uncertain who the winner will be and where they will come from. Prizes are also more democratic, with no focus on lobbying for additional funds, entrepreneurs and innovators are forced to deliver a product. Unfortunately the way much of government funding is doled out is by Representatives and Senators looking to enable a specific industry or company in their region. It is unlikely to see Congress turn from a method of funding research and development that earns them so much good will among their constituents. Therefore it will be up to government agencies to use their discretionary spending to fund these prizes, much like the example of NASA in the article. This is a hard pill to swallow, offering up the rewards necessary would most likely require many of these agencies to make significant cut backs in the short term, with no actual guarantee of the prize being claimed for many weeks, months or even years.