Can prizes enact genuine social change?

By Ville Takala (IIPP), Kalle Nieminen (Sitra), Tuukka Toivonen (STEaPP) and Riina Pulkkinen (Sitra)

Image credit: Sitra

Modern societal challenges, from climate change to improving public health and tackling loneliness, have forced governments across the world to review their relationship with innovation. After a period of hegemonic frameworks derived from neoclassical economics that focused on limiting the role of the state, a new consensus has started to emerge: states must actively seek to steer the direction of the economy towards socially and environmentally sustainable outcomes via investment.

This can be achieved, says Director of the Institute for Innovation and Public Purpose (IIPP) Mariana Mazzucato, by setting clearly stated missions that galvanise production, distribution and consumption across society. In this context, policymakers have started to look at prizes, among other approaches, as a potentially powerful instrument in driving ‘mission-oriented’ innovation. The public policy colloquium ‘Sparking social innovation through crowdsourcing and prizes: Does Finland lead the way?’ sought to contribute to these debates by reviewing the successes and shortcomings of one such challenge prize, ‘Solution 100’ organised by the Finnish Innovation Fund, Sitra, in celebration of Finland’s centennial in 2017.

Ville Takala (UCL IIPP), Tuukka Toivonen (UCL STEaPP), Riina Pulkkinen (Sitra), Kalle Nieminen (Sitra) at ‘Sparking social innovation through crowdsourcing and prizes: Does Finland lead the way?’ public colloquium

Reflecting on the challenge prize, Kalle Nieminen and Riina Pulkkinen from the organising team at Sitra explained that a key motivation for Solution 100 was to give all Finnish citizens the opportunity to participate in tackling one of key Finland’s future challenges. For this to be possible, what was needed was a tool that could break societal problems down into components that individuals and communities could grasp and address. And with this goal in mind, a challenge prize seemed for them like an excellent way to design an inspirational and powerful platform for problem solvers from all walks of life.

Nieminen and Pulkkinen explained that the basic idea of a challenge prize is rather simple: announce the challenge, find the most promising teams and award a prize to the best solutions. Behind this rather basic idea, however, exists a wide array of approaches for creating innovations and affecting societal change. In a broader context, explained Nieminen and Pulkkinen, challenge prizes can be seen as part of an experimental culture in government, where testing, failing and quick learning are the new norm for public sector-led development.

Riina Pulkkinen and Kalle Nieminen from Sitra at ‘Sparking social innovation through crowdsourcing and prizes: Does Finland lead the way?’ public colloquium

In the case of Solution 100, the organisers decided to start the challenge prize with a phase where the “wicked problems” were crowdsourced from the Finnish public. As a result of this process, the following challenge statement was agreed upon:

To develop a solution that allows for the more effective identification and utilisation of expertise and capabilities in a world where people and information move from country to country more than ever before.

The competition phase of the challenge prize started with an open call for teams. From the applications, the organisers then chose the 15 most promising teams to participate in a six-month incubation phase where the team’s competed against each other. In the end, a final prize of one million-euros was split between two competing solutions: HeadAI, which harnesses capabilities for identifying expertise using artificial intelligence, and Positive CV, a platform that helps youth to identify their hidden strengths.

Having studied the dynamics of the challenge prize during its final six-month incubation phase, researchers Ville Takala (IIPP), Tuukka Toivonen (STEaPP) and Emma Nordbäck (Aalto University) revealed that teams benefited from it in numerous ways. By participating in the prestigious and extensively publicised competition, teams gained both access to and legitimacy in the eyes of potential customers, users, politicians and other stakeholder groups. Conversations with mentors, the organising team as well as other teams were also extremely beneficial in helping the teams not only to clarify their thinking and vision, but to also reveal entirely new perspectives and frameworks through which to assess their social innovations.

At the same time, depending on their professional backgrounds, major differences could be observed in how the teams reacted to the various logics of the competition. Teams composed of entrepreneurs and other private sector employees generally felt at ease with its hectic pace. However the intense manner in which feedback was occasionally communicated by mentors and judges — and the more general requirement of needing to combine both societal impact and financial viability in the social innovations — resulted in teams composed of public sector employees to struggle. Feeling not completely at ease with some of its aspects, perceived as being too close to the world of startups, public sector teams occasionally found themselves in a negative spiral not able to take full advantage of the support offered.

Takala, Toivonen and Nordbäck therefore concluded that far from being the simple tools to encourage innovations as often assumed, prizes in fact involve complex issues of prize governance. From setting the challenge and the program to choosing mentors and judges, competition organisers are faced with a series of normative decisions that inevitably influence the types of social innovations that will be produced as an outcome of the competition. Simply put, the way you design a prize has implications for the solutions you get.

The latter insight raises the important question of whether competition organisers should in the future seek to accommodate more effectively for both private and public sector logics in their design. More generally, what logics should competitions seek to promote and reward in order to enact genuine social change? A risk exists that competitions end up promoting solutions which, albeit fitting well into the framework of the current economic order, are powerless in tackling the deeper structural issues that inevitably lie at the root of societal problems. As noted by IIPP’s Deputy Director, Rainer Kattel, innovation is always political, and an experimental culture can only be a part of the solution needed. What Kattel called for were mechanisms that support those willing to engage in discussing the normative assumptions behind prizes and missions in general.

Rainer Kattel (UCL IIPP) at ‘Sparking social innovation through crowdsourcing and prizes: Does Finland lead the way?’ public colloquium

Such reflections raise critical questions about the future of innovation methods and practices that innovation agencies around the world are utilising. As demonstrated by Solution 100, challenge prizes can at their best mobilise a wide variety of people into solving societal issues, and furthermore support them in various ways in their attempts to do so. The prize format can therefore function as a way to generate novel approaches to problems of welfare governance and support their implementation into the real world. But how can you ensure that the most effective practices, regardless of their origin, get taken up more widely? For the time being at least, the public sector has much to learn from the private sector in terms of sharing, copying, and sometimes even stealing the most effective approaches to doing things.

What is perhaps most urgently needed at the moment, is a forum where innovative public sector actors, as well as private sector organisations interested in public purpose, can share the challenges and opportunities they face. With this aim in mind, the IIPP has set up the Mission-Oriented Innovation Network (MOIN), which brings together leading global policy-making institutions — including state investment banks, innovation agencies, and strategic/sectoral units within governments — to rethink how public sector agencies, such as Sitra, can create and nurture the capabilities, mentalities and policy instruments needed to reinvent and improve our welfare states so that they are better equipped to tackle the grand challenges of our time.

We are always interested to hear from organisations interested in mission-oriented innovation, in learning-by-doing and in demonstration and implementation projects. For more information about MOIN, please get in touch with IIPP Deputy Director Rainer Kattel:

Ville Takala is Senior Research Associate in Public Value and Digital Transformation at the UCL Institute for Innovation and Public Purpose (IIPP).

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The official blog of the UCL Institute for Innovation and Public Purpose | Rethinking how public value is created, nurtured and evaluated | Director @MazzucatoM |

UCL Institute for Innovation and Public Purpose

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Changing how public value is imagined, practiced and evaluated to tackle societal challenges | Director: Mariana Mazzucato | Deputy Director: Rainer Kattel


The official blog of the UCL Institute for Innovation and Public Purpose | Rethinking how public value is created, nurtured and evaluated | Director @MazzucatoM |