Prime Minister David Cameron has announced a £1 million ($1.95 million) prize for anyone who can "identify and solve the biggest problem of our time".
Speaking at the G8 Innovation Conference in London today, Cameron highlighted the importance of continuing to invest in innovation during tough economic times.
"What the world needs most of all right now is growth, and that growth in my view is going to come from small businesses and start-up businesses, more than from the big existing traditional businesses, so the whole agenda of innovation and entrepreneurship is absolutely vital," he said.
The new 'grand innovation challenge' is inspired by the Longitude Prize set by the British government in 1714, which promised £20,000 to the person who mastered the challenge of calculating longitude at sea to help maritime navigation.
The problem itself has not been defined yet, but Cameron said that he wanted to "get the nation engaged on what the biggest problems are in science and in our lives that we need to crack". British cosmologist and astrophysicist Martin Rees will run the exercise for identifying the challenge.
"There are so many problems in our world that need that amazing solutions - whether it is a cure for dementia, solving the problem of diabetes, having a flight from Britain to New York that's carbon-free," said Cameron.
"Let's challenge the public and challenge the scientist for which is the great problem we want to crack. I think it's an exciting idea and another example of Britain leading in innovation."
The £1 million will come from the Technology Strategy Board's budget. Universities and Science Minister David Willetts added that when people have identified the challenge, other sponsors might come on board.
"The Prime Minister has made it clear that innovation is at the heart of economic growth. This competition aims to get the whole country thinking about how to tackle major challenges through innovation," said David Bott, Director of Innovation Programmes at the Technology Strategy Board.
"That is why we are very happy to provide the initial prize money for this new venture. We hope it will galvanise the best minds in our country to think about how we can really transform our economy - and our lives - for the better."
The competition is open to everyone from individual citizens to academics and businesses.
Also at the G8 Innovation conference, the government unveiled its Information Economy Strategy, which aims to generate fresh growth opportunities for some of the UK's most innovative technology businesses.