March 23, 2010


Earlier this month, with little fanfare, the Obama Administration took a small but significant step toward encouraging greater technological innovation. On March 8, the Office of Management and Budget issued a guidance to federal agencies on the use of challenges and prizes to spur technological innovation. This memorandum seeks to “strongly encourage” federal agencies to “utilize prizes and challenges as tools for advancing open government, innovation, and the agency’s mission.” It further explains that many federal agencies have sufficient statutory authority to create technology inducement prizes with existing funds and spending authority. More here.

The Obama Administration is to be commended for this initiative. If the federal government is to encourage greater technological innovation, it needs to move beyond the traditional (and largely ineffective) tools of subsidies and mandates.

I had a column on this subject a while back.

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