Procurement has long been one of the areas with the need for radical innovation. Apparently governments are doing more compared to companies using innovation crowdsourcing as a way to continue improving in this area.
Colby Hochmuth of FCW recently covered this matter in his post titled “Challenges and prizes: Procurement vehicle of the future?“: It’s a nice read in which Hochmuch provides an account of U.S. Government achievements in this space in the last 5 years.
In 2009, President Barack Obama released his Strategy for American Innovation, which calls on agencies to promote innovation by using new tools, including challenges and prizes. A website called Challenge.gov was subsequently launched in 2010 and since then numerous government challenges have been posted on the site to procure their solutions through crowdsourcing. The government refers to this initiative as “A partnership between the public and the government to solve important challenges.”
From September 2010 to September 2013, 58 federal agencies ran 288 competitions on Challenge.gov, according to the website which is free for agencies to use. Fast forward 5 years, several agencies now have dedicated offices and staff for managing the prizes and challenges.
Perhaps the most interesting case of Challenge.gov use is NASA’s Innovative Partnerships Program which has led to some impressive results: For example, in NASA’s Lunar Lander Challenge, Masten Space Systems and Armadillo Aerospace received a combined $1 million award for their spacecraft. And therein lies the potential of challenges and prizes to transform the procurement space.
Jenn Gustetic, assistant director for open innovation at the Office of Science and Technology Policy is really pleased with the results: “You don’t have to pick what team is likely to succeed based on a written proposal,…This gives them a way to compete head to head and only be judged based on their performance.”
Government use of crowdsourcing for procurement and innovation is not limited to the U.S.: We have seen similar initiatives in the European Union. Will this way of procuring services grow? Certainly; and perhaps this will also make a shift in the way companies look at procurement.
What do you think?