Becoming Challenge Works: our next decade championing open innovation

As we celebrate our 10th anniversary and evolve from Nesta Challenges to become Challenge Works, founder and Managing Director Tris Dyson looks back at a decade of success and towards a future of ever greater impact through innovation and challenge prizes.

Nesta Challenges began life 10 years ago as an experiment, set up by Nesta and the UK government to rekindle in the UK the lost art of designing and delivering challenge prizes to stimulate innovation.

The UK had been a pioneer in challenge prizes, going back to the original Longitude Prize in the 18th century, but leadership had since passed to the US – where prizes were undergoing a strong resurgence under the Obama administration.

The “big idea” with prizes is to make rewards conditional on outcomes rather than solely on inputs, and to thereby tap into innovators’ imagination, creativity and initiative rather than wrapping them up in the reporting and paperwork associated with traditional grantmaking.

A decade of impact

Since 2012 we’ve been busy, running over 80 challenge prizes with partners in the UK and internationally, distributing £84 million in funding and mobilising more than 12,000 innovators around the world to tackle a wide range of innovation challenges. What started as an experiment is now a thriving social enterprise within Nesta.

And as we document in our 10 Year Report, we have demonstrated that prizes are a highly effective method for catalysing innovation, accelerating the growth of innovative businesses and reaching diverse innovators.

Take the Open Up Challenge, which saw us work with the UK competition regulator to inject greater innovation and competition into small business banking through a challenge prize.

We ran the Challenge in parallel with the UK launch of open banking, providing a world first data sandbox for fintechs in partnership with the UK’s nine biggest banks. Market participants told us that SME banking was an afterthought for the fintech community – the real action was in consumer products and services.

But the Challenge successfully engaged many of the UK’s most exciting fintechs, new and established, to bring forward open banking-powered innovations to improve SME banking, helping to create a thriving innovation ecosystem within months of open banking’s launch. The fourteen participants in the opening stage of the Challenge collectively went on to secure £638m in financing after taking part.

Because of this and many other examples from the past decade, we are more passionate today about prizes than we have ever been.

Through our prizes every day we meet brilliant individuals and businesses who, given the right opportunity, can develop innovative solutions to problems that matter, bring these to market and scale them.

We work hard to find and support these innovators, making it our business to arm them with everything they need to succeed on their journey.

Looking ahead

But prizes are still a long way from fulfilling their potential to drive impactful innovation and economic growth. And we’re ready to change that.

To lay the groundwork for continued growth in our impact, as we embark on our second decade we are rebranding from Nesta Challenges to become Challenge Works, a social enterprise within the Nesta family wholly dedicated to the design and delivery of challenge prizes.

What we do and the way we work is not changing. Building on a decade of hands-on experience designing and delivering prizes in the most diverse settings, Challenge Works will continue to offer an alternative model for funders who want more from their innovation investments.

We will work with our partners to develop prizes where there are real market failures and where we can define clear, addressable goals for innovators to focus on, and we will continue to go above and beyond to engage the innovators best placed to take on the challenges set.

Bigger, bolder, more ambitious

But we also start our second decade with bigger, bolder ambitions for challenge prizes. The world finds itself at a critical juncture. We face compounding problems, but also unprecedented opportunity to discover solutions and expand innovation frontiers.

The consequences of climate change are felt more harshly by the year, but innovation can mitigate these impacts and shape a different future.

The growth of chronic health conditions and the widening global inequity in access to healthcare can be reversed.

An ever more complex, connected and digitally-driven world poses complex social challenges but also makes rapid, positive, life-changing change possible – if harnessed and directed wisely.

The next three years

So for the next three years, we will focus particularly on opportunities in the four following priority areas:

• Climate Response Our challenge prizes will create innovations that help planet earth and its inhabitants tackle the climate crisis.
• Resilient Society Our challenge prizes will create innovations that help people participate fully in society by enabling them to access the services, opportunities and networks they need.
• Global Health Our challenge prizes will create innovations that enable people to prevent, diagnose and treat disease as well as mitigate chronic conditions.
• Technology Frontiers Our challenge prizes will create innovations that harness frontier science and technology and direct it toward socially useful goals.

Challenge prizes work

Challenge prizes work, and it is time for bigger, bolder prizes that tackle the great challenges of our era. As Challenge Works, we’ll be devoting all our energies in our second decade to ramping up our impact and establishing prizes in the mainstream of innovation funding methods where they belong.

Of course we can’t do any of this without you – our partners, collaborators and innovators – so we invite you to join us on this exciting journey to shape a better future.

You can read more about our priorities for the coming decade as Challenge Works in the report we’re publishing today, Unearthing the Unexpected.