CEOs for Cities has just launched the latest in a long line of serious cash prizes to encourage and reward innovation. The X Prize famously created a new space race with its $10 million prize for a new space-bound craft. More recently, ArtPrize has offered big-money incentives for artists to aggregate and innovate in downtown Grand Rapids, Michigan, once a year. And even the commercial world isn’t immune from the approach: The Netflix Prize in 2009 offered $1 million to any individual or group who could significantly improve the company’s movie recommendation algorithm.
Now CEOs for Cities, alongside The Kresge Foundation and Lumina Foundation for Education, is offering a $1 million prize for the city that proves most effective at increasing the number of post secondary degrees granted per capita in the next four years.
Why is a big-money prize becoming such a popular approach to innovation and change? First, it gets attention…the promise of large wads of cash has a way of drawing the focus of individuals, institutions, and the media. Second, it encourages risk-taking among many, even if only one will win. Third, it allows the award-giver to speak their piece and set the rules of the game.
In this case, CEOs for Cities and its funding partners get to underscore the importance of ‘talent’ in successful cities. And they get to define what talent is, how it’s grown, and how it’s measured — at least for the purposes of the prize. Along the way, the hope is that lots of cities will dive into the challenge, and shift their focus from other pursuits toward this pursuit on the promise of a huge payout in funding and national attention.
The challenge of a prize, of course, comes from the same power as its potential success. In drawing focus, a financial prize can shift strategy — cities that might be more successful in moving other metrics by other means might abandon those plans in favor of the prize. And further, individuals and groups are notoriously bad at matching the probability of future income against the accumulation of current and future costs (just ask a gambler), leading them down the road to instability.
These and other potential downsides should lead any prize developer to think clearly and move carefully. It might also be worth reviewing the Hippocratic Oath, and brushing up on systems thinking. First, do no harm.
It will be worth watching which cities jump into the prize race, and what innovations or successful practices they discover along the way. Here’s hoping that all of their choices are healthy ones.
Offering prizes, like logo competitions, is incredibly inexpensive for the ROI. If one adds up all the hours and ideas you are looking at brilliance for less than minimum wage.