Soaking up oil spills with human hair, turning clunkers into hybrids and powering Tanzanian villages with rechargeable batteries are just a few of the ideas to come out of Knowledge at Wharton’s second annual Innovation Tournament.

Sponsored jointly by Knowledge at Wharton and Wipro Technologies, a global IT services company, the tournament challenged innovators from around the world to compete for a total of $40,000 in cash prizes. The tournament inspired more than 160 submissions from six continents. The 44 teams that made it to the semifinals were asked to submit video presentations. From those, the top 14 entrants were invited to Philadelphia on April 27 to present their ideas to a panel of judges made up of academics and industry leaders.

“I can’t imagine a more diverse set of opportunities,” Karl Ulrich, Wharton’s vice dean of innovation and one of the judges, told the finalists at the end of the day’s presentations. “We had [entries about] world peace and customer data and carbon credits…. It was incredibly diverse.” (Listen to podcast interviews with the victors in each category as well as the grand prize winner here.)

The competition was inspired by the book, Innovation Tournaments: Creating and Selecting Exceptional Opportunities, co-authored by Ulrich and Wharton operations and information management professor Christian Terwiesch.Similar to contests like American Idol, innovation tournaments create a framework that can help identify the best ideas by whittling down a large pool of diverse notions through several rounds of vetting, the authors say.

“It’s a departure from the previous world view … that innovation is a random outcome, that sparks illuminate and something just happens,” said Terwiesch.

Judges evaluated the entries based on the definition of innovation as “a novel match between a solution and a need that creates value,” according to Terwiesch, who also served as a judge. Teams could submit innovations related either to sustainability or customer-centricity, categories that were further divided into “new” or “implemented” ideas. All four elements of the definition — need, solution, novelty and value — needed to be strong for a team to win.

Solutions didn’t necessarily have to be high tech, and the value of the innovation didn’t have to be monetary, Terwiesch pointed out. For example, in the sustainability category, the “Hair Twister” team from India proposed a mat filled with human hair to clean up oil spills. Unlike some chemical spill mats, hair mats would trap the oil without destroying it, the team said. The oil could then be harvested and the mat re-used again and again. The mats could also be used in farming to reduce the need for chemical fertilizers, since the hair was a natural product. Best of all, the product would cost very little in India because barbershops and temples (which sometimes collect human hair as offerings) would donate the hair for free.

Instead of coming up with a new technology, “the novelty was the match between the solution and the need,” Terwiesch said. “It was so novel and yet so simple.”

A team from the Eastern Caribbean proposed an unusual way for Haiti to rebuild its economy without foreign aid or charitable donations — an innovation with social as well as economic value. Noting that 80% of Haitians are unemployed and that many of the problems plaguing the island nation demand solutions that are labor-intensive, the “Funding for Haiti” group proposed a mandatory national service program that would require every household to work four hours per week on projects such as planting trees, building roads or clearing earthquake rubble. Work projects would be administered by the government or approved charities, which would pay workers with community service receipts that could be freely earned, traded, bought or sold.

“The goal of the program would be to give anyone who wants a job a job,” noted presenter Russell Huntley. By mandating that every household submit receipts and levying fines on those who did not comply, the government would indirectly create a secondary market for work receipts. People employed in the private sector could legally meet their obligations by purchasing others’ receipts, pumping new money into the economy. Haiti’s 3.8 million unemployed could work to earn as many receipts as they wanted, and the economy would slowly grow as receipts were traded and projects reached completion.

“I was intrigued by the idea for stimulating economic activity in Haiti by deploying the large number of unemployed Haitian workers,” Ulrich said. “The key insight was quite interesting — that many of Haiti’s challenges could be addressed by the application of labor and that there was a lot of idle labor.”

In the end, five prizes were awarded: $5,000 to the winners in each of the four categories, and $20,000 as a grand prize. The winners:

Best new customer-centric innovation: L3, for a new video encryption technology.

The need: Today, nearly anyone can make a video and post it on the Internet, but making money from those videos remains difficult. Piracy plagues the $1 trillion video industry. Producers, especially smaller ones, have little means to protect their work and struggle to profit from it.

The solution: The L3 technology allows a video producer to not only encrypt a video, but also include instructions about how it can be viewed and how much it will cost. For example, the producer could charge a single price per view, allow unlimited views within a certain number of days or insert advertisements into the content. Content owners can even modify price by location. To unlock the video and watch it, a customer would either have to pay a fee or watch the video with ads. “Our innovation will allow anyone to publish, distribute and monetize their video from anyone to anyone, from anywhere to anywhere, and most importantly, on any medium,” according to Anil Gupte, who has patented the process and plans to market it through his company, K.E.E.N. “All you have to do is download a piece of software in which you encrypt and package the content.”

Once encrypted, the video can be transferred to any medium without losing its protection. The encryption process is unique because the content protection scheme keeps changing, making it difficult to hack, Gupte said. Fees from videos go directly back to the content producer, minus a small transaction fee to L3. “We’ve solved the major problems of the content owners and created major opportunities for them,” Gupte added. ” Bottom line: We help content owners make more money in less time and thereby create a bigger market.”

Best new sustainability innovation: Welectricity, a social networking site that encourages energy savings.

The need: Household electricity use is a major source of carbon emissions around the world, and most consumers waste a lot of energy. But even though many households could save money by being more energy efficient, utilities often struggle to motivate their customers to scale back. Even well informed customers may not realize how much energy they are wasting because they don’t know what the benchmark should be.

The solution: Bring electricity consumers together on a social networking site that helps them track and compare energy use with friends and neighbors. “Consumers need motivation, not information,” said Herbert Samuel, founder of Welectricity, based in St. Vincent and the Grenadines. Scientists have found four factors that, when combined, provide motivation for behavioral change: feedback, information, goal setting and social proof, or the ability to compare oneself to others. “Welectricity packages these four motivating nudges into a free easy-to-use social network that people all over the world are already using to track, compare and reduce their energy consumption,” Samuel noted.

Users log onto the site or connect from their Facebook accounts, enter basic information about location, house size, appliances and utility bills, and then connect to other people in the area. Users can see how their energy consumption compares to others, and have a forum to discuss the best ways to cut their bills. Ultimately, Samuel hopes to bring utility companies on board to make the process more automatic, and eventually plans to migrate to mobile devices. “The more people use it, the more powerful it becomes,” he said.

Best implemented customer-centric innovation: WiseWindow, for a data service that collects, sorts and displays customized business intelligence in real time.

The need: Companies need quick insights into what customers think and want, but data from traditional market research, surveys and focus groups often comes weeks or months too late. More timely information is often anecdotal and scattered, and cannot be used to make decisions.

The solution: Irvine, Calif.-based WiseWindow has created a data service that culls information from online public comments, sorts it into categories, analyzes the sentiment behind it and delivers it to a company in real time. The product, Mass Opinion Business Intelligence (MOBI), begins with industry-specific sites and moves outward, scanning online articles, conversations, blogs, tweets and other online comments to “learn” what the product is, what type of vocabulary is used to describe it and how people are feeling about it. Then the program sorts the data into categories and relevant topics that a business can use to make decisions. “It turns natural language in conversations on the web into topical dimensions and sentiments,” said Alex Costakis, WiseWindow’s vice president of business development. “The initial seed process may have 12 sites but as the system learns, it [visits] other sites … so the data set literally grows by tens of thousands per week.”

The data is customized based on a client’s industry and product. For example, a client from the auto industry might ask the computer to identify information related to a specific car’s brakes, transmission, color or interior comfort. Clients can view the data in a number of ways — through heat charts, graphs, reports, even a real-time ticker tape — and may use the information to predict customer behavior, adjust manufacturing schedules or even design new products. Companies will likely still employ opinion surveys and traditional market research, Costakis added, but MOBI gives them a tool to see what is happening minute-to-minute. “Because you have this real-time data, you can react much more quickly.”

Best implemented sustainability innovation: Revolo, from KPIT Cummins, for a process that converts old automobiles into hybrids.

The need: About 8% of the world’s carbon emissions come from automobiles. While a number of hybrid products are on the horizon, they do nothing to curb emissions from existing vehicles on the road. In countries like India, most vehicles are 15 to 20 years old, and owners cannot afford to replace them.

The solution: Revolo, a parallel plug-in hybrid solution that converts old gas guzzlers into plug-in parallel hybrid vehicles. A technological innovation by Pune-based IT firm KPIT Cummins, Revolo is a technology that retrofits older cars by adding an electric engine and rechargeable battery pack, cutting emissions and boosting performance. Revolo can be used on cars with valve-regulated lead-acid batteries and low cost motors and does not interfere with the existing engine, according to Rajeev Kulkarni, KPIT’s associate vice president. “It takes from four to six hours to retrofit the car. The beauty of this is that [the vehicle] doesn’t have to be electronic.” That’s good news for countries like India, where cars from the 1970s are still on the road. Revolo comes in a kit that costs about $2,000 in India, far cheaper than a new car. The patented technology can reduce emissions from a vehicle by 30%, improve its fuel efficiency by 35% and reduce the cost of travel by 25%, thus paying for itself in two to three years.

As a judge, Terwiesch said he was highly impressed with the Revolo innovation because it addressed the need to improve emissions of cars already on the road. “Everybody is talking about hybrid vehicles that will be launched in the future, but what do we do with all these cars now?

The GRAND PRIZE: EGG-energy, for their battery-swapping service in Tanzania.

The need: About 500 million people in Africa live without access to electricity. In Tanzania, 90% of the population has no electricity even though 80% live within three miles of the grid. High grid connection fees and lack of infrastructure funding makes access difficult. So to power lights and charge small devices like cell phones, most low-income households in Tanzania rely on kerosene, AA batteries or even car batteries — methods that can be expensive, dangerous and bad for the environment.

The solution: EGG-energy solves Tanzania’s electricity shortage by offering clean, rechargeable batteries that households can rent for an annual subscription fee. The 12-volt batteries, about the size of a brick, are enough to power the typical Tanzanian household for about a week. EGG, which stands for Engineering Global Growth, customizes the electrical system for each customer so the batteries can easily be plugged in and removed without hazard. “We install our customers’ home electrical system, we charge the batteries, we swap batteries and we distribute batteries to swapping stations for more distant customers,” said Rhonda Jordan, the company’s U.S. representative. “We’re like the Netflix of batteries.”

The company also offers complementary appliances such as LED light bulbs, cell phone chargers and radio adapters. Over time, customers save up to 53% in energy costs. So far, the small for-profit company has brought electricity to 2,000 people with a single charging station and eight employees. The goal by 2015: 9,000 customers and $7.2 million in revenues, with sights set on other African markets.