Prizes as a spur to innovation: a White House memo

A March 2010 White House memo "Guidance on the Use of Challenges and Prizes to Promote Open Government," promotes the use of prizes by agencies of the U.S. government.

"[I]t is Administration policy to strongly encourage agencies to:
• Utilize prizes and challenges as tools for advancing open government, innovation, and the agency’s mission;
• Identify and proactively address legal, regulatory, technical, and other barriers to the use of prizes and challenges;
• Select one or more individuals to identify and implement prizes and challenges, potentially in partnership with outside organizations, and to participate in a government-wide "community of practice" led by the Office of Management and Budget and the Office of Science and Technology Policy; and
• Increase their capacity to support, design, and manage prizes, potentially in collaboration with external partners.
To support agencies in the execution of prizes that further the policy objectives of the Federal Government, the Administration will make available a web-based platform for prizes and challenges within 120 days. This platform will provide a forum for agencies to post problems and invite communities of problem solvers to suggest, collaborate on, and deliver solutions. Over the longer term, the General Services Administration (GSA) will also provide government-wide services to share best practices and assist agencies in developing guidelines for issuing challenges. Additionally, GSA will develop, as expeditiously as possible, a contract vehicle to provide agency access to relevant products and services, including technical assistance in structuring and conducting contests to take maximum benefit of the marketplace as they identify and pursue contest initiatives to further the policy objectives of the Federal Government. "

See also a discussion of prizes in a McKinsey report called “And the winner is …” Capturing the promise of philanthropic prizes .