Government Considers Prizes To Boost Innovation

The UK government is looking at using competitions and prizes as a way to inspire technological innovation, as part of a review of innovation policy, it was announced today.

“If we can get it right, there really are significant benefits of prizes,” said David Willetts, minister of state for universities and science, speaking at the Prize Summit in London, an event designed to promote the idea of prizes as a key part of innovation policy.

Prizes could join the StartUp Britain entrepreneur site, in the ways the government encourages entrepreneurs, partly driven by the idea that prizes could be a lot cheaper than providing long-term funding for innovation.

Can prizes create real investment?

“As the Minister responsible for innovation I recognise that prizes are one of the many tools that governments can use to promote innovation,” Willetts told the summit. “We are undertaking across government  a review of innovation policies and our plan is to publish a new innovation strategy later this year that will set out how we see the government’s role in innovation.”

The summit was organised by OmniCompete, a specialist company that was set up to run the Global Security Challenge – and has since been involved in the UK’s Cyber Security Challenge.

Conceding that a competition with a one-off prize is cheaper than long-term support for innovation, Simon Schneider, chief executive of OmniCompete, argued that a prize can nevertheless help bring more money into an innovator, by identifying where support is needed.

“With less money you can change the world,” he  said. “Competitions can’t replace venture capital – but they could help focus VC money so it is not wasted.”

Government called on to support innovation

Schneider also announced a YouGov survey of small-to-medium businesses in Britain, which found that a majority (89 percent)  believe the government is not doing enough to stimulate innovation – and that 70 percent of SMB chiefs believe that focusing on a specific challenge and rewarding excellence are the most important drivers of innovation.

Almost a third of SMBs (29 percent) haven’t invested in a new product, process or marketing method to improve their business in the last twelve months, the survey found, demonstrating that “businesses are still struggling to survive, rather than developing or growing”.

The summit brought together people with experience of innovation prizes, from different countries including the US.