The Prize Research Website
Welcome!
This website describes and presents the findings of a research program on innovation inducement prizes. This program started with the doctoral dissertation project "How do prizes induce innovation? Learning from the Google Lunar X-Prize." by Luciano Kay, which investigated inducement prizes and their effects on technological innovation.
Contents:
Publications and other outputs
Projects
The main project in this research program has been Luciano Kay's doctoral dissertation, which investigated technology prizes and contributed new insights about the means by which prizes induce innovation. Specifically, the project studied three prize competitions in the aerospace technology sector:
- the Ansari X-Prize, which offered a reward for the first non-government organization to launch a reusable manned spacecraft into space twice within two weeks;
- the Northrop Grumman Lunar Lander Challenge, aimed at building and flying a rocket-powered vehicle that simulates the flight of a vehicle on the Moon; and,
- the ongoing $30 million Google Lunar X-Prize (GLXP), which requires participants to land a robot on the surface of the Moon, among other secondary goals, by December 2015.
This project investigated three main aspects of those prizes: (1) how prize entrants respond to prize incentives, (2) how they organize R&D activities, and (3) how technology advancement takes place in the context of prize competitions. This project did not look at engineering aspects of technology development or competitive positions of the prize entrants, yet provided insights related with the organization of R&D activities and the overall strategies of teams (without disclosing sensitive data). Neither this research project nor any of its researchers are affiliated with any prize team or sponsor.
This research program has also produced the report "Managing Innovation Prizes in Government" with support from The IBM Center for the Business of Government. This report offers practical insights and recommendations for the design, implementation, and evaluation of innovation prizes sponsored or organized by government agencies for technology development or achievement of other mission-related goals. The report draws primarily on findings from the aforementioned project and from further investigation of the Grand and Urban Challenges of the Defense Advanced Research Projects Agency (DARPA). The DARPA Challenges are three competitions organized in 2004, 2005, and 2007 to develop autonomous ground robotic vehicles. The report also includes insights from the broader prize literature and discusses how different aspects of prize design may lead to more effective and efficient prizebased public programs.
Methodology
The project "How do prizes induce innovation? Learning from aerospace prize competitions" combined a two-stage, iterative research design and multiple data sources to be able to investigate a topic that has been barely addressed by the academic literature.
The first stage of the project tested a model of innovation inducement prizes based on patterns that link prize incentives with entrant characteristics, R&D organization, and technological outcomes. This model has been tested and revised by studying the two first aerospace prizes as pilot cases: the Ansari X-Prize and the Lunar Lander Challenge of NASA. This first stage drew primarily on secondary data and experts' opinion.
The second stage of the project applied the revised model to the ongoing Google Lunar X-Prize and prize entrants. This case study drew on data from questionnaires applied to prize teams, interviews with team members and prize experts, and site visits to teams' workplaces. Beyond the scientific and technical relevance of the challenge posed by the GLXP, this ongoing prize had exceptional significance for this research due to its real-time data access and possibility to explore real-time perceptions of prize entrants in a competitive context characterized by technological uncertainty. This project pursued this opportunity for data gathering using an approach that combined questionnaires, interviews, and direct observation.
Relevance of this research
Policy-makers and scholars are increasingly looking at innovation inducement prizes as a means to pursue scientific, technological, and broader societal goals. In the US, NASA, DoD, and other agencies have already used prizes to advance technologies related to their missions. Moreover, in the current economic crisis, prizes have received additional attention since they put forward potential advantages to stimulate the economy through innovation. Yet, little academic research has addressed this topic to understand the potential of prizes to achieve these goals.
This research program contributes to enhancing our understanding of the relationship between prize incentives, R&D organization, and technology advancement to inform the design of more efficient policies and public and private prize sponsorships aimed at increasing competitiveness, creating new businesses and jobs, or advancing critical technologies.
About the researcher
Luciano Kay holds a Ph.D. in Public Policy from the Georgia Institute of Technology. The main project in this research program is Kay's doctoral dissertation project. The Chair of the Committee that supervised such dissertation is Professor Philip Shapira (Georgia Institute of Technology and Manchester University, UK). Kay is affiliated with The Georgia Tech Program in Science, Technology and Innovation Policy (STIP). You may wish to visit Luciano Kay's personal website for more information on the researcher.
Sponsors
This research on innovation prizes has been supported in part by the US National Science Foundation under Grant Number SBE-0965103. Any opinions, findings and conclusions or recommendations expressed in this website are those of the author and do not necessarily reflect the views of the National Science Foundation.
Additional support for Luciano Kay's research on innovation prizes has been provided by The IBM Center for the Business of Government to produce the report "Managing Innovation Prizes in Government".
More information
For more information please contact Luciano Kay by e-mail using luciano.kay at gatech.edu
Prize Research NewsNew journal publication: The effect of inducement prizes on innovation: evidence from the Ansari X Prize and the Northrop Grumman Lunar Lander Challenge (R&D Management) - Browse publications page. |
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Featured PublicationsThe effect of inducement prizes on innovation: evidence from the Ansari X Prize and the Northrop Grumman Lunar Lander Challenge (R&D Management) Abstract: Inducement prizes are increasingly popular because of their potential to induce technological innovations and attain related goals. Academic research, however, has barely investigated these prizes. This paper investigates the motivation of prize entrants, the characteristics of their research and development (R&D) activities, and the overall effect of prizes on innovation using case study research and documentary data sources. The Ansari X Prize and the Northrop Grumman Lunar Lander Challenge, both considered successful technology competitions in the aerospace sector, are investigated. The findings show that, first, incentives created by competitions, particularly those that are nonmonetary, attract unconventional entrants. The market value of the prize technologies motivate entrants as well but do not attract traditional industry players. Second, limited technology development lead times and no up-front funding characterize prize R&D activities, yet their differences with traditional industry practices are caused by participant-level factors. Most importantly, the introduction of novel R&D approaches is associated with the participation of unconventional entrants. Third, these prizes induced innovations over and above what would have occurred anyway, with the caveat that they were linked to significant technology incentives and fundamentally, ongoing R&D processes. These findings put forward lessons that inform the design of more effective prize competitions. Link to full article (requires journal access): http://dx.doi.org/10.1111/j.1467-9310.2011.00653.x Citation: Kay, Luciano (2011). “The effect of inducement prizes on innovation: evidence from the Ansari X Prize and the Northrop Grumman Lunar Lander Challenge.” R&D Management, 41, 4, 360-377.
Managing Innovation Prizes in Government 
The use of prizes and awards is a visible element of the Obama Administration’s efforts to promote innovation in government. For example, the Office of Management and Budget (OMB) has sponsored a competition among federal employees to find cost savings and the White House has created the “challenge.gov” website where federal agencies can pose problems in hopes of getting solutions from the public. OMB issued guidance to encourage agencies to offer challenges and prizes, as well. The use of prizes gained a legislative boost in December 2010 when Congress included a prizes component in legislation designed to increase American innovation and competition. This new legislation expands the authorization to use prizes to every agency head, and creates a framework and eases existing administrative constraints for conducting a prize competition for those outside government. In this report, author Luciano Kay surveys the literature and offers several case studies of recent prizes awarded for technology innovations: the Ansari X Prize for re-usable space craft, the Northup Grumman Lunar Lander Challenge, and a Defense Department prize for autonomous road vehicles. |