The New York Times has an article today highlighting the growing trend toward prize-based science, especially highlighting InnoCentive, which I blogged about last year.
Award-based research turns out to be especially effective. Companies sponsoring the research only pay for research that delivers results, and they always come in at their budge—whatever value they place on the prize. In addition, you may get several competitors each performing research to attempt a solution to the problem at hand, but you only end up having to pay for the effort that succeeds.
The reason InnoCentive works is because often the best solution to a problem comes from somebody outside the field in question. Petroleum scientists, for example, specialize in their field and therefore do not have expertise that, say, a concrete chemist would have. But John Davis, a chemist specializing in concrete applied what he knew about keeping concrete from hardening to a problem set forth by the Oil Spill Recovery Institute in Alaska in order to keep oil in storage tanks from freezing.
The biggest organizer of research prizes right now is, of course, the X Prize Foundation, who currently has prizes active in genomics, automotive technology, and robotic lunar missions. But they're not the only ones. For several years now, the Defense Advanced Research Projects Agency has used monetary prizes to encourage outsiders to develop technology it can use for military purposes, most notably with regard to autonomous automobiles. And NASA has sponsored a number of challenges related to space exploration, such as the Lunar Lander Challenge, the Astronaut Glove Challenge (won by an engineer from Maine working at his dining room table), and a couple of competitions related to space elevator technologies.
If you have any scientific or technical skills, maybe it's time you took a look at some of these challenges facing us.