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Selecting Prize Topics and Implementing Early Prize Contests

In this section we offer more detailed suggestions for processes and criteria that the National Science Foundation (NSF) may wish to use to identify and select prize topics and to design the contests to go with them.

PROCESSES FOR IDENTIFYING PRIZE TOPICS

Elsewhere in this report we discuss the importance of NSF’s reaching out to the larger scientific, technical, and other communities for ideas about suitable prize topics. We do so because we are convinced that conceiving of promising innovation inducement prizes is an exercise for which few people have experience. There are no experts on this today, in contrast to the large numbers of people who are experts on the identification of research opportunities, the design of financial incentives for private R&D spending, or the patent system. Topics that make good prize candidates may not be framed in the same terms as, say, R&D topics, and this suggests outreach well beyond the traditional sources of external advice for NSF and well beyond the capacity of an ad hoc committee formed for its familiarity with many fields in NSF’s broad portfolio rather than depth of expertise in any single field or a few fields.

Our committee was mindful too of its short life and limited meeting time and of the recent experience of other agencies’ prize programs. DARPA’s selection of autonomous vehicle technology followed a series of studies but was also guided by a congressional directive in the FY 2001 National Defense Authorization Act to have unmanned ground combat



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Innovation Inducement Prizes: At the National Science Foundation 3 Selecting Prize Topics and Implementing Early Prize Contests In this section we offer more detailed suggestions for processes and criteria that the National Science Foundation (NSF) may wish to use to identify and select prize topics and to design the contests to go with them. PROCESSES FOR IDENTIFYING PRIZE TOPICS Elsewhere in this report we discuss the importance of NSF’s reaching out to the larger scientific, technical, and other communities for ideas about suitable prize topics. We do so because we are convinced that conceiving of promising innovation inducement prizes is an exercise for which few people have experience. There are no experts on this today, in contrast to the large numbers of people who are experts on the identification of research opportunities, the design of financial incentives for private R&D spending, or the patent system. Topics that make good prize candidates may not be framed in the same terms as, say, R&D topics, and this suggests outreach well beyond the traditional sources of external advice for NSF and well beyond the capacity of an ad hoc committee formed for its familiarity with many fields in NSF’s broad portfolio rather than depth of expertise in any single field or a few fields. Our committee was mindful too of its short life and limited meeting time and of the recent experience of other agencies’ prize programs. DARPA’s selection of autonomous vehicle technology followed a series of studies but was also guided by a congressional directive in the FY 2001 National Defense Authorization Act to have unmanned ground combat

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Innovation Inducement Prizes: At the National Science Foundation vehicles constitute one-third of the Armed Forces’ fleet by 2015.1 NASA’s selection of topics for its Centennial Challenges followed an internal process of idea generation and a two-day Washington, D.C., workshop attended by over 200 representatives from aerospace and nonaerospace companies, universities, and other government agencies, divided into six brainstorming sessions. Approximately 30 promising ideas were then considered in detail in subsequent rules definition sessions.2 The committee decided to discuss a number of possible prize topic areas for NSF but not with an eye toward recommending them. Rather, we discussed them as means of exploring and better understanding how prize contests could be structured around them. Obviously, these discussions were not exhaustive. Here are a few of those topics, along with our thoughts on what could be done to transform them into goals that would drive innovation inducement prize contests. It should be noted that a number of plausible initial suggestions fell into the domains of defense, space, and medicine, but we considered these unlikely candidates for NSF, at least in the early stages of its program. Fast, sensitive, and cost-effective chemical sensors for pollutants. The goal of a contest in this area would be to stimulate development of an array of chemical sensing devices that could be used to monitor a range of indoor and outdoor environments for the presence of a large number of chemical substances as pollutants or as chemical weapons. Low cost and high reliability are hallmarks of what is hoped for. This suggests that the contest objective would be multidimensional, including necessary levels of sensitivity and specificity, lifetime in use, compatibility with integrated monitoring systems, responsiveness to a target set of chemical species, and some measure of the anticipated costs of manufacture, integration, and application of multisensor devices. Nano self-assembly. The promise of nanotechnology is predicated in part on achieving generalized methods of producing useful materials and devices at nanoscale by employing self-assembly methods in solid state, in solution, or perhaps in living systems. Many specific approaches to molecular self-assembly have been demonstrated in laboratory experiments in recent years. There is no generalized theory or algorithm that enables the material or device designer to depend on self-assembly methods with confidence, but such a generalized approach could be both feasible and valuable. 1 Defense Advanced Research Projects Agency. Grand Challenge 2004: Final Report. Arlington, Va.: July 30, 2004. 2 National Aeronautics and Space Administration. 2004 Centennial Challenges Workshop Report. Washington, D.C.: October 26, 2004.

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Innovation Inducement Prizes: At the National Science Foundation Green chemistry. In recent years industry, consumers, and environmentalists have all embraced the concept of green chemistry as a promising strategy for avoiding or substantially reducing the creation of risks to human health and the environment by choosing alternative chemicals or by redesigning processes to use or create lesser amounts of harmful environmental releases or waste. Because many of the most common organic chemicals are also used in myriad applications, a strategy of one-for-one substitution of less harmful for more harmful substances is not always feasible or successful. An inducement prize contest or contests could be organized around discovery of new products and processes to allow for substitution of one or more widely used, highly hazardous chemicals in commerce. Low-carbon energy technologies. Reducing greenhouse gases, and energy-related carbon dioxide emissions in particular, is a crucial national and international goal. Significant reductions in carbon dioxide require large-scale changes in the technologies used to produce energy, the products and processes that consume energy, and the means available to store energy. Substantial innovation in low-carbon energy supply technologies and in the efficiency of energy-using technologies holds promise for achieving such carbon reductions at significantly reduced cost. Given the widespread application of energy technologies and the broad reach of energy systems, there are many possibilities for employing innovation inducement prizes to overcome technical and scientific challenges in low-carbon energy supply, demand, and storage technologies, including biofuels, solar energy, advanced wind energy, fuel cells, advanced lighting, nuclear fission and fusion, hydrogen storage, and advanced batteries. At the same time, because energy production and utilization systems are complex systems with many interdependent parts, it will be a considerable challenge to design successful prizes that contribute to replacing significant amounts of the high-carbon energy currently used in industry, transportation, and residences. Catalysts for converting cellulosic biomass into liquid fuels. Recent advances in enzymatic catalysis have opened new possibilities for converting a wide variety of cellulosic biomaterials into useful liquid fuels. Further improvements in the performance and reduction in the cost of process that use catalysts is a top priority for the energy sectors in government and industry as a means for helping curb the use of fossil fuels. Current catalytic processes usually are not cost efficient for production of large quantities of liquid fuels. A prize could be given for discovery or development of one or more new catalysts that have the desirable technical properties, promise to be manufacturable at low cost, and enable production of high volumes of fuels. Experts in the field should be able to agree on the technical properties relatively directly. Additional study and

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Innovation Inducement Prizes: At the National Science Foundation analysis would be needed to develop a suitable surrogate measure for economic performance to serve as the contest objective. Advances in computing architecture and performance. Contemporary state-of-the-art digital computers (i.e., supercomputers) consume much more energy in computation than would be predicted by consideration of thermodynamic limits, which leads to compromises in design and performance including high prices, excessive heat generation, and low utilization of system capabilities. Prizes could be offered for specified improvements in computing performance on certain types of problems, including the possibility of using quantum computing approaches to address certain performance limits. Nevertheless, the specific objective and design of a prize would need to take into account both the current market-driven investment in many technical avenues and the technology insertion problem with any radical breakthrough. Learning technology/software for teaching science and mathematics at the K-12 levels. The nation faces a widely acknowledged crisis in preparing sufficient numbers of young people for careers and for citizenship roles that require an understanding of science and mathematics. There is reason to believe that learning technologies, including but not limited to software of many kinds, can contribute to more effective learning of these concepts at the K-12 levels. Innovations in such technologies could be encouraged through a prize that would reward the developers of such technologies that demonstrated a record of success in improving various measures of math and science learning in various educational settings, as compared with control groups taught by more established means. We have only scratched the surface of possible prize topics, and we most assuredly have not developed any of these into plans for contests to be set in the immediate future. We hope, however, that this brief discussion will assist the NSF in considering topics for its first round of prizes. In the early days of establishing an innovation inducement prize program, NSF needs to act fairly quickly to select, design, and announce a small number of first-round contests on somewhat limited specialized topics on which there may already be a strong consensus among technical and business leaders about the most important barriers to further development. We believe that these can be identified by canvassing specialists in a few fields, beginning with NSF’s own program managers and incorporating suggestions from scientific and technical societies, federal laboratories, industrial research managers and planners, and others familiar with the state of the art of relevant technologies and bodies of practice. Where systematic studies have been done to identify opportunities in important fields, they should be examined for potential prize topics. As did NASA, we believe it would be helpful for NSF to hold a public workshop to vet and refine a number of topics before NSF’s final selection. NSF offi-

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Innovation Inducement Prizes: At the National Science Foundation cials should consult NASA about the most effective and efficient organization of such a workshop. The selection process should proceed together with other tasks that need to be addressed at the outset, including Establishing and staffing the Office of Innovation Prizes (OIP) or its equivalent; Initiating work on the prize program administrative rules; Convening a formal advisory committee to the program; Drafting a prize program announcement, including registration procedures and forms; and Appointing working groups of NSF staff, augmented by contractors or consultants, as needed, to develop each of the three to five prize contest statements, including the contest-specific rules described above. We believe that it is a reasonable objective to announce the first round of contests in the latter part of 2007. For more ambitious prizes more time and resources will be needed to identify prize topics. The challenge is to identify goals that are significant for society, scientifically and technically challenging, and achievable in a reasonable period of time through sustained intellectual and creative effort. While it is straightforward to identify broad areas of great societal need, it is another matter altogether, the limited experience shows, to extract from those statements of need a coherently designed prize goal and related contest objectives. A comprehensive systems approach to this challenge could be helpful. The purpose of such an analysis would be to identify and describe the principal elements and connections of a complex system, such as a nuclear power production facility, a hospital, a major city educational system, or a quantum computer, for the purpose of locating the critical innovations needed to enable major improvements in such systems. These innovation goals would then become candidates for large-scale innovation inducement prize contests. This sort of analysis could be carried out by NSF staff, by expert panels convened by NSF or a contractor, or by experts in strategic planning and analysis. They should be published and circulated for comment to diverse constituencies with an interest in the general topic for information and validation. This work will be in anticipation of announcing one or major prize contests in the latter part of 2008.

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Innovation Inducement Prizes: At the National Science Foundation CRITERIA FOR SELECTION OF PRIZE TOPICS Here we summarize under several categories the large number of criteria that could be employed to decide which set of candidate topics should be the focus of an NSF inducement prize program. Criteria Related to Government Encouragement of Innovation As for any other mode of government support of or incentives for innovation, inducement prizes should be offered in cases that comport with common understanding of the rationales for government involvement in the innovation process, namely, that the development and application of the hoped-for innovation meets the following criteria: The contest goal is widely judged to be worth pursuing and is in fact among the most important challenges facing the nation. If a prizewinning innovation is developed and put into practice, it will offer substantial practical benefit not only to its producers and users but also to the nation as a whole. Pursuit of the innovation should be perceived as a high-risk but high-reward activity. Without government intervention the market is unlikely to produce the innovation in a timely or effective manner, that is, the usual arguments from market failure for an affirmative federal involvement in the innovation process should apply to prize programs just as they do to other programs and policies intended to encourage innovation. Criteria Related to the Use of the Inducement Prize Mechanism The committee believes that offering inducement prizes is more relevant for pursuing some national goals than for others. To be appropriate as the target of an inducement prize, either in place of a grant program or as a supplement to it, the contest should have most of the following characteristics: The prize goal should represent an ambitious effort, well beyond the current state of the art. It is expected that the contest objective can be achieved within a reasonable time frame for a prize program; on the order of 2 to 10 years. It will be possible to determine in a relatively objective manner whether a particular contestant’s innovation has in fact achieved the contest objective.

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Innovation Inducement Prizes: At the National Science Foundation It will be feasible to define a plausible contest objective that is a suitable surrogate for the test of innovative success that is usually applied in the marketplace. The contest will encourage a wide range of types of contestants, including those not ordinarily active in the research grant and contract world, to participate. The goal is unlikely to be achieved, at least not in a reasonable time, using traditional grant and contract modes of encouragement alone. Criteria Related to Broad Outreach and Engagement It is widely agreed that inducement prizes are especially useful in seeking to broaden the range and scope of entities that compete for federal support of innovation. This suggests additional criteria for selection of candidate topics around which to structure prize offerings: The goal should be reasonably meaningful to the general public and understandable by a wide range of potential contestants. The methods and tools required to compete effectively should be available to a reasonably large number and wide range of potential contestants. The process of competing for the prize should encourage formation of new social networks among individuals, firms, government laboratories, financial institutions, and others, who can contribute to future innovative activities. Criteria Related to Political and Social Constraints A variety of political and societal constraints should be considered in selecting prize topics, including: Achieving contest objectives should not require use of classified information or technologies nor should it result in inadvertent creation of same. Pursuing the prize should not pose unreasonably large risks to contestants, NSF, or the larger society. Criteria Related to NSF’s Involvement The prize goals and associated objectives should draw on the technological and scientific strengths of the NSF, its staff, and its advisory apparatus.

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Innovation Inducement Prizes: At the National Science Foundation Early prize topics should be selected with an eye toward their likely contribution to building NSF’s capabilities for mounting longer prize contests. When a contest is being considered that would help fulfill the missions of other federal agencies, those agencies should be invited to participate in administering and funding the prize contest. Contests should encourage entry by experts and practitioners in a variety of disciplines and fields. CONCLUSION The challenge to establish a program of innovation inducement prizes presents the NSF with an unusual opportunity to try a number of different approaches and designs for prizes, both to pursue the broad objective of stimulating innovation throughout a wide range of U.S. institutions and to develop a database of experience with such prizes that can inform policy makers and agency officials about their uses and limitations. The committee believes that an ambitious, albeit in its early stages experimental, program of innovation inducement prize contests, carried out in close association with the academic community, scientific and technical societies, industry organizations, venture capitalists, and others, will prove to be a sound investment in strengthening the infrastructure for innovation in the United States.

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