Innovation Contests – Where are we?

Innovation contests in their basic structure have a long-standing tradition and can be attributed to continuously gain in importance as a corporate practice. A deep understanding of this online instrument, however, is still lacking. Contrary to other methods used to realize open innovation, research in the field of online innovation contests displays a growing, but only rudimentarily intertwined body of publications. This paper provides the essential systematization of the field, integrating both, academic knowledge and business deployment. Juxtaposing 33 relevant journal and conference publications with empirical basis and an analysis of 57 real-world innovation contests, we highlight interesting disruptions and distill six pathways for future research. These cover the optimal degree of elaboration, the interplay of competition and community, the importance of community applications, the trajectory towards open evaluation, and the identification of additional design elements

Innovation Contests: How to Design for Successful Idea Selection

Innovation contests provide several benefits, but many organizations struggle with managing emergent challenges that occur during the idea selection process. This paper builds on qualitative interviews, where practitioners shared their experiences with managing innovation contests. Across the 13 contest domains studied in 31 cases, we identified five frequently occurring contest goals: (1) promote entrepreneurship, (2) collect innovative ideas, (3) elevate awareness, (4) explore market opportunities, and (5) find talent that influence the design of the selection process. Moreover, for five common emergent challenges we identified how practitioners apply manual and IT-enabled coping strategies, which can be associated with three design elements, i.e., the (1) ideas for the innovation, the (2) raters of the ideas, and the (3) duration of the selection process. These findings are summarized in a guiding framework that helps practitioners design, navigate, and manage the complex process of idea selection

Crowdsourcing

Chapter 2 in the book Cultural-historical perspectives on collective intelligence. In the era of digital communication, collective problem solving is increasingly important. Large groups can now resolve issues together in completely different ways, which has transformed the arts, sciences, business, education, technology, and medicine. Collective intelligence is something we share with animals and is different from machine learning and artificial intelligence. To design and utilize human collective intelligence, we must understand how its problem-solving mechanisms work. From democracy in ancient Athens, through the invention of the printing press, to COVID-19, this book analyzes how humans developed the ability to find solutions together. This wide-ranging, thought-provoking book is a game-changer for those working strategically with collective problem solving within organizations and using a variety of innovative methods. It sheds light on how humans work effectively alongside machines to confront challenges that are more urgent than what humanity has faced before. This title is also available as Open Access on Cambridge Core.Chapter 2 describes crowdsourcing, a process where problems are sent outside an organization to a large group of people—a crowd—who can help provide solutions. Online citizen science and online innovation contests are of particular interest because of their societal value. Within innovation, the two selected examples are from IdeaConnection and Climate Co-lab, two innovation intermediaries who host different types of online innovation contests. One of these contests, the IdeaRalley, represents an interesting new crowdsourcing method that allows hundreds of experts to participate in a one-week long intensive idea building process. In online citizen science, Zooniverse (e.g. Galaxy Zoo) and Foldit, are selected as two prominent, but contrasting examples. The online protein folding game Foldit stands out as a particularly successful project that show what amateur gamers can achieve. The game design combines human visual skills with computer power in solving protein-structure prediction problems by constructing three-dimensional structures. Most successful solutions are team performances or achievements made by the entire Foldit gaming community. All the examples in this chapter illustrate successful case stories, and the detailed analysis identify basic problem-solving mechanisms in crowdsourcing.publishedVersio

Innovation Contests with Entry Auction

We consider procurement of an innovation from heterogeneous sellers. Innovations are random but depend on unobservable effort and private information. We compare two procurement mechanisms where potential sellers first bid in an auction for admission to an innovation contest. After the contest, an innovation is procured employing either a fixed prize or a first-price auction. We characterize Bayesian Nash equilibria such that both mechanisms are payoff-equivalent and induce the same efforts and innovations. In these equilibria, signaling in the entry auction does not occur since contestants play a simple strategy that does not depend on rivals' private information

Prizes and Lemons: Procurement of Innovation under Imperfect Commitment

The literature on R&D contests implicitly assumes that contestants submit their innovation regardless of its value. This ignores a potential adverse selection problem. The present paper analyzes the procurement of innovations when the procurer cannot commit to never bargain with innovators who bypass the contest. We compare ?xed-prize tournaments with and without entry fees, and optimal scoring auctions with and without minimum score requirement. Our main result is that the optimal ?xed-prize tournament is more pro?table than the optimal auction since preventing bypass is more costly in the optimal auction

In search of excellence - Innovation contests to foster innovation and entrepreneurship in Portugal

Numerous initiatives of different nature have taken place in Portugal over the recent years aiming at raising consciousness of the importance and advantages of innovation and entrepreneurship, persuading businesspeople to place innovation as strategic intent and encouraging would-be entrepreneurs to come forward with novel businesses ideas. Innovation contests are but one of such initiatives. From sporadic events before 2000, the phenomenon gained unprecedented dimension and growing sophistication at several levels, including the number of innovation contests launched annually, number and kind of organizations involved, volume and kind of prizes and support in business plan construction. Today, this is a popular means that a range of different organizations use to uncovering novel business ideas and promoting innovation and entrepreneurship. Based on a large data base purposefully built for this research by the author, this paper aims to describe the phenomenon of innovation contests in Portugal and characterize its evolution over the period 2000-2008. Findings show a general use of contests as instruments to promote and prize innovation across a range of target audiences going from high school students to established businesses; an increasing trend in the number of innovation contests launched annually in Portugal; high rates of rotation of the innovation contests launched annually over the period under analysis; a growing diversification in the type of promoters which is particularly clear from 2004 onwards; and that private firms, higher education institutions and business associations appear to be gaining a prominent role as promoters of innovation contests.Innovation contest, innovation, entrepreneurship, Portugal.

ECONOMICS OF INNOVATION The Effects of Prize Structures on Innovative Performance

Successful innovation is essential for the survival and growth of organizations, but how best to incentivize innovation is poorly understood. We compare how two common incentive schemes affect innovative performance in a field experiment run in partnership with a large life sciences company. We find that a winner-takes-all compensation scheme generates significantly more novel innovation relative to a compensation scheme that offers the same total compensation but shares it across the ten best innovations. Moreover, the winner-takes-all scheme does not reduce innovative output on average and, among teams of innovators, generates more output than the less risky prize structure

Why contests improve philanthropy

Knight Foundation has supported nearly a dozen open contests, reviewed almost 25,000 applications and chosen more than 400 winning ideas. This report discusses what the Foundation has learnt from this experience about how good contests work, what they can do, and what the challenges are