Putting a bounty on a problem

Continuing on the theme of collaborative problem solving, Fortune’s David Kilpatrick highlights the achievements of InnoCentive. The article is for Fortune subscribers only, but I’ll fill in the blanks.

As most computer geeks know, if you’ve got a question or a problem to solve, the quickest way to an answer is to ask online. InnoCentive, spun off by Eli Lilly as a new, cost-effective way of solving generic scientific problems for companies, just formalized this concept. Instead of using their own precious R&D resources, they can use InnoCentive as a go-between to anonymously post problems and cash prizes to to a global community of scientists.

Cash prizes range from $10,000 to $100,000 USD. IP ownership remains with the sponsoring company.

InnoCentive should accelerate innovation even as it lowers costs for companies and ultimately prices for consumers. (One seeker has found that this process delivers six times the ROI of conventional R&D.)…As the offshoring controversy has underscored, these days it matters less where you live than whether you have the talent and knowledge people want. Says Alph Bingham, the Lilly executive who thought up InnoCentive: “There is a whole world of smart people out there.”

It’s a radical way of doing business; it’s something that wouldn’t even be possible without the global reach of the Internet. As the Internet is applied as a bonafide social network capable of creating far-reaching communities on the fly, endeavours such as InnoCentive may soon become the norm.