The X Factor

How do you encourage the innovation needed to make a better world? That was the theme of the excellent Incentive 2 Innovate (i2i) conference on June 8th-9th at the United Nations, in which both Michael and Matthew took part.

The conference was run by the X-prize foundation, which is trying to use incentive prizes to drive innovation and breakthroughs in genomics, energy and space travel.

Peter Diamandis, founder of the X Prize Foundation, says he originally used X as a placeholder for the name of whoever he would eventually convince to fund a prize. Now X is the brand!

A comprehensive paper on how to design prizes was the meat in the panel moderated by Matthew. The McKinsey consultants who wrote it showed that in the past decade there has been a sharp increase in “incentive prizes” (which encourage behaviour that the prize-giver wants), relative to “recognition prizes” (which celebrate past behaviour the prize-giver approves of). We welcome this shift in the book, as incentive prizes are likely to leverage far more bang for the philanthropic prize-giver’s buck.

Michael moderated a panel on innovations in global development.(Diamandis confessed to the conference that the X Prize Foundation it is still wrestling with how to define the rules for a prize in the area of reducing poverty (answers on a postcard to Peter).)

Michael described how he had seen the philanthrocapitalists shake up the development world with new ideas. He then challenged the participants to think about how the “customers” for global development, the poor themselves, can be integrated into finding solutions that really work.

Amir Dossal described the evolution of the UN Office for Partnerships, which he runs, that started with Ted Turner’s $1 billion donation – a gift in 1997 that really kicked off the philanthrocapitalism revolution, as we describe in the book. 

This partnership approach is now being embraced up by USAID, the development arm of the US government. Its Deputy Director for Partnerships, Carol Grigsby, talked about its first steps, under the Bush Administration, to reach out and engage innovators through challenge competitions and a new outreach website.

We have argued in the book for this type of partnership between government and the private sector, so we hope that these ideas spread.

The two other panel members came from the nonprofit world. Andreas Widmer (whose career includes serving as a Swiss guard to the Pope!) is carrying his experience as a technology entrepreneur into finding enterprise-based solutions for poverty through his Social Equity Venture Fund.  Charlie Brown runs Changemakers, an initiative of our old friends Ashoka, that is running competitions to tackle a wide range of problems, including education in Africa.

All the panelists recognised that they had a long way to go to really reach out and involve the poor in solving their own problems.Yet it is a good sign that thinking this way is on the rise.

  The spread of mobile phones across the developing world has huge potential to transform the development business. But, as one of the discussion groups at the conference pointed out, this will require finding new ways of framing problems so that these poorer customers can really engage with solving them.

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