It’s Time to Tap Into Innovation: Federal Challenges Can Help Solve Stubborn Problems

By Reed Van Beveren and EmmaLi Tsai

Since the 1700s, federal competitions have held a pivotal role in shaping historical milestones—they’ve been used to design the White House, pioneer the first transatlantic flight, and devise methods to determine longitude so we could sail further than ever before. Today, these challenges—also known as prize competitions—stand as an exceptional platform for federal agencies to collaborate with external organizations to push the boundaries of science and discover innovative solutions to diverse problems. The America COMPETES Reauthorization Act of 2010 revitalized the use of prize competitions across the federal government to foster community engagement in federal projects. Since this reauthorization, an impressive sum (exceeding $500 million) has been offered in prize competitions. Whether it’s tracking space debris, formulating communication strategies for environmental justice, or developing cutting-edge AI systems for healthcare, these competitions rally brilliant problem solvers and catalyze the development of new technology.

Compared to widely-used government contracts, challenges can be structured in a myriad of ways (i.e., with multiple phases, timelines, etc.), and they’re open to everyone with low barriers to entry. They can also be co-funded with outside organizations—for example, since 2021 nearly 71% (see clip at 35:11!) of competitions have found partners. For innovators, challenges present unparalleled opportunities to obtain funding without mandated/onerous reporting requirements, and allows the winner to maintain all intellectual property rights after the prize is awarded—a stumbling block that often stymies private sector engagement with the government. Given their advantages in jump starting and accelerating innovation, challenges are an especially under-utilized way for environmental and natural resource agencies to work with external organizations on the development of new solutions to known problems. 

Environmental Agencies Use of Challenges Has Not Kept Pace with Other Agencies

For these reasons, we were keen to explore the use of challenges in environmental agencies, and thus investigated all data through November 2023 from the Challenge.gov site. Our environmental and natural resources agencies of interest include: Department of Interior (DOI), Environmental Protection Agency (EPA), National Oceanic and Atmospheric Association (NOAA) (within the Department of Commerce), and Department of Agriculture (DOA). We recognize some competitions at non-environmental agencies may be environmentally focused, and vice-versa, but we limited our analysis to the agencies above for simplicity’s sake. 

Of the agencies that participate in prize competitions, the Department of Health and Human Services (HHS), Department of Defense (DOD), National Aeronautics and Space Administration (NASA), Department of Energy (DOE), EPA, and DOI have created the most prizes since 2010.

Graph depicts the number of challenges produced at the top 20 federal agencies since 2010. Environmental agencies are noted in green, and non-environmental agencies are blue. 

The overall use of prize competitions has increased since 2010—both environmental and non-environmental agencies set records with the number of challenges released in 2022, with DOD and DOI initiating 65 and 15 competitions, respectively. Although the number of challenges created per year has increased, the number of agencies participating in challenges has decreased since 2010. Therefore, the positive increase in competitions results from a few agencies (DOD and HHS, in particular) that have increased their use of prize competitions over time, rather than more agencies participating in them across the board. 

From 2010 to 2023, challenges created by environmental agencies increased by 0.19 challenges per agency/year, and all other agencies increased by 0.53 challenges per agency/year. And while all other agencies appear to have increased their average use of prize competitions per year, environmental agencies have barely increased their use since 2010.

The number of challenges per agency from 2010-2023 at environmental (green) and non-environmental agencies (blue). We divided the number of challenges by the total number of agencies that participated in a given year to account for uneven sample sizes. 

Challenges Aimed at Developing Tech Are Particularly Underutilized 

Challenges can be further grouped into types to indicate whether the goal was to produce new technology, software, analytical tools, multimedia, ideas, or to further scientific exploration. For example, previous challenges in the environmental space have created new technology as well as software and applications like water toxicity sensors and a mobile app for scientists collecting data in the field. With so many prize competitions launched every year, we wanted to know—what are they being used for?

From 2010-2023, the use of prize competitions for software, technology, and analytical tools have increased substantially at all other agencies (4.12 challenges per agency/year)—but only slightly at environmental agencies (0.22 challenges per agency/year). We see similar trends with prize competitions designed for new ideas. This “creative” type exhibits a slight negative trend for both groups from 2010-2023, and trends in the scientific challenge type are similar between both groups, and slightly positive. Broadly, the largest difference between the two groups are within the analytics and ideas category, where environmental agencies do not exhibit the same stark positive increase found across all other agencies.

The number of primary challenges types from 2010-2023 at environmental (green) and non-environmental agencies (blue). 

Structuring Challenges For Success 

In addition to providing flexibility to tackle a multitude of problems, challenges can also be structured in various ways to achieve the desired end product. For example, this $1 million challenge aimed at detecting lead poisoning was structured into two main phases over about nine months: (1) concept/ideation, and (2) development and proof-of-concept. More complex challenges, such as the $650,000 multi-year NASA’s TechLeap Challenge for integrating space payloads, has a registration phase, application phase, evaluation phase, two rounds of system builds, and finally, the performance incentive phase where the team gets to implement their product onto a flight vehicle. 

Although structuring prize competitions takes time and effort, a well designed competition often leads to a successful final product. From conversations with employees and the prize and challenge toolkit, a detailed understanding of the problem is central to a successful challenge. At this step of the design process, it’s critical to identify the goal of the challenge, why it has not been solved yet, and what breakthroughs might be required to achieve the desired end product. Considering this may be a daunting learning curve for agencies that are new to prize competitions, external partners can assist federal agencies with scoping problems and also assist in sharing how competitions have fostered the development of a new idea, technology, or scientific discovery. Success stories like these can help promote the use of challenges at federal agencies as useful tools for innovation.  

While we don’t have longitudinal data to investigate the way challenges are structured—and whether they’ve been successful—we have some insights into the duration of the competition and the amount that was rewarded. From the data available, prize competitions made by environmental agencies appear to have smaller prize amounts but are similar in duration. In comparison to all other agencies, environmental agencies are also 14.3% less likely to offer a monetary prize.

Let’s Properly Fund, Staff, and Share Success Stories from Challenges

The freedom that comes with these challenges presents a huge opportunity for federal agencies to tap into a pool of experts to solve a problem. Historically, such competitions have yielded remarkable advancements—allowing us to recover oil from the surface of the ocean, improve our ability to detect seizures, and also design affordable housing. Despite the inherent flexibility afforded by prize competitions, it’s not quite clear how to get environmental agencies to use them more.

Identifying the precise reason behind these observed trends is difficult, as numerous factors influence an agency's utilization of prize competitions. Notably, some agencies benefit from having a designated prize competition lead: an expert within the agency tasked with helping project managers orchestrate and create challenges. Designing an impactful prize competition also demands considerable effort—a dedicated prize competition lead not only shortens the learning curve for agency employees interested in running one, but also raises awareness about the existence of such opportunities and associated success stories. Awareness at federal agencies is particularly important, it seems, as challenges can originate in many places within an agency. For those curious about challenges, there is a government-wide community of practice that has approximately 800 members with a shared interest in using them. 

For agencies where a prize competition role may be difficult to secure, external partners could assist agencies with defining, scoping, and executing prize competitions. This collaborative approach alleviates the burden on federal agencies that may not have the capacity to invest in fully designing prize competitions. External organizations can serve as liaisons between competition participants and federal agencies to share case studies of how competitions have led to scientific breakthroughs or new technologies. Success stories and best practices like these can promote the use of challenges as a valuable mechanism for engaging with communities of experts to drive innovation—including, we hope, across key environmental and natural resource agencies moving forward.

Are you interested in learning more about this work or giving us feedback? Don’t hesitate to reach out!