National governments and international donors fund challenge competitions to foster and guide innovation, but there is little evidence on the economic return to such investments in entrepreneurship and R&D. We conduct an ex-ante benefit-cost analysis to project the economic return on the 2023 Fab Bhutan Challenge. On the Challenge benefits side of the analysis, we draw from scientific studies covering five topics: crop yield improvements from climate adaptation (for Challenge 1 in Sarpang, Sarpang), cost and time savings from improved water supply (for Challenge 2 in Pangbisa, Paro), livelihood savings from human-wildlife conflict prevention (Challenge 3 in Lumbukha Chiwong, Punakha), revenue generation from cultural exports (Challenge 4 in Thimphu), and economic returns from special needs education investments (Challenge 5 in Rinchending, Chhukha). On the Challenge cost side, we collected challenge budget data and conducted rapid interviews with participants in the five challenges on expected solution costs. Conservative estimates that account for the probability of some challenge solutions ultimately being non-viable place the economic return to Bhutan between $5 and $12 per dollar spent. We conclude by discussing opportunities and challenges for scaling solutions from the structured innovation challenge based on the global evidence, and implications of the study for Bhutan’s economic aspirations.