Seeking to expand access to a labor pool beyond its current R&D staff, Eli Lilly created Innocentive, an online marketplace for corporations to post scientific problems for external parties to solve. Successful problem solvers, which include university students, retirees, and scientists from other companies and universities, receive cash bonuses in exchange for the solution and accompanying intellectual property. In this model corporations pay only for winning solutions, not for the labor on unsuccessful efforts.
Scientists from across the world who register with sites like Innocentive sign a confidentiality agreement that provides access to full problem details and requires solvers to transfer IP rights in exchange for the reward payout should their solution win. Rewards range from $2000 for paper-based solutions to up to $100,000 for wet chemistry solutions requiring submission of samples. Companies posting problems price their solutions based on the cost of access to comparable labor, equipment, facilities, projected resource intensity, level of original research required and likelihood of success.
Posted problems that companies wish to out-source fall into two categories. Standard problems with an average ROI of $2 million involve internally solvable but labor-intensive tasks that the companies would prefer to outsource to lower cost external talent. Alternatively, roadblock problems, with an average ROI of $50 million or more, are complex challenges that internal staff may have spent months unsuccessfully trying to solve.
There are also confidential talent pools that companies choose to maintain. A 2019 IRI survey found that 58% of surveyed companies had a network of experts that they utilized as a confidential source of advice. These companies built their group of experts primarily through personal invitations to those experts. Knowledge that those experts existed came from (1) database of former employees, (2) an initial unsolicited contact by the expert, and (3) meeting experts at conferences. These groups of experts were typically not managed as a group, but rather used episodically as individuals or ad hoc working groups on a specific problem. The experts were compensated primarily with direct payments versus other informal forms of recognition or token payments such as dinners.