About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

This will be the year that governments, philanthropists and businesses launch big challenge prizes to democratise problem solving

Problems are opportunities for creativity. Easy enough to say, good as basis for planning and thinking, but difficult to live and breathe. Those who do are the great innovators, inventors and entrepreneurs - people with uninhibited qualities of creativity and risk taking

Lucky for these people, we've conjured up a few goodies to solve: indebtedness, ageing, rising inequality, public health, declining competitiveness, the list goes on... Where then are all the solutions? Of course there's quite a lot happening. An example of this is the digitalisation of everything from underwater sensors to dog collars - that combined with the acceleration of computation power, promises an era of 'big data' to democratise problem solving and decision making. The digitalisation of manufacturing including new processes such as 3D printing, promises to also democratise making of stuff.

At the same time the rich world is increasingly hierarchical with a large portion of control residing with a relatively small core of people, companies and institutions. The rich world is more compartmentalised, smart people are more likely to be employed within big structures, innovating within parameters. How then, do we democratise problem solving on a grand scale and create sand-pits for new big ideas?

One method successfully deployed in the industrial revolution were challenge prizes - by defining a problem and creating an open market for the solution with a large cash incentive, that led to people coming out of the woodwork to invent such things as margarine and vacuum packaging.

Examples include the 'Longitude Prize' - a challenge to solve one of the biggest problems of the 18th Century, resulting in an invention by a self-educated watch maker which accurately determined longitude and changed the world, transforming global trade and preventing huge numbers of deaths.

Some key emerging industries owed their success to prizes. The French chemical industry for example came to life following a prize that resulted in the creation of an artificial process for producing Alkali. In New England, the textile industry owed its success to the development of a prize winning hydraulic turbine

The increasing need for mobilising people to solve big problems, will see the re-emergence of big challenge prizes. Recent examples include the Ansari X-Prize for manned private spaceflight - credited with stimulating the new private spaceflight industry in the US. In 2010 the philanthropist Wendy Schmidt sponsored the Oil Cleanup X prize which was won by a team for a device that skims oil off water 3X faster than pre-existing technology. The World Bank are also now developing prizes for new agricultural technologies to increase food production and benefit small holders.

This momentum will build in 2013, with governments, philanthropists and businesses looking for ways to unlock the vast creative potential of people to break out of the silos, to innovate and solve problems. Watch this space

@trisdyson