UCL Institute for Innovation and Public Purpose


The entrepreneurial (welfare) state? Tackling social issues through challenge prizes

IIPP Working Paper 2020-02: The Entrepreneurial (Welfare) State?

1 June 2020

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UCL Institute for Innovation and Public Purpose (IIPP) Working Paper Series: IIPP WP 2020-02


  • Ville Takala | Senior Research Fellow, UCL Institute for Innovation and Public Purpose
  • Emma Nordbäck | Assistant Professor, Hanken School of Economics, Finland
  • Tuukka Toivonen | Honorary Senior Lecturer, UCL Department of Science, Technology, Engineering and Public Policy Course Leader, Central Saint Martins, University of the Arts London


Takala, V., Nordbäck, E. and Toivonen, T. (2020). The entrepreneurial (welfare) state? Tackling social issues through challenge prizes. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP 2020-02). Available at: https://www.ucl.ac.uk/bartlett/publicpurpose/wp2020-02


Much of the debate surrounding mission-oriented innovation and associated policy instruments has hitherto remained more conceptual rather than empirical. Thus, in this paper we examine one relevant policy instrument – the challenge prize – through an empirical lens. Based on a longitudinal qualitative study of the challenge prize “Solution 100”, organised by the Finnish Innovation Fund, Sitra, in 2016-2017, we examine whether challenge prizes can effectively foster the dynamic capabilities needed, both within the private and the public sector, for states to become entrepreneurial. Specifically, we focus on the question of how participants with different professional backgrounds – holding contrasting cognitive models in relation to social problems and innovation – engage with the particular logic of a challenge prize. Our findings indicate that although prizes can indeed provide the aforementioned function, future prize organisers must reflect deeply on the types of cultures and mentalities they wish to promote through the design of their prizes. Far from being simple tools to spur innovations, prizes in fact involve complex issues of prize governance, greatly influencing their outcomes. The broader aim of our paper is to situate mission-oriented innovation and challenge prizes within ongoing debates about welfare state reform.