Perspectives on Innovation

By Simon Schneider, General Manager, Grand Challenges & Head of EMEA, InnoCentive

In the wake of the global financial crisis and ongoing challenges facing the world economy, companies, government agencies, and non-profits need new ways of funding large prizes. There are many instances where organizations come to us with grand problems, but lack the finances to put up the entirety of the substantial prize money they would need. So can we find a new way to fund Grand Challenges?

We’ve started to explore this question by breaking it down one piece at a time, each of which we’ll explore in a white paper. There are of course many different features of the current funding environment, so our first step has been to narrow it down very specifically. We’ve decided to look at what has happened to one of the traditional financiers of early stage projects: Venture Capitalists (VCs).

Driven by the recession, VCs are increasingly financing later stage (and lower risk) projects. This is going to affect many of the projects that our Grand Challenge clients are looking for – as they often need to be launched from the very early stages of development, and look for the crazy, risky ideas to solve a problem that the usual ideas have not been able to solve. Can we draw VCs back into the earlier stages, and into the projects that our clients are looking for?

The idea, which we’ve explored in a recent white paper, is to make a trade. VCs have initial capital, but are also looking to identify profitable opportunities. Prize competitions are an effective tool for generating a lot of great ideas and picking out the best ones, but might lack the initial capital input required in certain Grand Challenge cases. So our concept, Prize Venture, makes a trade of initial capital for identified ventures.

Our white paper has only been a first step in taking this concept forward. We’re already working with some partners to put this theory into application by combining venture capital and prize competitions. One thing that has already become clear is that it is better suited to some industries than others.

There is clearly a lot of potential for such a  model, but it should not be applied to every problem and every field. Our new white paper series is set to explore other aspects of the investment environment, so that we can keep building up a bigger picture of where new funding ideas can fit together with prize competitions. Take a deeper look at the white paper, and keep an eye out as we share more of our findings.

We’re trying out a new crowdfunding initiative, which is still in its very early stages. Here’s what we can share with you already – if you’re interested in knowing more, get in touch!

Do you have an interest in new technologies in smart sensor systems? We’re looking to run a Challenge in this space, and half the funding has already been pledged by a government entity. We are looking for individuals and organizations that would be interested in contributing to the prize fund. Minimum contribution is $1000 and we are looking for a minimum of $50,000 in pledges. This is a great opportunity for anyone who is interested in open innovation Challenges and the smart sensor space, but is not ready to fully fund the project alone. If you’re interested or would like more information, please contact jslater@innocentive.com by April 26th, 2012.

In late March, we announced the winner of the Economist-InnoCentive Transparency Challenge.  Benjamin Skowera, an associate at SEI Investments presented his solution at the Ideas Economy: Innovation event on March 28th in Berkeley, California. The InnoCentive Challenge, which attracted more than 600 problem Solvers and received more than 115 submissions on the InnoCentive website, asked participants to identify an emerging technology or a national or global information platform and propose an innovative way to use this resource to motivate governments to engage in productive and open discourse with citizens.  Below is a video of Benjamin and Matthew Bishop, US Business editor and New York Bureau Chief for the Economist discussing Benjamin’s winning solution at The Economist’s Ideas Economy: Innovation 2012 event in Berkeley, California.

InnoCentive, EMC and EDF recently announced a new Eco-Challenge seeking solutions for tracking shipments of used electronic components and subsystems and ensuring that they are disposed of responsibly. Safe, legal and transparent e-waste disposal is an ongoing concern for both industry and environmental groups, which want to make sure heavy metals and chemicals are not released as part of the recycling process.  We asked Kathrin Winkler,  Vice President and Chief Sustainability Officer for EMC Corporation to tell us more about the Challenge.

Hi Kathrin – thanks for talking with us about your Challenge.  Can you tell us why responsible e-waste disposal is such an important issue for EMC and for the electronics industry as a whole?

Certainly.  Electronic waste actually contains a lot of material of value – particularly precious minerals like gold and copper. In fact, it is often said that a ton of eWaste contains more valuable metals than an equal amount of ore! The problem is that extracting this material needs to be done responsibly to protect human health and the environment. Too often, it ends up in the hands of informal workers – usually exported (often illegally) from developed economies to those still developing, but increasingly from waste generated in-country. These workers do not have the knowledge or resources to take proper precautions to protect their health and their environment. Or it finds its way into municipal landfills where some of the manmade substances in the equipment can have long-term environmental  impacts. Another primary concern is data security. At EMC, people rely on us to set the bar in terms of protecting customer data, which includes secure disposal. Responsible disposal of eWaste helps ensure that data is secured, which benefits everyone.

Why is it so difficult to tracke-waste now?

There are really two major challenges to tracking eWaste. The first is that much of it is disposed of by the consumers or users of the equipment, and as vendors, we have no way to know what happens to it. The second challenge is that the disposal process itself involves many players, each of whom tends to break it down to smaller component parts that are mixed with material from other sources and then passed on to another processor.

How close do you think the industry can come to 100% trackable e-waste?

You know, I think it’s unlikely that we will ever be able to trace everything. Ideally, we can remove the need to trace eWaste if the proper incentives and solutions are put in place to manage it responsibly. I am a bigger fan of trying to solve the underlying problem, than simply attempting to control a process we don’t like. Unfortunately, we’re not there yet, so traceability is an important bridge until the underlying system is improved.

On the other hand, we  have such a plethora of new tools available to us – from satellite data to Big Data analytics to new materials – that we may well have a breakthrough. I do think what may well arise is a means of either tracking sample streams rather than all of the eWaste, or else an approach to better understanding where it ended up without having to track its entire path. In that case, we’d hopefully have a handle on each end of the journey and could then reverse engineer the route it took.

Where do you think a solution to this problem might come from?

It’s probably most likely to come from an iconoclast – someone who sees patterns where others don’t – recognizing an analog from a completely different problem domain.

What do you plan to do with the solution?

Hard to say, without knowing what form it takes. First analyzing feasibility, hopefully performing a test or proof-of-concept, ideally with a partner or two. After that, results will determine the course of action. One thing we do know – if it’s a breakthrough idea that is broadly applicable to the market, we will want to share it!

Is there anything else you’d like our Solvers to know about your Challenge?

Yes. We have a grand vision, and it is more than stopping eWaste from going to developing countries. What we’d really like to see is an ecosystem of parties and economic model that allows eWaste processing to both be safe, and to provide economic opportunity in areas that depend on it for subsistence. And if we can create a financially sound model for recovering the maximum value from used electronics, we can do a better job of closing the loop and reducing the extraction of raw materials. This Challenge is an important step in a re-imagining the future!

Very interesting – thanks Kathrin and good luck with your Challenge!

Thank you.

Every so often, we are able to offer our Solvers a special opportunity we call a “Priceless Prize.”  A Priceless Prize is an award that goes beyond financial compensation and provides the winning Solver access to an event or experience that they would never have access to on their own.  In the past, Priceless Prizes have included invitations to attend SciFoo camp, opportunities for media exposure and speaking roles at high level events.

Through our partnership with The Economist, we’ve awarded several Priceless Prizes.  Challenge winners are invited to present their solutions at the exclusive Ideas Economy events, which draw world leaders and business people, often the exact people who can help turn a good idea into a world-changing solution.  Previous Economist InnoCentive Challenge winners have seen their solutions piloted by non-profit organizations, written up in prominent industry journals and funded by Fortune 1000 corporations.

The Economist-InnoCentive Smart Systems Challenge provides a fantastic opportunity for Solvers from any background to gain exposure to high-profile leaders in the business of big data and information technology at the upcoming Economist Ideas Economy: Information event in San Francisco, California, USA on June 5-6, 2012.  The winning Solver will receive:

• An honorarium of $1000
• Compensation for travel expenses
• Admission to the conference for themselves and a guest
• An interview with an Economist editor live on-stage at the event
• Video promotion of the event recording on Economist.com and through social media channels
• Publicity for the winning solution in the post-event wrap report to all delegates/speakers, and
• An official meeting with members of the Ideas Economy programming team to discuss ideas for venture capital or public policy.

If you believe that you can develop a solution that will improve the health, happiness, safety or aesthetics of a community in a compelling and elegant way, and if you speak the language of “big data”, this Challenge can provide you with a once in a lifetime opportunity.  Log in to review the Challenge details and maybe we’ll see you in San Francisco in June!