Nordic trip 20120909 v2

IBM University Programs worldwide, accelerating regional development (IBM Upward)

Smarter Planet & Service Science

IBM SSME Centennial Icon of Progress
IBM Smarter Planet

Dr. James (“Jim”) C. Spohrer, spohrer@us.ibm.com
Innovation Champion and Director IBM UPward
(University Programs worldwide, accelerating regional development)

Nordic Trip
Monday-Friday Sept 9-14, 2012

© 2012 IBM Corporation

IBM Almaden Research Center, Silicon Valley/San Jose, CA

2 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Today‟s Talk
 Leading Brands & Innovation
– Public Corporations
– Nations

 Knowledge-Value Economics
– Smarter Planet Nano-Bio-Info-Cogno
– Service Science

 Smarter Regions
– Cities (government)
– Universities (academia)
– Startups (business)
– Foundations (social sector)

 Thank-You‟s


Smarter Regions – Knowledge to Value Faster, Sustainably


What does IBM do?


Most people say, “IBM makes computers”


What IBM really does is help build a Smarter Planet…


United States: Global Brands (4.5/26/30)


Denmark: Global Brands (0.08/0.5/0.8)


Sweden: Global Brands (0.1/1.25/2.2)


Great Challenges Are Opportunities
 Big Four Crises
– Financial
– Healthcare
– Education
– Government


What do universities do?
 Knowledge Transfer (Teaching)
 Knowledge Creation (Research)
 Knowledge Application (Entrepreneurship)
 Knowledge Integration (Reduce Silo Effect)

Harvard – Rated #1 in World (2012) University of Utah – Rated #47
(#1 in Startups AUTM 2010/11)

Smarter Planet = Smarter System of Systems

INSTRUMENTED INTERCONNECTED INTELLIGENT
We now have the ability People, systems and We can respond to changes
to measure, sense and objects can communicate quickly and accurately,
see the exact condition and interact with each and get better results
of practically everything. other in entirely new by predicting and optimizing
ways. for future events.
PRODUCTS IT NETWORKS COMMUNICATIONS

WORKFORCE SUPPLY CHAIN TRANSPORTATION BUILDINGS


IBM Watson


Universities Collaborate with IBM Research to Design
Watson for the Grand Challenge of Jeopardy !

Assisted in the development of the Open Pioneered an online natural language
Advancement of Question-Answering question answering system called START,
Initiative (OAQA) architecture and which provided the ability to answer questions
methodology with high precision using information from
semi-structured and structured information
repositories

 Provided technological advancement
enabling a computing system to remember the Worked on a visualization component to Worked to extend the
full interaction, rather than treating every visually explain to external audiences the capabilities of Watson, with a
question like the first one - simulating a real massively parallel analytics skills it takes for focus on extensive common
dialogue the Watson computing system to break down sense knowledge
a question and formulate a rapid and accurate
response to rival a human brain

Explored advanced machine learning
techniques along with rich text
representations based on syntactic and
semantic structures for the Watson‟s Worked on information Focused on large-scale
optimization retrieval and text search information
technologies extraction, parsing, and
knowledge inference
technologies

http://w3.ibm.com/news/w3news/top_stories/2011/02/chq_watson_wrapup.html


IBM Cognitive Computing & SyNAPSE

SyNAPSE Project AI Neuromorphic Chip

Macaque Long-Distance Brain Network


Evert Gummesson:
Rise of Service
Human Activity Shifts: Sociotechnical System Evolution Relationship Networks

Estimated world (pre-1800) and then U.S. Labor Percentages by Sector
120

100
Services (Info)
80
Services (Other)
60 Industry (Goods)
Agriculture
40
Hunter-Gatherer
20

0
00

50

00

50

00

50
YA
10 YA

20 A
20 YA

Y

18

18

19

19

20

20
00
0

0
0
00

00
00
00
20

Estimations based on Porat, M. (1977) Info Economy: Definitions and Measurement

The Company of The Pursuit of
Strangers : A Natural Organizational
History of Economic Intelligence,
Life by James G. March
by Paul Seabright Exploitation vs exploration

Human Population: Sociotechnical System Evolution
Information Technologies, etc.

Scientific Method, Industrialization
Colonial Expansion & Economics,

Rise of the modern managerial firm
& Politics, Education, Healthcare &

Effects of Agriculture,

Shadows in the The Visible Hand: The
Sun, by Wade Davis Managerial Revolution in
“Ethnosphere. sum total of all
the thoughts, beliefs, myths, and American Business
institutions brought into being by the by Alfred Dupont Chandler
human imagination”


Economic Shift in National Economies
World’s Large Labor Forces US shift to service jobs
A = Agriculture, G = Goods, S = Service
2010
2010

Nation Labor A G S 40yr Service
% WW % % % Growth (A) Agriculture:
Value from
China 25.7 49 22 29 142%
harvesting nature

India 14.4 60 17 23 35%
(G) Goods:
U.S. 5.1 1 23 76 23% Value from
making products
Indonesia 3.5 45 16 39 34%
(S) Service:
Brazil 3.0 20 14 Daryl Pereira/Sunnyvale/IBM@IBMUS,
66 61% Value from
IT augmented workers in smarter systems
Russia 2.4 10 21 69 64% that create benefits for customers
and sustainably improve quality of life.
Japan 2.2 5 28 67 45%

Nigeria 1.6 70 10 20 19%

Bangladesh 2.1 63 11 26 37%

Germany 1.4 3 33 64 42%

NationMaster.com, International Labor Organization
Note: Pakistan, Vietnam, and Mexico now larger LF than Germany


Growth of Service Revenue at IBM
2010 Pretax Income Mix Revenue Growth by Segment
SYSTEMS
(AND FINANCING)
100

Revenue ($B)
SOFTWARE

80 Services
17%
44% 60
40 Software
39% 20 Systems
0
SERVICES
82
88
94
98

10
04
06
07
08
09
20
19
19
19
19
20
20
20
20
20
Year
IBM Annual Reports
What do IBM Service Professionals Do? Run IT & enterprise systems for customers,
help Transform customer processes to best practices, and Innovate with customers.

Priorities: Succeeding through Service Innovation - A Framework for Progress
(http://www.ifm.eng.cam.ac.uk/ssme/)
Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008)

IBM University Programs worldwide, accelerating regional development (IBM Upward)
1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions

Service Service Service Stakeholder The white paper offers
a starting point to -
Innovation Systems Science Priorities
Growth in service Customer-provider To discover the Education
GDP and jobs interactions that underlying
enable value principles of Skills Develop programmes
Service quality cocreation complex service & Mindset & qualifications
& productivity systems
Dynamic Research
Environmental configurations of Systematically Encourage an
Knowledge
friendly & resources: create, scale and interdisciplinary
& Tools
sustainable people, technologi improve systems approach
es, organisations
Urbanisation & and information Foundations laid Business
aging population by existing Employment
Increasing disciplines & Collaboration Develop and improve
Globalisation & scale, complexity service innovation
technology drivers and Progress in
Government roadmaps, leading to a
connectedness of academic studies doubling of investment
Opportunities for service systems and practical tools Policies in service education
businesses, & Investment and research by 2015
governments and B2B, B2C, C2C, B2 Gaps in knowledge
individuals G, G2C, G2G and skills
service networks

Glossary of definitions, history and outlook of service research, global trends, and ongoing debate
© 2012 IBM Corporation

Priorities: Research Framework
for the Science of Service
Pervasive Force: Leveraging Technology to Advance Service

Strategy Development Execution
Priorities Priorities Priorities

Fostering Service Stimulating Effectively Branding
Infusion and Growth Service Innovation and Selling Services

Improving Well-Being Enhancing the Service
Enhancing
through Experience through
Service Design
Transformative Service Cocreation

Optimizing Measuring and
Creating and Maintaining
Service Networks Optimizing the Value of
a Service Culture
and Value Chains Service

Source: Global Survey of Service Research Leaders (Ostrom et al 2010)

Why is it hard to see service systems clearly?

Design/
Cognitive Science Systems
Engineering
“service science is “a service system is a
the transdisciplinary study of human-made system to improve
service systems & provider-customer interactions
value-cocreation” and value-cocreation outcomes,
by dynamically configuring resource
Marketing access via value propositions,
most often studied by many disciplines,
one piece at a time.”

The ABC‟s:
The provider (A)
and a customer (B)
transform a target (C)

Computer Science/
Artificial Intelligence Economics & Law Operations

Our ambition is to reach K-12 students with Service Science & STEM:
“The systems we live in, and the systems we are…”
 Challenge-based Project to Design Improved Service Systems
– K - Transportation & Supply Chain Systems
– 1 - Water & Waste Recycling that focus on
Flow of things
– 2 - Food & Products (Nano)
– 3 - Energy & Electric Grid
– 4 – Information/ICT & Cloud (Info)
Systems
– 5 - Buildings & Construction that focus on
– 6 – Retail & Hospitality/Media & Entertainment (tourism) and
Human Activities
Development
– 7 – Banking & Finance/Business & Consulting
– 8 – Healthcare & Family Life/Home (Bio)
– 9 – Education /Campus & Work Life/Jobs & Entrepreneurship (Cogno)
– 10 – City (Government) Systems
that focus on
– 11 – State/Region (Government) Governing
– 12 – Nation (Government)
– Higher Ed – T-shaped depth added, cross-disciplinary project teams
– Professional Life – Adaptive T-shaped life-long-learning & projects

“Imagine smarter systems, explain why better (service systems & STEM language)”
STE(A)M = Science, Technology, Engineering, (Arts) and Mathematics
See NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635
See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning


“Service is the application of competence [knowledge]
for the benefit of another entity.”
Seeing Our World And Us Vargo,SL & RF Lusch (2004).
Evolving to a new dominant logic for marketing.
Journal of Marketing, 68, 1 – 17.

Building Smarter Cities =
Natural Systems Service Systems Apply Service Systems
Planetary Systems
Knowledge To Realize Benefits
water, electricity, transportation, education, healthcare, etc.

Carbon Capabilities,
Footprint Experience

(Choices) (Choices)

Quality of Life

California Human Development Report 2011:
Measuring quality-of-life….

http://www.measureofamerica.org/docs/APortraitOfCA.pdf

What improves Quality-of-Life? Service System Innovations
* = US Labor % in 2009.

A. Systems that focus on flow of things that humans need (~15%*) 20/10/10
1. Transportation & supply chain
2/7/4
2. Water & waste recycling/Climate & Environment 2/1/1
7/6/1
3. Food & products manufacturing
1/1/0
4. Energy & electricity grid/Clean Tech
5/17/27
5. Information and Communication Technologies (ICT access)
B. Systems that focus on human activity and development (~70%*)
1/0/2
6. Buildings & construction (smart spaces) (5%*)
24/24/1
7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*)
2/20/24
7/10/3
8. Banking & finance/Business & consulting (wealthy) (21%*)
9. Healthcare & family life (healthy) (10%*) 5/2/2

10. Education & work life/Professions & entrepreneurship (wise) (9%*)
3/3/1
C. Systems that focus on human governance - security and opportunity (~15%*) 0/0/0
11. Cities & security for families and professionals (property tax)
1/2/2
12. States/regions & commercial development opportunities/investments (sales tax)
13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) 0/19/0

Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities
“61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”


Sciences underlying HSSE
Service Science
Transdiscipline

Foundations Disciplines Professions

Phenomena: Run
Past Present Future
Value-Cocreation Operators & Maintain

Historical Studies: Future Studies:
Research Anthrop, Economics & Law
Stakeholders & Resources &
Design & Mgmt of Innovation
Transform
Challenges Measures Access Rights Consultants Managers
HumantesSocialScience Arts-Decision Sciences

Customer & Quality People & PA
Concepts & Marketing Psychology, Design
Innovate
Questions Behavioral Sciences Cognitive Sciences Scientists & Designers

Provider & Productivity Technology & OO
Tools & Operations Research & Mgmnt Indust. & Systems Engineering
Work & Job Category
Methods Management Sciences Engineering Sciences Evolution

Authority & Compliance Information & SA
Governance & Policymaking Management of Info Systems
Political Sciences Computer & Info Sciences

Rule Innovations Tech Innovations
Competitors & Sust. Innov. Organizations & LC
Strategy/Game Theory Project Management Contracts
Learning Sciences Organization Science

From: Spohrer, J. & Maglio, P. P. (2009). Service science: Toward a smarter planet.
In W. Karwowski & G. Salvendy (Eds.), Introduction to service engineering. NY: Wiley.

Service Science and Policymaking

 EN: FN(PRW) -> {RE}

– Entities
– Frameworks
– Problems
– Recommendations

From: Spohrer, J, P Piciocchi, CBassano (2012). Three Frameworks for Service Research:
Exploring Multilevel Governance in Nested, Networked Systems. Service Science 4:147-160


Four measures

 Innovativeness

 Equity

 Sustainability

 Resiliency


Service Science: Conceptual Framework
Ecology
(Populations & Diversity)

Entities Interactions Outcomes
(Service Systems, both (Service Networks, (Value Changes, both
Individuals & Institutions) link, nest, merge, divide) beneficial and non-beneficial)

Identity Value Proposition Governance Mechanism Reputation
(Aspirations & Lifecycle/ (Offers & Reconfigurations/ (Rules & Constraints/ (Opportunities & Variety/
History) Incentives, Penalties & Risks) Incentives, Penalties & Risks) History)

Access Rights Measures
(Relationships of Entities) (Rankings of Entities)
lose-win win-win prefer sustainable
lose-lose win-lose non-zero-sum
Resources Stakeholders outcomes,
(Competences, Roles in Processes, (Processes of Valuing, i.e., win-win
Specialized, Integrated/Holistic) Perspectives, Engagement)

 Resources: People, Organizations, Technology, Shared Information
 Resources: Individuals, Institutions, Infrastructure, Information
 Stakeholders: Customers, Providers, Authorities, Competitors
 Measures: Quality, Productivity, Compliance, Sustainable Innovation
 Access Rights: Own, Lease, Shared, Privileged
Spohrer, JC (2011) On looking into Vargo and Lusch's concept of generic actors in markets, or
“It's all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201.


Specialization has benefits

Adam Smith: David Ricardo:
Division of Labor Comparative Advantage


Technology has a cost

 “The burden of knowledge”

Cesar Hidalgo:
Societal Knowledge


~250 years of infrastructure transformations
Installation Crash Deployment
Irruption Frenzy Synergy Maturity
• Formation of Mfg.
The Industrial Panic industry
1 1771 1829
Revolution 1797 • Repeal of Corn Laws
opening trade

Age of Steam • Standards on gauge, time
1829 Panic 1873
2 • Catalog sales companies
and Railways 1847
• Economies of scale

Age of Depression • Urban development
3 Steel, Electricity
1875
1893 • Support for interventionism
1920

and Heavy Engineering
Age of Oil, • Build-out of Interstate
1908
Crash 1974
4 Automobiles 1929 highways
• IMF, World Bank, BIS
and Mass Production
Age of Information Credit Crisis Coming period of
5 1971 2008 Institutional Adjustment
and and Production Capital
Telecommunications
Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages; (Edward Elar Publishers, 2003).


~100 years of US job transformations

Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis

We need better frameworks, theories, and models of…
 Four I‟s Cultural Information
– Infrastructure
(Quality-of-Life Measures)
– Individuals
– Institutions
– Information
Individuals Institutions
 Four Measures (Skills) (Rules, Jobs)
– Innovativeness
– Equity
– Sustainability Societal Infrastructure
– Resiliency (Technologies & Environment)

Smarter Regions
IBM Research, CC&CA & IBM UP Supports IBM Russia & Bauman Moscow State Technical
Brazil with 3 PhD Fellowships for 2012 University launch Smarter Cities Dev’t Education Center
 BMSTU launched the Smarter Cities Education
Center as a strategic initiative w/ IBM to help students
 Flavio Figueiredo from Universidade Federal de Minas and city leaders develop expertise and apply innovative
Gerais studying in filed of content popularity growth on online technologies to create smart solutions to tackle issues
social networks that have high social and economic impact for cities
around the world.
 Ivan Mechado from Universidade Federal da Bahia studying  Aligned with the Russian government's priorities for the
in field of variabilities in product lines and the most suitable
modernization and technological development of urban
testing strategies
centers, the center will support the development of IT
 Gabriel Nazar from Universidade Federal do Rio Grande do skills crucial to Russia's innovation agenda
Sul studying in the filed of cost-effective fault tolerance
techniques for filed programmable gate arrays

IBM India Univ Relations Receives IBM SWG, IBM China UR and Leading Universities
Award from Zinnov Consulting in China Team Up on Joint EMBA Program
 India University Relations was presented w/ the  As part of the Smarter Commerce China
Summit, IBM announced the joint Smarter Marketing
“Ecosystem Enablement for Universities” award from Course Program with Chinese University of Hong
Zinnov Consulting for the 3rd consecutive year Kong and Shanghai Jiaotong University
 The award recognizes IBM’s contribution towards the  The collaboration helps students learn more about the
development of the University R&D Ecosystem through enormous opportunities brought by Smart Commerce
and technology marketing and promote the local talent
depth of research and breadth of reach across Tier 1, 2 education
and 3 universities
 The program will train students & industry leaders with
 Zinnov is a consulting firm providing services in the advanced smarter marketing mindset and solutions and
area of offshore advisory, market research, competitor build ecosystem for Smarter Commerce business impact
analysis, business research, data analytics and HR
consulting to Fortune 1000 companies


Smarter Regions
IBM and University of Mauritius collaborate to IBM University Programs supports IBM’s Delivery
boost computer skills in the Indian Ocean Islands Center at Brno in the Czech Republic
Region off the coast of Africa
 IBM and University of Mauritius struck a academic  IBM’s Delivery Center at Brno employs about 3,000 IT
partnership to provide technology and training resources professionals and supports over 600 clients from
for computer science professionals at the University around the world

 IBM also launched an IBM Africa Technical Institute in  Best practices have been established by local
Mauritius offering education about IBM technologies and University Relations personnel for internship
how these solutions solve some of the challenges facing programs that support IBM’s resourcing needs
businesses and the public sector in Africa.  This local expertise is now planned to be extended and
 IBM technical staff will provide guest lectures to students applied to the resourcing requirements of the Brno
and IBM will also offer research collaboration for UM Delivery Center
researchers

IBM and Stellenbosch University collaborate for IBM UP / SWG supports IBM’s new Delivery Center
computer skills development in South Africa in Costa Rica with faculty training
 IBM’s Delivery Center in Costa Rica opened in May with 1,200
 IBM and Stellenbosch University (SU) have partnered to employees & intends to hire up to 1,000 new IT professionals by
open a Software Center of Excellence to assist students 2014
in building strong SW development skills
 Part of IBM’s agreement includes working with 6 local
 The COE is a first-of-its-kind in South Africa including a universities to help build the future workforce and training them
post-graduate computer laboratory with advanced software on IBM’s Cloud, Cyber Security & various other technologies
(including Rational) to provide a full-fledged software  IBM UR & SWG team members along with NC State University
production environment for students to hone their skills. faculty are conducting curriculum workshops for local faculty in
 The Center seeks to integrate the latest technologies into country to “train the trainors”. IBM is the first company to offer
SU’s curriculum to prepare students for high-value job such a creative approach to helping establish the latest in
opportunities technology skills in Costa Rica


40 IBM GMU External Relations 2012

Cities: land-population-energy-carbon

Carlo Ratti:
Senseable Cities


City challenge: buildings and transportation

Ryan Chin:
Smart Cities


Resiliency: Capability to rebuild (and recycle) rapidly

China Broad Group:
30 Stories in 15 Days


Self-driving cars

Steve Mahan:
Test “Driver”


Manufacturing as a local recycling & assembly service

Ryan Chin:
Urban Mobility


Advanced Product-Service Systems: Cirque Du Soleil
http://www.youtube.com/watch?v=nd5WGLWNllA


University: Four Missions
Nation

 Knowledge State/Province
– 1. Transfer (Teaching) City/Metro
For-profits U-BEE
– 2. Creation (Research)
Job Creator/Sustainer
– 3. Application (Benefits) Cultural & University
Hospital
Medical
Conference College
• Commerce/Entrepreneurship Hotels K-12
Research

• Governance/Policymaking
Worker Family
– 4. Re-Integration (Challenge) Non-profits (professional) (household)

• Innovativeness, Equity
• Sustainability, Resilience

 Nested, Networked Holistic Service Systems
– Flows
Third Mission (Apply to Create Value)
– Development is about U-BEEs =
– Governance University-Based
Entrepreneurial Ecosystems


Nations compete and cooperate: Universities important
% WW GDP and % WW Top-500-Universities (2009 Data)
9

Japan
8

7 y = 0,7489x + 0,3534
R² = 0,719 China
6 Germany
% global GDP

5
France

4 United Kingdom
Italy

3
Russia Brazil Spain
Canada
2 India
Mexico South Korea Australia
Turkey Netherlands
1
Sweden

0
0 1 2 3 4 5 6 7 8 9

% top 500 universities


What are the benefits of more education? Of higher skills?

…But it can be costly, American student loan debt is over $900M


~30 years of skill transformations: depth & breadth

15

10 Expert Thinking

5 Complex Communication

0 Routine Manual

Non-routine Manual
-5

Routine Cognitive
-10
1969 1974 1979 1984 1989 1994 1999

Levy, F, & Murnane, R. J. (2004). The New Division of Labor: How
Computers Are Creating the Next Job Market. Princeton University Press.


T-shaped professionals
depth & breadth

Many cultures
Many disciplines
Many systems
(understanding & communications)

BREADTH

Deep in one discipline

Deep in one system
Deep in one culture
DEPTH

(analytic thinking & problem solving)

51

Systems-Disciplines Framework: Depth & Breadth
systems Systems that focus on flows of things Systems that support people‟s activities Systems that govern
transportation & ICT & retail & healthcare
food & education city state nation
disciplines supply chain water & energy
products & electricity
cloud building & hospitality banking & family
&work secure scale laws
waste construction & finance
behavioral sciences
Customer
stakeholders

e.g., marketing

Provider management sciences
e.g., operations
Observe Stakeholders (As-Is)
political sciences
Authority
e.g., public policy
learning sciences
Competitors e.g., game theory
and strategy
cognitive sciences
People
e.g., psychology
resources

system sciences
Technology
e.g., industrial eng.
information sciences
Observe Resource Access (As-Is)
Information
e.g., computer sci
organization sciences
Organizations
e.g., knowledge mgmt

History social sciences
change

e.g., econ & law
(Data Analytics)
decision sciences
Imagine Possibilities (Has-Been & Might-Become)
Future e.g., stats & design
(Roadmap)
run professions
Run
e.g., knowledge worker
value

Transform
(Copy)
transform professions
e.g., consultant
Realize Value (To-Be)
Innovate innovate professions
(Invent)
e.g., entrepreneur


Working with universities-cities worldwide
A long term investments to develop talent & skills
Government Global Placements & Collaboration with
Partnerships Mentoring Universities
Transferring knowledge and IBM works with 5,000 universities
By helping governments to and 10,000 faculties around the
establish new national expertise to the growth markets is
critical. One of the ways we do this globe. We have joint initiatives
research facilities, we are and investments with universities
helping to create new is to move experts into the market to
in
industries, helping to develop coach and train local teams. Vietnam, Malaysia, India, Russia,
long terms skills curriculums Brazil, Bulgaria, Egypt, China and
like SSME. Africa to encourage the training of
skills required.

53 IBM GMU External Relations 2012

We Are All Part Of Nested, Networked Service Systems

Matryoska dolls:
Origin Japanese


I am nested in at least 10 systems

Level AKA ~No. People ~No. Entities Example
0. Individual Person 1 10,000,000,000 Jim
1. Family Household 10 1,000,000,000 Spohrer’s
2.Neighborhood Street 100 100,000,000 Kensington
3. Community Block 1000 10,000,000 Bird Land
4. Urban-Zone District 10,000 1,000,000 SC Unified
5. Urban-Center City 100,0000 100,000 Santa Clara
6.Metro-Region County 1,000,000 10,000 SC County
7. State Province 10,000,000 1,000 CA
8. Nation Country 100,000,000 100 USA
9. Continent Union 1,000,000,000 10 NAFTA
10. Planet World 10,000,000,000 1 UN


A Framework for Global Civil Society

 Daniel Patrick Moynihan said nearly 50 years ago: "If you want to
build a world class city, build a great university and wait 200
years." His insight is true today – except yesterday's 200 years
has become twenty. More than ever, universities will generate and
sustain the world‟s idea capitals and, as vital
creators, incubators, connectors, and channels of thought and
understanding, they will provide a framework for global civil
society.
– John Sexton, President NYU


AHFE-HSSE 2012: Thank-you!


~14B Evolution of Natural Systems & Service Systems ~10K
Big Bang Cities
(Natural Unraveling the mystery of evolving hierarchical-complexity in new populations… (Human-Made
Time
World) To discover the world‟s architectures and mechanisms for computing non-zero-sum World)

writing
(symbols and scribes,
stored memory
and knowledge)

written laws
(governance and

ECOLOGY
stored control)

sun (energy) money
earth (governed
(molecules & transportable value
stored energy) stored value,
“economic energy”)
bacteria
(single-cell life)

bees (social
sponges transistor
division-of-labor)
(multi-cell life) (routine
cognitive work) universities
(knowledge workers
clams (neurons) printing press (books
trilobites (brains) 200M 60 steam engine (work)

Co-Evolution (Michael Gallis & Associates)

http://www.scribd.com/doc/46259459/Co-Evolution


Visit IBM Almaden Research Center, San Jose, CA

 Upcoming Conferences
– July 2012
• ISSS San Jose
• HSSE San Francisco

 More Information
– Blog
• www.service-science.info
– Twitter
• @JimSpohrer
– Presentations
• www.slideshare.net/spohrer
– Email
• spohrer@us.ibm.com


Thank-You! Questions?

“Instrumented, Interconnected, Intelligent – Let‟s build a Smarter Planet.” – IBM
“If we are going to build a smarter planet, let‟s start by building smarter cities” – CityForward.org
“Universities are major employers in cities and key to urban sustainability.” – Coalition of USU
“Cities learning from cities learning from cities.” – Fundacion Metropoli
“The future is already here… It is just not evenly distributed.” – Gibson
“The best way to predict the future is to create it/invent it.” – Moliere/Kay
“Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer
“Today‟s problems may come from yesterday‟s solutions.” – Senge
“History is a race between education and catastrophe.” – H.G. Wells
“The future is born in universities.” – Kurilov
“Think global, act local.” – Geddes

Dr. James (“Jim”) C. Spohrer
Innovation Champion &
Director, IBM University Programs & open worldwide entrepreneurship research (IBM UPower) WW
spohrer@us.ibm.com


IBM’s Leadership Change

IBM has 426,000
employees worldwide
2011 Financials
22% of IBM’s revenue
 Revenue - $ 106.9B
in Growth Market
countries; growing at  Net Income - $ 15.9B
11% in 2011  EPS - $ 13.44
 Net Cash - $16.6B More than 40% of IBM’s
workforce conducts business
away from an office

55% of IBM’s Workforce
IBM operates in 170 is New to the company in
countries around the globe the last 5 years
Number 1 in patent
generation for 19
100 Years of Business consecutive years ;
& Innovation in 2011 6,180 US patents
awarded in 2011 The Smartest Machine On Earth
9 time winner of the 5 Nobel
President’s National Laureates
Medal of Technology
& Innovation - latest “Let’s Build a Smarter
award for Blue Gene Planet"
Supercomputer


Service systems entities learn to apply knowledge

Learning
To Apply Knowledge

Do It Invent It
Exploitation Exploration

Run Transform Innovate

Operations L Internal Incremental

Maintenance
Copy It External Radical

Insurance Interaction Super-Radical

March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.
Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY.


Service Science: Conceptual Framework
Ecology
(Populations & Diversity)

Entities Interactions Outcomes
(Service Systems, both (Service Networks, (Value Changes, both
Individuals & Institutions) link, nest, merge, divide) beneficial and non-beneficial)

Identity Value Proposition Governance Mechanism Reputation
(Aspirations & Lifecycle/ (Offers & Reconfigurations/ (Rules & Constraints/ (Opportunities & Variety/
History) Incentives, Penalties & Risks) Incentives, Penalties & Risks) History)

Access Rights Measures
(Relationships of Entities) (Rankings of Entities)
lose-win win-win prefer sustainable
lose-lose win-lose non-zero-sum
Resources Stakeholders outcomes,
(Competences, Roles in Processes, (Processes of Valuing, i.e., win-win
Specialized, Integrated/Holistic) Perspectives, Engagement)

 Resources: Individuals, Institutions, Infrastructure, Information
 Resources: People, Organizations, Technology, Information
 Stakeholders: Customers, Providers, Authorities, Competitors
 Measures: Quality, Productivity, Compliance, Sustainable Innovation
 Access Rights: Own, Lease, Shared, Privileged
Spohrer, JC (2011) On looking into Vargo and Lusch's concept of generic actors in markets, or
“It's all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201.


Service Systems Thinking: ABC‟s Example Provider: College (A)
A B Example Target: Student (C)
Discuss: Who is the Customer (B)?
A. Service Provider
Forms of
Service Relationship
B. Service Customer - Student? They benefit…
• Individual
(A & B co-create value)
• Individual - Parents? They often pay…
• Institution • Institution
• Public or Private
- Future Employers? They benefit…
• Public or Private
- Professional Associations?
Forms of
Service Interventions
- Government, Society?
(A on C, B on C)

Forms of
Responsibility Relationship
(A on C)
C Forms of
Ownership Relationship
(B on C)

C. Service Target: The reality to be
transformed or operated on by A,
for the sake of B

• Individuals or people, dimensions of
• Institutions or business and societal organizations,
organizational (role configuration) dimensions of
• Infrastructure/Product/Technology/Environment,
“Service is the application of
physical dimensions of
• Information or Knowledge, symbolic dimensions
competence for the benefit
of another entity.”
Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new
toward a science of service systems. Computer, 40, 71-77. dominant logic for marketing. Journal of Marketing, 68, 1 – 17.
From… Gadrey (2002), Pine & Gilmore (1998), Hill (1977)


Service system entities configure four types of resources
Rights No-Rights

 First foundational premise of 2. Technology/
1. People/
service science: Physical Environment
Individuals
Infrastructure
– Service system entities
dynamically configure
four types of resources
4. Shared
– Resources are the building
blocks of entity
Not-Physical 3. Organizations/ Information/
Institutions Symbolic
architectures
Knowledge
 Named resources are:
– Physical or Formal service systems can contract to configure resources/apply competence
– Not-Physical Informal service systems can promise to configure resources/apply competence
– Physicist resolve disputes
Trends & Countertrends (Balance Chaos & Order):
 Named resources have: (Promise) Informal <> Formal (Contract)
– Rights or
(Relationships & Attention) Social <> Economic (Money & Capacity)
– No Rights
(Power) Political <> Legal (Rules)
– Judges resolve disputes
(Evolved) Natural <> Artificial (Designed)
(Creativity) Cognitive Labor <> Information Technology (Routine)
(Dance) Physical Labor <> Mechanical Technology (Routine)
Spohrer, J & Maglio, P. P. (2009) (Relationships) Social Labor <> Transaction Processing (Routine)
Service Science: Toward a Smarter Planet. (Atoms) Transportation <> Communication (Bits)
In Introduction to Service Engineering. (Tacit) Qualitative <> Quantitative (Explicit)
Editors Karwowski & Salvendy. Wiley. Hoboken, NJ.. (Secret) Private <> Public (Shared)
(Anxiety-Risk) Challenge <> Routine (Boredom-Certainty)
(Mystery) Unknown <> Known (Justified True Belief)

Service system entities calculate value from multiple stakeholder
perspectives
Value propositions coordinate & motivate resource access
 Second foundational premise of
service science Stakeholder Measure Pricing Basic Value
Perspective Impacted Decision Questions Proposition
– Service system entities calculate (the players) Reasoning
value from multiple stakeholder
perspectives

– Value propositions are the building 1.Customer Quality Value Should we? Model of customer: Do
blocks of service networks (Revenue) Based (offer it) customers want it? Is there
a market? How large?
Growth rate?
 A value propositions can be viewed as
a request from one service system to
another to run an algorithm (the value
2.Provider Productivity Cost Can we? Model of self: Does it play
proposition) from the perspectives of (Profit, Missio Plus to our strengths? Can we
(deliver it)
multiple stakeholders according to n, deliver it profitably to
culturally determined value principles. Continuous customers? Can we
Improvement, continue to improve?
 The four primary stakeholder Sustainability)
perspectives are: customer, provider, 3.Authority Compliance Regulated May we? Model of authority: Is it
authority, and competitor (Taxes and (offer and legal? Does it compromise
Fines, Quality our integrity in any way?
– Citizens: special customers deliver it)
of Life) Does it create a moral
– Entrepreneurs: special providers hazard?
– Parents: special authority
– Criminals: special competitors 4.Competitor Sustainable Strategic Will we? Model of competitor: Does
Innovation (invest to it put us ahead? Can we
(Substitute)
(Market make it so) stay ahead? Does it
share) differentiate us from the
competition?

Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In
Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..


Service system entities reconfigure access rights to resources by
mutually agreed to value propositions

 Third foundational premise of service
Competitor Provider Customer Authority
science
S P C A
– Service system entities reconfigure
access rights to resources by mutually
agreed to value propositions (substitute)
OO OO
– Access rights are the building blocks of LC LC
the service ecology (culture and
information) SA SA
 Access rights PA PA
value-proposition
– Access to resources that are
change-experience
owned outright (i.e., property)
dynamic-configurations
– Access to resource that are

time
leased/contracted for (i.e., rental
car, home ownership via
mortgage, insurance policies, etc.)
– Shared access (i.e., roads, web
service = value-cocreation
information, air, etc.) B2B
B2C
– Privileged access (i.e., personal
thoughts, inalienable kinship B2G
relationships, etc.) G2C
provider resources G2B customer resources
Owned Outright G2G Owned Outright
C2C
Leased/Contract Leased/Contract
Spohrer, J & Maglio, P. P. (2009) C2B
Service Science: Toward a Smarter Planet. Shared Access C2G Shared Access
In Introduction to Service Engineering. Privileged Access *** Privileged Access
Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..


Service system entities interact to create ten types of outcomes
ISPAR descriptive model

 Four possible outcomes
from a two player game

lose-win win-win
Win

(coercion) (value-cocreation)
Provider
Lose

lose-lose win-lose
(co-destruction) (loss-lead)

Lose Win
Customer
 ISPAR generalizes to ten
possible outcomes
– win-win: 1,2,3
– lose-lose: 5,6, 7, maybe 4,8,10
– lose-win: 9, maybe 8, 10
– win-lose: maybe 4

Maglio PP, SL Vargo, N Caswell, J Spohrer: (2009) The service system is the basic abstraction of service science. Inf. Syst. E-Business Management 7(4): 395-406 (2009)


Service system entities learn to systematically exploit technology:
Technology can perform routine manual, cognitive, transactional work

“Try to Learning Systems
(“Choice & Change”) “Double
operate
monetize,
inside
internal win
the Exploitation Exploration
(James March) (James March) and „sell‟ to
comfort
external”
zone”
Run/Practice-Reduce Transform/Follow Innovate/Lead
(IBM) (IBM) (IBM)

Operations Costs L Internal Incremental
“To be
the best,
Maintenance Costs learn from External Radical
the rest”
Incidence Planning &
Interactions Super-Radical
Response Costs (Insure)

March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.
Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY.


Service system entities are physical-symbol systems

 Service is value
cocreation.
 Service system entities
reason about value.
 Value cocreation is a
kind of joint activity.
 Joint activity depends
on communication and
grounding.
 Reasoning about value
and communication are
(often) effective
symbolic processes.

Newell, A (1980) Physical symbol systems, Cognitive Science, 4, 135-183.
Newell, A & HA Simon(1976). Computer science as empirical inquiry: symbols and search. Communications of the ACM, 19, 113-126.


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