Crowdsourcing Social Impact

Competition: it's the life's blood of the American economy. So how about a contest to help solve one of the country's most intractable problems -- the jobs crisis that has left more than 20 million Americans out of work or underemployed?

That's the notion behind the Job Raising Challenge, a new contest that McKinsey, along with our partners the Huffington Post, the Skoll Foundation, and CrowdRise, has launched to surface innovative ideas to get people back to work. We're searching for non-profits who help to create jobs -- organizations doing everything from retraining workers and closing the skills gap to providing interview suits for job applicants who can't afford one themselves. The contest will help raise money and awareness for these job-creators -- and the Skoll Foundation has put up $250,000 to reward the winning organizations.

The Job Raising Challenge is the latest example of how competitive challenges are playing a growing role in developing innovative solutions to entrenched societal problems. In June, for example, Bloomberg Philanthropies pledged $9 million to fund the Mayors Challenge, a contest to find the best ideas from local governments to solve the common challenges they face.

In our 2009 study, And the Winner is..., McKinsey observed a renaissance in competitions: they were growing rapidly in number and size and appearing in new forms. A wider range of sponsors was also emerging, eager to apply competitions to a broader swath of societal objectives. The trend has only intensified in the past three years. Competitive challenges have become an even more popular approach to finding innovators and connecting them with real-time problems and the institutions committed to solving them.

Since we published that report, a number of important shifts have occurred in the sector. First, the institutions sponsoring challenges today increasingly want to use rewards to inspire new achievements, rather than to recognize old ones. Philanthropists and nonprofit institutions are moving away from what had once been the default position: creating yet another exemplar prize recognizing the best achievement or insight in a discipline.

Now competitions are seen as an excellent way to inspire and share high-potential yet low visibility ideas -- and often several at once. Great examples and platforms abound. Ashoka Changemakers, for instance, runs a variety of compelling social challenge prizes geared towards connecting great ideas with funders rather than celebrating a single "winner."

Second, local, regional, and national governments all over the globe are more active in awarding -- and competing for -- funding over the past three years. The Obama Administration launched in April 2010 as a one-stop shop "where entrepreneurs and citizen solvers can find public-sector prizes." A number of US government agencies launched challenges in 2011; thanks to the COMPETES legislation, departments including Health & Human Services, Agriculture and Veterans Affairs now sport their own competitions. In the UK, the National Endowment for Science, Technology, and the Arts (NESTA) -- a private foundation that started off as a government think tank -- has created several prizes to support innovation in local governments and communities.

In some ways this is a return to roots. From the UK's Longitude Prize, famously won by the savant clockmaker John Harrison, to France's Food Preservation Prize, which led to modern canning techniques, governments once relied on competitions as a critical tool for getting things done. Since 2009, we have seen a creative resurgence in public sector prize-giving. Governments have rediscovered competitions as tools that can go beyond grant-making, intellectual property rights and contracting to overcome technological barriers, generate bold ideas and, in some cases, even change behavior.

Finally, many new challenges have shifted the focus from the size of the prize to the award process itself. In 2009, we identified this as one of the more powerful and under-recognized attributes of competitions: their ability to change behavior and enrich the participants who engage in a contest. NESTA, for example, created a unique process that was heavy on technical assistance for competitors, including a "camp" that brought together council governments to share ideas and improve their entries. NESTA's emphasis on the competitive process -- and its willingness to invest in it -- didn't just improve the quality of submissions. It also strengthened the skills and capabilities of local councils, making them more likely to generate and follow through on pioneering ideas in the future.

That shift reflects a growing awareness that the most successful competitions are often not the ones with the heftiest purse. In many cases, the biggest social impact comes from encouraging a lot of people to compete rather than identifying a single winner. Indeed, the appeal of creating competitions like the Job Raising Challenge to solve problems lies in a simple concept: by calling in ideas from anyone, anywhere, you increase the wealth of ideas from which to choose. And at the same time, you boost the chances of hitting on a once-in-a-lifetime answer to some of our generation's most pressing challenges.