Problems within many business organizations are typically solved in-house, or by purchasing outside solutions. Left on the shelf are conundrums for which answers do not exist yet, and commissioning the problem-solving work may be too expensive.

What if companies had access to the ideas and expertise of thousands of innovative individuals around the world?

This is the driving force behind InnoCentive, a web-based, problem-solving company founded in 2001 that has brought to light answers to questions by putting them in front of professionals across industries and disciplines.

Companies post challenges on the Waltham, Massachusetts-based InnoCentive’s website, and offer a reward. The registered problem solvers number more than 165,000 professionals, who can view the challenge and work in project rooms to develop solutions. Sixty percent of the solvers have advanced degrees, and a large number are Russian.

Site users include commercial, government and non-profit entities, such as SAP, Procter & Gamble, Avery Dennison, Pendulum, Eli Lilly and Co., Janssen, Solvay and The Rockefeller Foundation.

In the energy industry, Paradigm Technologies Inc., which provides E&P enterprise software globally, has posted a challenge to develop an optimum, scaleable software licensing and pricing model that balances customer satisfaction, high-performance computing growth, and revenue generation.

While a reward-winning solution had not been posted yet at press time, the challenge had several hundred breakout rooms open.

“The way we run our challenges, it’s not first to the finish line,” says Dwayne Spradlin, InnoCentive president and chief executive officer. “The company doesn’t pay a reward unless it finds a winning solution. The economics are interesting; the solution-seekers pay a reasonably small fee to post a challenge and the award is only paid to the solver—or solvers—whose solution is chosen.

“The dollars are paid out only when they get the winning solution.”

One InnoCentive problem-solver became $20,000 wealthier in 2007. John Davis, a chemical researcher at Illinois State University, offered the best solution to a challenge posted by the Oil Spill Recovery Institute (OSRI) dealing with oil-spill clean-up from the 1989 Exxon Valdez spill offshore Alaska. OSRI needed a method for separating oil from water on oil-recovery barges after the mixture had frozen into a viscous mass.

Having no background in the oil industry, Davis applied his experience with working with a construction tool that is commonly used in the cement industry. The tool uses vibration to keep cement in liquid form during mass pours. Davis realized that, by attaching a long pole and inserting the tool into the oil-recovery barges, it would keep the oil from freezing into a viscous state and allow the oil to be easily pumped from the barge.

Scott Pegau, OSRI research program manager, says the organization and others in Alaska had been attempting to solve many of these issues internally, but had not found a solution.

“Within the oil-spill response industry, there are a limited number of people to work on these problems,” Pegau says. “I’m fascinated to see that our winning solution uses related technology found in the cement industry. We would never have found this through our regular process.”

Davis developed the solution within hours of noticing the challenge at InnoCentive’s website. He recalled an experience in which he used the cement vibrator while helping with a friend’s cement business, and he determined ways to adapt the tool to the harsh environment of Alaska.

“It was a kind of ‘Eureka’ moment. I thought, ‘Why haven’t they thought of this already?’” Davis says.

The solution is the first of what OSRI hopes will be many breakthroughs in oil-spill clean-up via the InnoCentive service, Pegau says.

Originally formed with a focus on live sciences and chemicals, the website has not expanded to the E&P community much outside of the Paradigm posting. “We’ve always had an active solver community focused in polymers and petrochemicals, but not in upstream oil and gas,” says InnoCentive’s Spradlin.

With the energy industry in a state of flux, he expects the industry to seek faster solutions to existing or predictable problems.

“With the current economy, the state of resources globally and the price of oil, a lot of the focus is there to get a lot more serious about change. Our hope is that, as we get a meaningful footprint in the energy space, we can partner with a lot of these organizations to accelerate change,” Spradlin says.

The number of posted challenges has grown from 446 in 2007 to 596 this past December. In November, a record month for InnoCentive, a new challenge went live each day.

“As we go into first-quarter 2009, we think companies will focus on these concerns: getting products to market faster than ever, better solutions in a difficult economy and becoming more cost effective,” Spradlin says.

The website has a clean-technology and renewable-energy pavilion, where an award was recently given (for $30,000) for a model for a more energy-efficient air-conditioning unit. Another challenge involves an idea for increasing public transportation use to reduce greenhouse-gas emissions in Chicago. The solver with the best idea will receive $5,000.

“All around the world, engineers, research scientists and others are working together individually or as companies trying to solve this and other problems,” Spradlin says.

In his spare time, Illinois State’s Davis is working on solutions to two new InnoCentive challenges, including developing a rainwater-storage system for Third World countries that can hold 500 liters and cost less than $20 per unit.

Meanwhile, the site’s problem-solving community is tackling some of the most persistent conundrums: The Global Alliance for Tuberculosis has posted a $40,000 challenge for a new drug candidate. And a $1-million reward will go to the individual who can present the cure for Lou Gehrig’s Disease (ALS).

Another reward promises $40,000 to the individual who invents a tanning pill that replaces the need for sunbathing, thus reducing skin-cancer risk.

To date more than $3 million has been awarded to solvers and 250 challenges have been answered.

Spradlin says, “We have case after case of organizations or systems that simply had gone to the limits of their existing innovations and have now introduced entirely new and exciting ideas into the mix by asking the rest of the world to participate.”