Under Ideas to Impact, we define an innovation prize as ‘a financial incentive that induces change through competition.’
Unlike funding mechanisms like grants, innovation prizes aim to stimulate or induce innovation by rewarding an idea, rather than its application.
Within Ideas to Impact, we run five different innovation prizes, each having been designed to tackle a specific development issue: energy access, climate change adaptation, and water, sanitation and hygiene.
Risks and rewards for prize applicants
To participate in a prize competition, applicants need to invest their money, with no guarantee that they will win at the end. Risks are particularly high for innovators from small or grassroots enterprises.
The amount of time that contestants need to commit must also be reasonable, to avoid putting too much pressure on them.
Meanwhile, the level of complexity of the goal must be carefully designed, so the risk to participants is mitigated if they are not financially rewarded at the end of the competition process.
On the rewards side, many innovators apply for prizes because of the sense of achievement of developing a solution, of what can be learnt in the process and the recognition that comes with winning.
Another incentive is the ‘buzz’ that prizes generate, which grants participants exposure and promotes their solution.
Finally, the financial reward, which is another strong incentive, should be high enough to compensate for the level of input that participants have invested.
Meanwhile, too high an amount of money risks attracting only the ‘big players’ and deterring local grassroots innovators, who often have the most relevant and creative solutions!
The importance of keeping the balance right
Prize designers need to carefully balance incentives and rewards with the complexity of the prize and the level of resources required by applicants, to avoid putting too heavy a strain on them.
There are multiple design options to mitigate the burden on prize participants, which are key to a well-designed prize programme, such as designing a multi-stage structure or ‘Stage-Gate’ where applicants can win smaller amounts of money at intermittent stages.
We’re halfway through running Ideas to Impact and we are now starting to see some results in the prizes and the effects of our inducement efforts – unusual suspects are applying with innovative solutions to the development problems we set out to shine a light on. However, we will only realise if we have achieved our end goal in March 2019, when the programme will be complete.
‘I do think we have improved people’s lives, even at a small scale so far’, notes Jonathan Slater, Prizes Lead. ‘But the next stages will see greater risk, so we’re encouraging solvers to engage with the prize teams and work within the communities to deliver sustainable outcomes.’
Keep following us to see how our innovation prizes unfold.
Along with advising on Ideas to Impact, Jonathan Slater advises and supports a number of large-scale innovation programmes and works to identify best working practices in the open innovation field. Having researched, designed and delivered of over 400 innovation programmes, using different types and design structures. Managing Director of The Blue Globe Consultants Ltd.