Want a solution? Try offering a prize

The $10 million Ansari X Prize proved that to be true five years ago, when its winners launched a private manned vehicle into space. The prize spawned a resurgence of high-profile competitions, with private foundations and companies putting up hundreds of millions of dollars to solve technological challenges as urgent as building more efficient cars, and as trivial as predicting what movies people would like.

Recently, prize fever has also breached the thick walls of government bureaucracy, and more federal agencies are using competitions as a strategy to spur innovation. The competitions leverage modest amounts of taxpayer money to attract inventors and investors to certain scientific and technological problems.

“Prizes work very well because they are not just about money; they are about recognition,’’ said Calestous Juma, a professor at the Kennedy School of Government at Harvard University. “They work best in areas where you have a large degree of uncertainty and limited knowledge of who is doing what. The prize becomes like a signaling mechanism and people start to devote their talents and energy to solving the problem.’’

The Department of Defense and its research arm, DARPA, have used cash prizes to accelerate the design of military robots and lightweight batteries that soldiers can carry during combat. NASA’s Centennial Challenges program has awarded more than $2 million since 2006 to teams that designed rocket-powered moon landers, durable gloves for astronauts, and space-faring robots. Now, the agency is asking the public for ideas for future prize competitions. The Department of Energy is offering the L Prize to the inventor of an energy-efficient alternative to the 60-watt light bulb, and in August, it announced the H Prize, to be awarded for advances in hydrogen fuel cell materials for cars.

Thomas Kalil, deputy director of the White House Office of Science and Technology Policy, is a vocal advocate for such prizes. “It’s still at the experimentation phase, but agencies are starting to use them more,’’ he said in a telephone interview. “We’re certainly underutilizing them today.’’

High-profile competitions, accompanied by substantial cash prizes, Kalil added, can inspire more ideas and give recognition to obscure inventors. They can also draw private research dollars to problems that do not have immediate payoffs in the marketplace.

Prizes often exploit the willingness of competitors to put large amounts of work into testing a technology. Last month, a team led by Worcester Polytechnic Institute student Paul Ventimiglia won $500,000 in a NASA competition to build a lightweight robot that could quickly excavate and transport the rocks and dust found on the surface of the moon. Aspects of the robot could be used to clear landing areas for future missions.

Although the robot’s components were relatively inexpensive, Ventimiglia, the 22-year-old founder of Paul’s Robotics, said he starved himself of sleep for months and his team spent thousands of hours fine-tuning the robot’s wheels, sensors, and programming.

“Through traditional contracting methods, it would have cost many times the prize money that was available’’ to develop the 20 prototypes that qualified for the robot excavation competition, said Douglas Comstock, director of NASA’s Innovative Partnerships Program. For the current round of the agency’s Lunar Lander challenge, Comstock said that teams have invested about $8 million to compete for $2 million in prize money for rocket-powered rovers that can traverse the moon’s surface.

“We’re not paying for ideas; we’re only making awards when an idea has been translated into practical reality,’’ said Andy Petro, manager of the NASA prize program. “The taxpayer is getting the benefit of the trial-and-error process to see which ideas really work without having to pay for that process.’’

Indeed, most innovation prizes reward technologies that take time and money to develop, rather than ideas. David Kaiser, a professor in MIT’s program in science, technology, and society, said this is a shortcoming of the competitions, because they reward groups and companies that are already in a particular field and have access to deep-pocketed investors.

“If there is some important and unmet challenge, it suggests we need a broader and more far-flung set of ideas,’’ Kaiser said. “If the idea base has been blindered, we aren’t going to solve that by thinking the same way and putting cash at the end.’’

To inspire innovation, he thinks government agencies should award cash prizes that support unique and “oddball’’ ideas, to encourage the “kid with the dream in her garage who doesn’t have a venture capitalist knocking on her door.’’

The idea of using prizes to encourage innovation goes back centuries. In 1714, the British Parliament sponsored a cash prize competition for measuring longitude at sea that spurred the design of the marine chronometer. Napoleon offered a prize for the design of a better system to preserve food for his armies as they crossed the barren Russian landscape; the winner came up with food canning. In the 20th century, privately sponsored prizes inspired many great aviation feats, including Charles Lindbergh’s 1927 nonstop solo flight across the Atlantic.

The X Prize Foundation has fostered a renaissance in prize competitions over the past decade. Since 2000, companies, foundations, and governments have introduced more than 60 cash prizes of over $100,000 each, according to a recent McKinsey analysis. About 17 percent of the $250 million in new prize money has come from governments.

Several politicians have proposed more prizes. Senator Olympia Snowe, a Maine Republican, co-sponsored a bill now in committee to offer cash prizes for innovations in nanotechnology. Senator Bernie Sanders of Vermont is pushing for a government-sponsored prize to encourage medical breakthroughs in areas that do not typically attract enough private industry investment, such as the development of a malaria vaccine. On a White House blog, Kalil is soliciting suggestions from citizens for competitions that the administration should support.

Prizes do not work for all types of problems, and competitions have on occasion failed to yield anyone who could meet their challenges. Even their fiercest advocates agree that they are only one tool among many and cannot replace subsidies or grants for basic research.

Juma, at Harvard, however, says that prizes supported by federal agencies also serve a broader purpose. “The government has a reputation of favoring certain institutions and individuals because they awarded them contracts before,’’ he said. “When the government gives prizes, it sends the signal that they are open-minded about conducting business. It’s a very transparent and honest way of doing business.’’

Bina Venkataraman can be reached at bina@globe.com.