Using Prizes to Harness the Power of the Population

By: Michael Carlson
Estimated reading time: 5 minutes

The United States (US) Air Force proudly proclaims it has been “breaking barriers since 1947,” and yet the organization’s natural tendency is to stifle innovation. Certainly the Air Force has made great fanfare about promoting innovation within the force to counter this tendency, but the reality is 99.6% of potential innovative problem-solvers in the US are not in the military. It is in the nation’s interest to harness the power of all our people to help gain and maintain advantage in the increasingly complex geopolitical landscape. The question, therefore, is how the Air Force can effectively induce the American public to develop innovative solutions to military problems.

Patents and grants are most often cited and used as tools to incentivize innovation. However, patents tend to “substantively hinder subsequent scientific research and subsequent product development,” and tend to encourage speed of discovery over quality of innovation. Grants tend to be an effective complement to other tools for inducing private-sector innovation, but do not themselves induce innovation. Patents and grants, therefore, are inadequate or insufficient for inducing the private sector to generate innovative solutions for the Air Force. The missing tool is prize challenges.

Using Prizes to Harness the Power of the PopulationPrize challenges have been used since the 16th century to successfully spark innovation in order to solve national and international issues. They generated a way to calculate longitude at sea (British Longitude Prize, 1773), produced canning as a way to preserve food for armies (Napoleon’s Food Preservation Prize, 1810), helped spread air-mindedness in the early age of flight (Orteig Prize – Charles Lindbergh’s non-stop flight from New York to Paris, 1927), and opened the billion-dollar private spaceflight market (Ansari XPRIZE, 2004). Since 2010, the US government has “run nearly 1,000 challenges and offered well over $250 million in cash and prizes.” Roughly 85% of prize challenges generate winning solutions, and almost all air, space, and cyber prize challenges throughout history achieved outcomes the sponsor desired. The history of success stories makes it compelling to consider using them more often if and when they are an appropriate tool.

There are three enticing reasons for the Air Force to start using challenges: they encourage bold and innovative problem solving, increase the number and effectiveness of problem-solvers, and the economics are phenomenal. Challenges leave the design of solutions entirely to the imagination of competitors, which allows for more variation in approaches and increases innovation. The more uncertain the solution, the more certain it is that a prize challenge could be useful because challenges leave the problem solving exclusively to the entrants. Prize challenges can be designed to increase the number and effectiveness of problem solvers in three ways: incentivizing existing groups of experts to focus on an Air Force problem; strengthening a problem-solving community by increasing their problem-solving interactions; and mobilizing new problem-solvers to work on an Air Force problem (i.e. crowd-sourcing). Perhaps best of all, the Air Force’s return on investment for prize challenges is unprecedented. The Air Force only pays for winning solutions, and prize challenges often generate investments many times greater than the prize purse (Ansari XPRIZE: $100M private investment for $10M prize, Northrop Grumman Lunar Lander Challenge: $20M private investment for $2M prize).

Using Prizes to Harness the Power of the Population

Not only should the Air Force use prize challenges, the Air Force can start using them today. The Stevenson-Wydler Technology Innovation Act of 1980 and the America COMPETES Reauthorization Act of 2010 were enacted by Congress specifically to enable the federal government, including the Air Force, to sponsor private-sector innovation without having to touch the Federal Acquisition Regulation (FAR). The NDAAs from FY 2007 to present-day authorize the Air Force to run prize challenges. One-year, multi-year, and no-year funds can be used. The GSA provides comprehensive resources like case studies, best practices, tools to connect you with experts, etc., on their website, Challenge.gov, to design and administer prize challenges. Finally, the Air Force Research Lab has a partnership intermediary agreement with a non-profit organization to help organizations get started. Everything the Air Force needs to get started is already in place. It would be foolish for the Air Force not to start using prize challenges regularly to capitalize on the innovation potential of over 320 million Americans.

Right now, the Air Force should hone in on innovation activities that are internally-facing and ask if and how a complementary, externally-facing innovation activity should be pursued. What if a squadron used its innovation funds to sponsor a challenge where many different prototypes could be generated for the price of one? What if the Blue Horizons program sponsored a challenge to increase their innovation capacity from 16 people to many times that? What if the Air Force ran a challenge in parallel to the Vice Chief’s Challenge to get more ideas for improving multi-domain operations? The Air Force can and should start routinely wielding this tool to harness the innovative capacity of the American public for military problems.

Michael Carlson is a Cyber Warfare Officer currently serving as the Director of Operations for the 352d Cyber Operations Squadron. He is a graduate of the US Air Force Academy, the Advanced Study of Air Mobility (ASAM) program, and the School of Advanced Air and Space Studies (SAASS). Email: michael.m.carlson@gmail.com

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Department of the Air Force or the US Government.

OTH, multi-domain operations, emerging security environment

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