Federal government sees the light on competitions

Illumination

Annie Lowry’s article last Sunday in The Washington Post, “Can cash prizes for innovation get the economy rolling again?“, is a terrific examination of the U.S. government’s increasing use of prize money in its efforts to enlist the private sector in finding solutions to specific R&D challenges. The impetus for her piece was the recent reauthorization of the America Competes Act, which provides the legal framework for these efforts.

The “inducement prizes” described by Lowry are distinguished from the Nobel, MacArthur and other “recognition prizes”. Anyone can view Uncle Sam’s contests at Challenge.gov. (Check out the vitual Easter egg hunt — we’re not so sure about that one.)

The most fascinating part of Lowry’s piece is her brief history of the use of prizes by various governments and an explanation of when they work best. The fact that many of these contests have worked exceptionally well–perhaps an obvious result to many–suggests that we can expect to see substantial growth in the number of such contests in the future.

Photo credit: pyth0ns

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Joe Hurley is a CPA, author of "The Best Way to Save for College - A Complete Guide to 529 Plans", founder of Savingforcollege.com, and co-founder of Bizplancompetitions.com. He has also recently started making maple syrup.
View all posts by joeh → This entry was posted in Featured Posts and tagged . Bookmark the permalink.

One Response to Federal government sees the light on competitions

  1. Ty Danco says:

    I have no argument with Ms. Lowry’s finding that offering cash prizes is effective in contests for a specific aim, such as creating a chronometer. But while cash prizes are splashy and attention-grabbing, I think that focusing on the cash portion misses the mark for most readers of this website. The value of “startup” competitions (if you talk to VCs or angel investors, you’ll find out that traditional “business plans” are considered irrelevant to funding) is almost all in the benefits that can equally be gained by all participants, regardless of outcome: networking, advice from mentors, and a sense of urgency that arises from the timelines of a competition. It also quickly becomes apparent that those companies who take advantage of the non-cash elements of a competition are going to be the ones with the best chance of long-term success.

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