Floods to space flights: challenging startups to solve problems

When a flood hits, how can authorities reach the people who desperately need to know?

The Scottish Environment Protection Agency (SEPA) realised it faced exactly this problem. It collects a lot of information about flooding, but much of it is aimed largely at a specialist audience of first responders, while SEPA wasn’t able to get alerts to many smaller communities.

Gary Martin, founder of the small company RiverTrack, thinks he has the answer. Using an array of low-cost sensors positioned over waterways, Martin’s system can broadcast real-time data on water levels to displays positioned in community centres, businesses or even individual homes. Two pilot projects are underway, and Martin hopes to make the devices more widely available from March.

“The goal is to help [communities] take action earlier to improve resilience to flooding events, especially in locations where existing infrastructure is not available,” Martin said.

The project came about thanks to the Scottish Government’s CivTech program. Run by the country’s digital directorate and first devised in 2015, CivTech connects the government to innovative SMEs. Businesses are invited to pitch solutions to advertised “challenges,” such as SEPA’s, and the best are allocated funding and support to develop their ideas.

The process is designed partly to help SMEs learn about working with the public sector, while giving government a low-risk way of working with small, nimble businesses.

CivTech is the latest example of a flourishing trend. Around the world, governments and international organisations are increasingly adopting similar challenge-based models, in which they publicly advertise problems they need to solve and incentivise inventive companies to come up with the answer.

"It's massively accelerating," said Tris Dyson, director of the Challenge Prize Center at Nesta, which works with governments around the world to design prize schemes aimed at finding solutions to tricky challenges.

The European Union is increasingly adopting a challenge model for its Horizon 2020 research program, Dyson said, and the UK, Canadian and US governments all use it to varying extents. Popularity is growing in the Middle East, too. Dyson and his team will generally have as many as 12 or 13 projects running at any time.

The United States’ Small Business Innovation Research (SBIR) project is a particularly well-established, national-level example of the trend. Federal government agencies with more than $100 million dollars to spend on external R&D are required to dedicate 3.2% of their budget to projects funded through SBIR. Current challenges range from designing training simulators for the navy to finding new ways of mapping online activity on a large scale.

Meanwhile, in San Francisco, the city government is recruiting startups to tackle local problems with its Startup In Residence (STIR) program. Different departments work alongside the businesses so they can develop realistic tenders based on the challenges they have identified. Amsterdam, The Hague and British Columbia have developed their own versions thanks to original’s success.

But, cautions Dyson, a challenge-based approach isn’t suitable for every problem. It “more or less it works where... there is a defined problem, where there is a lack of innovation happening, and where you've got a pretty good idea of where innovators could be brought in to address the problem and do better than what is happening," Dyson said.

"That's not, by any stretch of the imagination, any context. if you've got a problem where you know who can solve it, you just pay them to solve it."

And the challenges themselves must be carefully designed to avoid collapsing the whole initiative. While the point of this kind of scheme is to be ambitious and innovative, Dyson said that it’s possible to aim too high.

He gives the example of Google’s Lunar X initiative, which offered a $20 million grand prize back in 2007 for the first privately funded team that could land and pilot a robot spacecraft on the moon to send images back to earth. This month, bosses announced that nobody was going to win the prize and shuttered the scheme. "They'd just been too ambitious with what they thought companies could do and what they thought the investment opportunities were for companies coming in," Dyson said.

"You can also make it too easy in a sense,” Dyson added, “because if the bar's not sufficiently high then what's the point, frankly, you're solving a problem that doesn't need solving."

CivTech is gearing up for another round of bids: its third incarnation, comprising 14 challenges from public sector organisations, will be launched in first quarter of 2018.

Meanwhile, Dyson is confident that governments will continue to use the challenge prize model: “Its time has come,” he said.

(Picture credit: Flikr/Paul Wordingham)