Ten reasons 20130621 v3

Ten Reasons Service Science
Matters More Than Ever
Jim Spohrer
Director IBM University Programs
June 21, 2013

IBM University Programs
Congratulations KSRI!
6/21/2013
© IBM 2013 IBM University Programs worldwide
accelerating regional development (IBM UPward)
2

EDUCAUSE Review Article
Spohrer, J., Fodell, D., & Murphy, W. (2012). Ten
Reasons Service Science Matters to Universities.
EDUCAUSE Review, 47(6), 52-54.

Goods-Dominant Logic (GDL):
Sector Growth Argument

Service-Dominant Logic (SDL):
Actor Competitiveness Argument
• Vargo, S. L., & Akaka, M. A. (2009). Service-dominant logic
as a foundation for service science: clarifications. Service
Science, 1(1), 32-41.

A2A Interactions:
Competing for Collaborators
• Collaborators: Customers, Suppliers, Employees, Partners, etc.
• FP4 Operant Resources & FP9 Resource Integration
– Operant resources are the fundamental source of competitive advantage
– All social and economic actors are resource integrators
• From an upcoming Vargo & Lusch Publication:
– “Not only do business enterprises and households engage in resource
integration, transformation, and exchange of service, but government
agencies, schools, and a host of other nonprofit organizations do so as well.”
– “As a broad, abstract perspective, businesses, households, and other
organizations engage in the acquisition, integration, and transformation of
resources to create new resources and then use these new resources in
exchange with other actors to co-create value. This perspective begins to
direct attention to viewing businesses, households, and other
organizations, including nonprofits and governments, as essentially and
abstractly identical. This insight led us to define exchange and exchange
systems in terms of actor-to-actor (A2A) interactions.”

Today’s Talk
• Definitions
• Sciences & Applied Arts
• Ten Reasons
• Progress To Date
• What’s Next?
• IBM Example
• Future Trends

Definitions
• Service
– The application of knowledge for mutual benefits
– Value co-creation phenomena between entities
• Service Innovations
– Scale the benefits of new knowledge globally, rapidly, profitably
– Platforms can help, e.g., smart phones, franchises, etc.
– Growth businesses seek to scale benefits of knowledge
• Service System Entities
– Business and societal systems with capabilities, rights, and
responsibilities
– Dynamic configurations of
people, technology, organizations, and information linked by
value propositions

Definitions
• Service Science
– Study of service and service systems
– Measures:
Quality, Productivity, Compliance, Innovativeness, Sust
ainability, Resilience, Competitive Parity
• SSME
– Service Science, Management, and Engineering
• SSME+DAPP
– SSME + Design Arts and Public Policy
– “Big Tent”

Sciences & Applied Arts
• All sciences study systems
– Physics, Chemistry, Biology, Information and
Computer Science, Service Science, etc.
– Evolution of entities, interactions, outcomes
– Discover abstract universal patterns
• All applied arts change systems
– Management, Engineering, Design Arts, Public
Policy seek to apply rigorous scientific knowledge
to create better worlds to inhabit

Definitions
• Transdiscipline
– Borrows from disciplines without replacing them
• T-Shaped Service Innovation Professionals
– Depth and Breadth: Disciplines, Sectors, Cultures
– Adaptive Capacity and Boundary Spanners
• ISSIP
– International Society for Service Innovation
Professionals
– Pronounced I-ZIP
– An umbrella professional association

What is a T-shaped Professional?
Many disciplines
Many sectors
Many regions/cultures
(understanding & communications)
Deepinonesector
Deepinoneregion/culture
Deepinonediscipline
6/21/2013
12

www.ISSIP.org
• Pronounced I-ZIP
• International Society of
Service Innovation
Professionals
• Service is the application
of knowledge for mutual
benefitis (value co-
creation phenomena)
• Service innovations scale
the benefits of new
knowledge globally and
rapidly.
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13

Ten Competitiveness Reasons:
Regional Skills & Infrastructure
Skill Need Service Science Topics
Big Data Instrumenting Service Systems
Cloud Computing Interconnecting Service Systems
Cognitive Computing Intelligent Service Systems
Platforms Scaling Service Systems & Faster Revenue Growth
Social & Mobile Instrumented People as Service Systems (Open Data)
Cybersecurity Security of Private Information in Service System
Business Models Digital Age Business Models for Service Systems
Sustainability Cities as Higher Quality-of-Life Service Systems
Entrepreneurism Universities as More Competitive Service Systems
Regional Flows Circular Economy of Regional Service Systems

Progress Indicators
• Other Sciences
– Computer Science (30 years)
– Data Science (Hadoop)
– Urban Science (Scale Law)
– Service Science (S-D Logic)
• Service Science
– Courses & Degree Programs (>500)
– Conferences (>25)
– Journals, Articles, Papers, Books & Citations (>10,000)
– Professional Associations (>25)
– Government & Business Investment (>$5B)

Information & Computer Science
• “The single strongest impulse for introducing
computers on campuses in the mid-1950s did
not come from the schools themselves or
from any federal agency, but instead from
IBM.”

Data Science
• “Data science incorporates varying elements
and builds on techniques and theories from
many fields… with the goal of extracting
meaning from data and creating data
products.”

By 2020, 35 Zettabytes per year
• What’s big today will look small in a decade
Google processes
> 24 Petabytes of data
in a single day
Facebook processes
10 Terabytes of data every
day
The Hadron Collider at CERN
generates 40 Terabytes
of data / sec
For every session, NY Stock
Exchange captures 1 Terabyte
of trade information
Twitter processes
7 Terabytes of data every day
250,000,000 tweets
2 Billion Internet users in 2011
By 2013, annual internet traffic
will reach 667 Exabytes

Urban Science
• Urban science is an interdisciplinary field that
studies diverse urban issues and problems

The Well-Read Service Scientist
• http://service-science.info/archives/2708

What’s Next?
• Better Open Data Sets & Simulation Tools
• Better Textbooks & Education Materials
• Better Frameworks & Entity Architectures
• Better Theories & Models
• New Discoveries
– Scale Laws & “Periodic Table” of Entities
– Comparative Parity & Learning Curves
– Innovation Methods & Investment Strategies

Service Science Article
Spohrer, J., Piciocchi, P., & Bassano, C. (2012). Three frameworks for service research: exploring
multilevel governance in nested, networked systems. Service Science, 4(2), 147-160.
If some entity architectures (EN and frameworks (FN) are better than others, then professionals working
to solve real-world problems (PRW) might benefit, and generate better sets of recommendations (RE).

Service Science
• The transdisciplinary study of service, the
application of knowledge for mutual benefits
(value co-creation phenomena), in an evolving
ecology of interacting many-to-
many, nested, networked viable service
system entities.

Observations
• Every nation/state/city-university I talk to:
– We need help creating high skill, high pay jobs of the
future.
– We need help keeping our top talent from moving away
after graduation from university
• Every business I talk to:
– We need help scaling the benefits of new knowledge and
innovation globally, rapidly, profitably
– We need help making our employees and ecosystem more
innovative
– We would rather hire people with some entrepreneurial
experience (even if failed) than recent graduates, with no
entrepreneurial experience.

Holistic Service Systems (HSS)
6/21/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
25
http://www.service-science.info/archives/1056
Nation
State/Province
City/Region
University
College
K-12
Cultural &
Conference
Hotels
Hospital
Medical
Research
Worker
(professional)
Family
(household)
For-profits
Non-profits
U-BEE
Job Creator/Sustainer
U-BEEs = University-Based Entrepreneurial Ecosystems
“The future is already
here (at universities),
it is just not evenly
distributed.”
“The best way to
predict the future
is to (inspire the next
generation of students
to) build it better.”
“Multilevel nested,
networked
holistic service
systems (HSS)
that provision
whole service (WS) to
the people inside them.
WS includes
flows (transportation,
water, food, energy, com
development (buildings,
retail ,finance, health,
education),
and governance (city,
state, nation). ”

“Order of Magnitude Observation”:
Unique Time in Human History
Type:
Classes
Order Tokens:
Instances
Individ-
uals
Insti-
tutions
Infra-
structure
Inform-
ation
Planet 10**0 1 10B Forbes 50
Continent 10**1 10 1B F 1000
Nation 10**2 100 100M F 2000 PRISM
State 10**3 1000 10M utilities nuclear
Metro 10**4 10,000 1M uni’s
City 10**5 100,000 100,000 colleges gas
District 10**6 1M 10,000 hospitals
Community 10**7 10M 1000 schools
Street 10**8 100M 100 parks
Family 10**9 1B 10 solar HAT
Person 10**10 10B 1 Soc. Med.

GDL & SDL
GDL Reasons: Sector Growth Argument SDL Reasons: Actor Competitiveness
Argument
Service Economy Planet-wide Actors
Servitization/XaaS (Everything asa
Service)
Continental Unions as Actors (HSS)
Globalization Nations as Actors (HSS)
Demographics States as Actors (HSS)
Urbanization Metros/Counties as Actors (HSS)
Social Services Cities as Actors (HSS)
Financial Services Districts as Actors (HSS)
IT Platforms & Services Communities as Actors (HSS)
B2B Services Streets/Apart. Buildings as Actors (HSS)
Service Innovation Needs Families as Actors (HSS)
Individuals as Actors

28
What’s UP at IBM?

29
Those in-the-know say, “IBM is helping to build a Smarter Planet…”

30
Smarter Planet = Smarter Systems
INSTRUMENTED
We now have the ability to
measure, sense and see
the exact condition of
practically everything.
INTERCONNECTED
People, systems and objects
can communicate and
interact with each other in
entirely new ways.
INTELLIGENT
We can respond to changes
quickly and accurately,
and get better results
by predicting and optimizing
for future events.
WORKFORCE
PRODUCTS
SUPPLY CHAIN
COMMUNICATIONS
TRANSPORTATION BUILDINGS
IT NETWORKS

31
City challenges
Ryan Chin:
Smart Cities

32
Smart Startup: Streetline

33
Smart Neonatal ICU

34
Land-population-energy-carbon
Carlo Ratti:
Senseable Cities

37
Four commandments for cities of the future: Eduardo Paes at TED2012

38
SC IOC as a Platform for Innovation

39
39
 Identifies entrepreneurs developing
businesses aligning with our Smarter Planet
vision.
 SmartCamp finalists raised more than
$50m and received significant press in
Wall Street Journal, Forbes and
Bloomberg
in
Healthcare SmartCamp kickstart - Miami - May 15, 2012
Apply by April 27th
SmarterCities SmartCamp kickstart - New York - May 24, 2012
Apply by May 3rd
North America Regional SmartCamp - Boston - June 20 & 21, 2012
Apply by May 25th
apply now at www.ibm.com/isv/startup/smartcamp
Exclusive Networking and
Mentoring event
North America SmartCamp lead: Eric Apse, eapse@us.ibm.com
University Programs lead: Dawn Tew, dawn2@us.ibm.com

40
What are the trends?
Digital Immigrant
Born: 1988
Graduated College: 2012
Digital Native
Born: 2012
Enters College: 2030

41
Transportation: Self-driving cars
Steve Mahan:
Test “Driver”

42
Water: Circular Economy

43
Manufacturing: Circular Economy
Ryan Chin:
Urban Mobility
Baxter: Building the Future
Maker-Bot: Replicator 2

44
Energy: Artificial Leaf

45
Technology: Cognitive Computing

46
46
Example: Leading Through Connections with…
Universities Collaborate with IBM Research to Design Watson
for the Grand Challenge of Jeopardy !
Assisted in the development of the Open
Advancement of Question-Answering Initiative
(OAQA) architecture and methodology
Pioneered an online natural language question
answering system called START, which provided the
ability to answer questions with high precision using
information from semi-structured and structured
information repositories
Worked to extend the
capabilities of Watson, with a
focus on extensive common sense
knowledge
Focused on large-scale
information extraction,
parsing, and knowledge
inference technologies
Worked on a visualization component to visually
explain to external audiences the massively parallel
analytics skills it takes for the Watson computing
system to break down a question and formulate a
rapid and accurate response to rival a human brain
 Provided technological advancement enabling a
computing system to remember the full interaction,
rather than treating every question like the first one -
simulating a real dialogue
Explored advanced machine learning
techniques along with rich text
representations based on syntactic and
semantic structures for the Watson’s
optimization
Worked on information retrieval
and text search technologies
http://w3.ibm.com/news/w3news/top_stories/2011/02/chq_watson_wrapup.html

47
Buildings: Circular Economy
China Broad Group:
30 Stories in 15 Days

48
Retail & Hospitality: Social Media

49
Finance: Crowd Funding

50
Health: Robotics & 3D Printing

51
Education: Challenge-Based Sport

52
Government: Parameterized Meta-Rules
• Innovativeness
• Equity
– Improve
weakest
link
• Sustainability
• Resiliency

53
Competitive Parity – Achieved.
• The NFL touts parity—the idea
that any team can win on any
given Sunday. But this
year, parity has truly run wild.
• Through six weeks, 11 of the
NFL's 32 teams are 3-3.
• The Journal asked the statistical
gurus of Massey-Peabody
Analytics to run a coin-flip
simulation…

54
2030 and Beyond…. Government, Health, Education, Finance, etc.

6/21/2013
55

Questions
• What is ISSIP?
• What is a service platform?
• What is service science?
• What is a T-shaped professional?
• How is this related to your work at IBM with universities?
• What are the important future trends you see?

What is ISSIP?
• Pronounced I-ZIP
• International Society
of Service Innovation
Professionals
• SIG Education &
Research
– T-shapes
– Service Science
6/21/2013
57

What is a service platform?
• Access Places & Entities
– Scale benefits
– Of new knowledge
– Globally & rapidly
• Smart Phones & Watson
• Smarter City IOC
• Franchises
6/21/2013
58

Service Science
• Emerging Discipline
– Service Science,
Management, and
Engineering (SSME)
• Service
– Not sector (ECON)
– Not capability (CS)
• Value Co-Creation
• Service System Entities
6/21/2013
59
IBM SSME Centennial Icon of Progress

What is a T-shaped Professional?
6/21/2013
60
Many disciplines
Many sectors
Many regions/cultures
(understanding & communications)
Deepinonesector
Deepinoneregion/culture
Deepinonediscipline

How do universities fit in?
• Best way to predict
the future is to inspire
the next generation to
build it better
• The future is already
here at universities it
is just not well
distributed
6/21/2013
61

6/21/2013
accelerating regional development (IBM UPward) 62
IBM operates in 170 countries
around the globe
Acquisitions contribute significantly
to IBM’s growth ; ~120 acquisitions in
last decade
2012 Financials
Revenue - $ 104.5B
Net Income - $ 17.6B
EPS - $ 15.25 (10 yrs of
EPS d/digit growth)
 Net Cash - $18.2B
24% of IBMs revenue in
Growth Market countries;
growing at 7% ( @cc) in
2012
Number 1 in patent
generation for 20
consecutive years ;
6,478 US patents
awarded in 2012
More than 40% of IBMs
workforce does
business away from an
office
5 Nobel Laureates10 time winner of the
President’s National
Medal of Technology &
Innovation – latest for
LASIK laser refractive
surgical techniques
The Smartest Machine On Earth
100 Years of Business &
Innovation in 2011
New Era in IBM’s Leadership
IBM Growth Initiatives
IBM has
~425,000
employees
worldwide
Context: IBM 101

IBM Platforms for Entrepreneurs
• Smarter Cities Intelligent Operations Center Platform
• IBM helping university startups to scale up (growth)
6/21/2013
63

64
University: Four Missions
• Knowledge
– 1. Transfer (Teaching)
– 2. Creation (Research)
– 3. Application (Benefits)
• Commerce/Entrepreneurship
• Governance/Policymaking
– 4. Re-Integration (Challenge)
• Innovativeness, Equity
• Sustainability, Resilience
• Nested, Networked Holistic Service Systems
– Flows
– Development
– Governance
Nation
State/Province
City/Metro
University
College
K-12
Cultural &
Conference
Hotels
Hospital
Medical
Research
Worker
(professional)
Family
(household)
For-profits
Non-profits
U-BEE
Third Mission (Apply to Create Value)
is about U-BEEs =
University-Based
Entrepreneurial Ecosystems

IBM University Programs Universities Matter #1
6/21/2013
65
Japan
China
Germany
France
United KingdomItaly
Russia SpainBrazil
Canada
India
Mexico AustraliaSouth Korea
NetherlandsTurkey
Sweden
y = 0,7489x + 0,3534
R² = 0,719
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6 7 8 9
%globalGDP
% top 500 universities
Nation’s % WW GDP and % Top 500 Universities (2009 Data)

6/21/2013
66
…But it can be costly, American student loan debt is over $900M

6/21/2013
67
“When we combined the impact of Harvard’s direct spending on payroll, purchasing and construction – the
indirect impact of University spending – and the direct and indirect impact of off-campus spending by Harvard
students – we can estimate that Harvard directly and indirectly accounted for nearly $4.8 billion in economic
activity in the Boston area in fiscal year 2008, and more than 44,000 jobs.”

6/21/2013
68
What is a U-BEE? A local job creator/sustainer
Innovating “whole service” in all regions worldwide
http://www.service-science.info/archives/1056
Nation
State/Province
City/Region
University
College
K-12
Cultural &
Conference
Hotels
Hospital
Medical
Research
Worker
(professional)
Family
(household)
For-profits
Non-profits
U-BEE
U-BEEs = University-Based Entrepreneurial Ecosystems
“The future is already
here (at universities),
it is just not evenly
distributed.”
“The best way to
predict the future
is to (inspire the next
generation of students
to) build it better.”

IBM University Programs On Campus IBMers
6/21/2013
6969
Up-Skill
Cycle
University-Region1
University-Region2
= New Venture
= Acquisition
= High-Growth
Acquisition/
New IBM BU
(Growing)
= High-Productivity/
Mature IBM BU
(Shrinking)
= IBMer moving from
mature BU to acquisition
= IBMer moving into
On Campus IBMer role
(help create graduates
with Smarter-Planet skills,
help create Smarter Planet
oriented new ventures;
Refresh skills
= Graduates with
Smarter Planet skills
IBM

70
Measuring Quality-of-Life?
A. Systems that focus on flow of things that humans need (~15%*)
1. Transportation & supply chain
2. Water & waste recycling/Climate & Environment
3. Food & products manufacturing
4. Energy & electricity grid/Clean Tech
5. Information and Communication Technologies (ICT access)
B. Systems that focus on human activity and development (~70%*)
6. Buildings & construction (smart spaces) (5%*)
7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*)
8. Banking & finance/Business & consulting (wealthy) (21%*)
9. Healthcare & family life (healthy) (10%*)
10. Education & work life/Professions & entrepreneurship (wise) (9%*)
C. Systems that focus on human governance - security and opportunity (~15%*)
11. Cities & security for families and professionals (property tax)
12. States/regions & commercial development opportunities/investments (sales tax)
13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax)
0/19/02/7/4
2/1/1
7/6/1
1/1/0
5/17/27
1/0/2
24/24/1
2/20/24
7/10/3
5/2/2
3/3/1
0/0/0
1/2/2
Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities
* = US Labor % in 2009.
“61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”

Growth
71

72
Nesting
Matryoska dolls:
Origin Japanese

73
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

74
Time
ECOLOGY
~14B
Big Bang
(Natural
World)
~10K
Cities
(Human-Made
World)
sun (energy)
writing
(symbols and scribes,
stored memory
and knowledge)
earth
(molecules &
stored energy)
written laws
(governance and
stored control)
bacteria
(single-cell life)
sponges
(multi-cell life)
money
(governed
transportable value
stored value,
“economic energy”)
universities
(knowledge workers)
clams (neurons)
trilobites (brains)
printing press (books)
steam engine (work)200M
bees (social
division-of-labor)
60
transistor
(routine
cognitive work)
Evolution of Natural Systems & Service Systems
Unraveling the mystery of evolving hierarchical-complexity in new populations…
To discover the world’s architectures and mechanisms for computing non-zero-sum

75
Automobile
Technological Acceleration
0 25 50 100 125 15075
Years
25
50
100
TelephoneElectricity
Radio
Television
VCR
PC
Cellular
%Penetration
YEARS

76
•iPhone/iPad app developer
•wireless marketing director
•microfinance infrastructure designer
•3D content developer for movies, TV
•social network manager
•deploying technology into the cloud
•organic solar cell development
•digital image management
Many top in-demand jobs in 2011 did not exist in 2005!
76

77 77
U.S Department of Labor
estimates that today’s learner
will have 10-14 jobs…
by the age of 38!

78
 Estimates are 85% of the jobs today’s learners will be doing
haven’t been invented yet
 they'll be using technologies that don't exist
 to solve problems we don't yet know are problems
78

79
Five historical cycles …

80
~100 years of US job transformations
Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis

CACM Article
• Maglio, P. P., Srinivasan, S., Kreulen, J. T., &
Spohrer, J. (2006). Service systems, service
scientists, SSME, and innovation.
Communications of the ACM, 49(7), 81-85.

IMM Article
• Vargo, S. L., & Lusch, R. F. (2011). It's all B2B…
and beyond: Toward a systems perspective of
the market. Industrial Marketing
Management, 40(2), 181-187.

10 GDL Reasons
• 1. Service Economy
– Growth of service sector in GDP and Labor of nations
• 2. Servitization
– Growth of revenue from service offerings of businesses
• 3. Globalization
– Franchises and outsourcing, taxation, immigration, exports,
• 4. Demographics
– Aging population, young populations, etc.
• 5. Urbanization
– Growth of urban population, specialization, higher education, etc.
• 6. Social Services
– Urban populations need more social services, crime, poverty, mental illness, etc.
• 7. Financial Services
– Wealth effect, families outsource mode, business outsource more
• 8. IT Platforms and Services
– From on-line retail to social media, gamification, big data, platforms,, to outsourcing and hyperspecializaion,
self-service, digital business models, open data
• 9. B2B Services
– Growth in number of businesses business, entrrepreneurship, open innovation
• 10. Service innovation needs
– Overcome Baumol’s disease of low productivity in government, health, education, etc.

Service Science
• The transdisciplinary study of service, the
application of knowledge for mutual benefits
(value co-creation phenomena), in an ecology
of interacting many-to-
many, nested, networked viable service
system entities.

Future Directions:
Big Data & Cognitive Computing Age
• What new capabilities will service system
entities (species?) have in the future?
– Natural Language Interactions
– Recommendations Rank Ordered
– Historical Awareness
• Were recommendations followed?
• What outcomes resulted?
• Who has responsibility for negative outcomes?
• What responsibility for privacy of data?

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