Challenge prizes, also called 'inducement' prizes, offer a reward to whoever can first, or most effectively, meet a defined challenge. They act as an incentive for meeting a specific challenge, rather than an award for past achievements.
Famous examples of challenge prizes include the Ansari X-Prize for manned private spaceflight, the 18th century Longitude Prize to help British navigators, or the 20th century Schneider Trophy for aviation, which inspired the Spitfire.
Offering cash prizes to incentivise breakthrough innovations is a time-honoured practice. Today, the practice of using prizes to stimulate innovation is back. As collaborative and open innovation grows in importance, and as web platforms enable crowdsourcing and collaboration on a massive scale, we are witnessing a revolution in the importance of challenge prizes for innovation. Experiments in spurring innovation with prizes are now taking place around the world, by governments, corporations and charities - tackling both technical and social challenges.
The Centre for Challenge Prizes brings together the growing expertise and interest in challenge prizes. This will help build an understanding of how challenge prizes can play an effective and strategic role in the stimulation and support of innovation.