If you had to design the dullest, most conventional, most uninspired way to encourage creativity and innovation, you'd probably end up with something that looks a lot like the Nobel Prize or the MacArthur Foundation ''genius grant.''

Sure, a Nobel or a MacArthur is lucrative and glistens with a patina of prestige and media hype -- but when you get right down to it, these awards have all the the spirit of an accountant's report. They serve as celebrations of the status quo rather than as challenges to the imagination. They confirm what everybody knows, instead of getting people to think about what they don't know. But the worst thing about them is that, short of pulling names out of a hat, they are the laziest possible way to reward creativity. Simply get a bunch of big names in a room and have them pick winners as they nosh on pa~te' de fois gras. Gosh, it's a tough job but someone has to do it.

We need prizes that are designed with as much ingenuity and creativity as they are intended to reward. Nobels are nifty, but perhaps society could get more bang for the buck if prizes encouraged people to focus on solving specific problems that they otherwise wouldn't consider. It's not that people shouldn't be rewarded for achievement, but that's not the best way to go. Prizes are a wonderful mechanism for capturing attention and imagination; let's treat them that way. Look at the history of technology and you'll find that ingenious prizes evoke innovative solutions.

Everybody remembers how Charles Lindbergh's solo flight across the Atlantic in 1927 absolutely galvanized the world and revolutionized the popular perception of aviation. What people forget is that the 25-year-old Lone Eagle was gunning for the $25,000 Orteig Prize posted by French-born hotelier Raymond Orteig in 1919. Lucky Lindy wasn't just captured by the romance of a New York-Paris crossing; he was also in it for the money. The Spirit of St. Louis may have been piloted by an American hero, but it was fueled by a prize.

This tradition of prizes to push the boundaries of technology goes back hundreds of years. In 1714, a specially established Board of Longitude promised the extraordinary sum of 20,000 pounds to ''such person as shall discern the longitude by sea'' -- absolutely essential for navigation. It took almost 50 years, but a clock accurate enough to solve the problem was built by John Harrison in 1762. That device transformed maritime travel.

Similarly, when the Napoleonic Wars cut off the Continent's supply of raw cotton for textiles, Napoleon promised a huge prize to the inventor who could figure out a way to spin linen into fabrics. In 1810, Frenchman Philippe de Girard perfected the idea of ''wet spinning'' -- soaking the raw flax before it went to the spindles. (Although quite successful, Napoleon reneged on his offer. C'est la vie.)

More recently, prizes have been used to provoke people into thinking about problems that have launched whole new genres of technology. Back in 1960, the brilliant physicist Richard Feynman concluded his American Physical Society Talk, ''There's Plenty of Room at the Bottom,'' discussing ''the problems of manipulating and controlling things on a small scale,'' with not one, but two, prize offers.

The first was $1,000 for building a rotating electronic motor 1/64th-inch cubed; the second was $1,000 for the first person to put a page of a book in a form suitable for reading by an electron microscope. The motor was built that same year; the microtext didn't materialize until 1985. The issue, of course, wasn't the money -- it was getting people to think about building ultra-small things. These challenges helped launch the discipline of ''nanotechnology'' -- the technology of engineering machines and processes billionths of an inch in size.

''Prizes can be very motivating,'' says Paul MacCready, who runs Monrovia, Calif.-based AeroVironment, an environmental and aeronautical consulting firm. ''You put up a small prize and 100 times more money gets invested in trying to win it.''

MacCready should know. On Aug. 23, 1977, his man-powered Gossamer Condor flew into aviation history by traversing a figure-eight course around two pylons half a mile apart to win the Kremer Prize of 50,000 British pounds. Established in 1959 by British industrialist Henry Kremer, the Kremer Prize for Human-Powered Flight had tantalized and infuriated aviation enthusiasts for years as they sought to emulate Icarus without getting burned.

What lured MacCready into spreading his wings? ''I did the project solely for the money,'' he says. ''I had been the guarantor of a $100,000 note that had gone sour. Figuring out the pound-to-dollar exchange rate, I suddenly noticed the connection between a $100,000 prize and a $100,000 debt. If there had not been the prize, I wouldn't have done it.''

MacCready, who is also intimately involved with General Motors Corp.' efforts to develop the electric-powered Impact car, notes that the Kremer Prize was magnificently structured to tease the imagination.

''It's very rare that you can come up with a perfect prize like the Henry Kremer Prize for Human Powered Flight,'' he says. ''It was big; it was absolutely impractical -- no inventors could justify spending their own money. I think it was a hugely creative prize. You find there are very few prizes like that.''

Indeed, pointing to the web of interrelated technologies that the Gossamer Condor helped spawn, MacCready insists that ''if Kremer hadn't come up with his prize in the 1950s, there would not be an Impact today. ... In time, this is going to be a winner.''

''Wherever these kinds of prizes have been proposed, they've almost always made a big difference,'' says Joel Mokyr, a Northwestern University professor whose book, ''The Lever of Riches,'' explores the history of technological creativity. ''This can be a fantastic idea to spur innovation.''

Historically, society relies on the marketplace to generate innovation. Obviously, we don't need prizes to get people to seek out a cure for AIDS or get clever computer software written -- market forces will take care of that. Prizes should be created for problems that the market wouldn't take care of, like human-powered flight or an airborne Atlantic crossing in the 1920s. Today, problems like traffic congestion, the management of waste products and remedial education seemingly lend themselves to creative prize design.

''These impractical prize-driven things have been worthwhile and will become even more so,'' says MacCready. ''It changes people's thinking by giving them a goal. Changing your perspective is much more potent than just an invention.''

What we need are state and local governments -- as well as philanthropists and foundations -- to actually sit down and think of creative prizes to help solve difficult (or interesting) problems. It's not enough to toss prize money at people because you like and admire what they've done -- we need a slew of prizes and awards to get people to do new things. Perhaps we should begin by offering prizes to people who come up with the best ideas for prizes?

Michael Schrage is a columnist for the Los Angeles Times