Inducing Innovation with Prizes

September 25th, 2009 by Ran Libeskind-Hadas Post a comment »

The awarding of the $1 million Netflix Prize this week reopens an interesting bigger question:  Are prizes a viable mechanism for encouraging research in the computing fields?  From Netflix’s perspective, the answer is almost certainly yes.  Netflix CEO Reed Hastings is quoted telling the New York Times (probably tongue-in-cheek) “You’re getting Ph.D.’s for a dollar an hour.”

Could prizes be useful to the broader computing community in advancing research?  The Clay Mathematics Institute established the Millenium Prizes in 2000, offering $1 million for the solutions to each of seven famous open problems, including the question of whether P=NP.  It’s hard to imagine that many researchers have decided to shape their research agendas based on the existence of this prize.  On the other hand, Wolfram Research sponsored a $25,000 prize, with a blue ribbon prize committee, to determine if a specific small (2 states and 3 symbols) Turing Machine is universal. The problem was solved (in the affirmative) in 2007 by a 20-year-old from Birmingham, England.

There is a rich history of prizes for technical innovation.  In the early 18th century, the British Parliament offered the Longitude Prize for a practical method of precisely determining a ship’s longitude, with different monetary amounts depending on the accuracy of the instrument.  The rules were changed during the course of the competition and the prize was never awarded.

More recently, there have been numerous technical prizes such as the $10 million Ansari X PRIZE for carrying three people to 100 kilometers above the earth’s surface.  Following on the success of the Ansari Prize, The X PRIZE Foundation has established several other major prizes for specific achievements that have “the potential to benefit humanity”.

Are there some major problems in computer science that could be incentivized by prizes – financial or otherwise?  What are the potential benefits and risks of this approach?  We’re eager to hear your thoughts.

Some good additional readings include the following:

  • http://twitter.com/sheiladenn sheiladenn

    I think these prizes are an interesting idea, but I think all parties need to be very clear on ownership of the intellectual property.

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