On the one hand, it definitely generates healthy competition, and companies stand to win out in a big way when service providers and freelancers are openly vying for your dollar. We’ve looked at some examples in the past, like 99 designs, a site where designers enter competitions to win contracts.

InnoCentive has a different take on crowdsourcing.

Their focus is not as narrow or specific as that of 99 designs. Instead, they offer a broad reaching problem-solving approach. InnoCentive lets organizations create “Challenges” that “Problem Solvers” can then submit potential solutions to.

Challenges are organized both by discipline and by pavilion (targeted, sometimes sponsored challenges clustered around general issue sets), and are posted by clients, which are either private companies or not-for-profit organizations. Each Challenge listed features a brief summary, the reward, type, and deadline, and in most cases, the Challenge poster, referred to as Seekers throughout InnoCentive.

The rewards are tempting, and lend a Wild West vibe to the whole enterprise. Freelance web workers and consultants might find the amounts, and the freedom, a refreshing change from the usual CRM and RFP drudgery. It’s definitely a democratized system, especially at this early stage in its development. And with rewards ranging from $5,000 to $1,000,000, there’s money to be made. Partial awards are also available, at the discretion of Seeker organizations.

Downsides? As with all crowdsourcing ventures, the potential exists that you could put in lot of time and get little or no return. But there are apparently winners, and not infrequently either, as seen on their list of awarded challenges.

Awards seem to cluster around the physical and health sciences, but there are contracts available for IT, network, and design professionals as well. If you’re looking for a side project, or you’re confident you can compete internationally, InnoCentive might be the place for you.

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