Going for Gold

Innovation prizes were regularly sponsored by the Franklin Institute and other mechanics’ institutes throughout the United States. The analysis shows that administered innovation systems in the United States demonstrated the same endemic characteristics as their European counterparts. Unlike the more democratic nature of patent markets, the judges, participants, and winners belonged to wealthier and more privileged classes. Prize systems failed to induce the desired outcomes, and the allocation of awards was typically idiosyncratic and unrelated to characteristics of the invention. Their administration was rife with poor governance, and the administrative costs often exceeded the amounts being disbursed to inventors. Rather than providing effective inducements for novel inventive activity, prizes primarily served as marketing and publicity mechanisms for firms that wished to commercialize already existing innovations.