matters more than ever 20130618 v3

Ten Reasons Why Service Science Matters

More Than Ever

Jim SpohrerDirector IBM University Programs

June 18, 2013

Importance & Opportunity

• Why is this important?– Ten Reasons Service Science Matter More Than Ever

• There is a real opportunity to shift a lot of professionals (academics, industry, government, social sector, etc.) from thinking in GDL (Goods Dominant Logic) towards SDL (Service Dominant Logic)– International Society of Service Innovation

Professionals (http://www.issip.org)– ISSIP (pronounced I-ZIP) will create whitepapers

EDUCAUSE Review Article

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

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.

Service Science Article

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

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.

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).

Goods-Dominant Logic (GDL):Service Economy

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.

How to generate ten SDL reasons?• 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.”

“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 & SDLGDL Reasons: Sector Transformation, adopting new technologies

SDL Reasons: Entity’s Competitive Strategy, Competing for Collaborators

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

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)

04/11/2023© IBM 2013 IBM University Programs

worldwide accelerating regional development (IBM UPward)

http://www.service-science.info/archives/1056

Nation

State/Province

City/Region

UniversityCollege

Cultural &ConferenceHotels

HospitalMedical

Research

Worker(professional)

Family(household)

For-profits

Non-profits

U-BEEJob Creator/Sustainer

U-BEEs = University-Based Entrepreneurial Ecosystems

“The future is already here (at universities),it is just not evenlydistributed.”

“The best way topredict the futureis to (inspire the nextgeneration of studentsto) build it better.”

“Multilevel nested, networked holistic service systems (HSS) that provision whole service (WS) tothe people inside them. WS includes flows (transportation, water, food, energy, communications), development (buildings, retail ,finance, health, education), and governance (city, state, nation). ”

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.

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.

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?

The Well-Read Service Scientist

• http://service-science.info/archives/2708

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

What is a service platform?

• Access Places & Entities– Scale benefits– Of new knowledge– Globally & rapidly

• Smart Phones & Watson• Smarter City IOC• Franchises

Service Science

• Emerging Discipline– Service Science,

Management, and Engineering (SSME)

• Service– Not sector (ECON)– Not capability (CS)

• Value Co-Creation• Service System Entities04/11/2023

development (IBM UPward)22

IBM SSME Centennial Icon of Progress

What is a T-shaped Professional?

Many disciplinesMany sectors

Many regions/cultures(understanding & communications)

Deep in one sector

Deep in one region/culture

Deep in one discipline

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

Backups

• To help answering questions

Data Science +Urban Science + Service Science =Smarter Planet

Jim SpohrerDirector IBM University Programs

June 17, 2013

Sciences & Applied Arts

• All sciences study systems– Physics, Chemistry, Biology, Information and

Computer Science, Service Science, etc.• All applied arts change systems

– Management, Engineering, Design Arts, Public Policy seek to apply rigorous scientific knowledge to create better worlds to inhabit

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 decadeGoogle 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 day250,000,000 tweets

2 Billion Internet users in 2011By 2013, annual internet traffic will reach 667 Exabytes

Urban Science

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

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.

What’s UP at IBM?

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

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

City challenges

Ryan Chin:Smart Cities

Smart Startup: Streetline

Smart Neonatal ICU

Land-population-energy-carbon

Carlo Ratti:Senseable Cities

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

SC IOC as a Platform for Innovation

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

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 andMentoring event

North America SmartCamp lead: Eric Apse, eapse@us.ibm.comUniversity Programs lead: Dawn Tew, dawn2@us.ibm.com

What are the trends?

Digital ImmigrantBorn: 1988

Graduated College: 2012

Digital NativeBorn: 2012

Enters College: 2030

Transportation: Self-driving cars

Steve Mahan:Test “Driver”

Water: Circular Economy

Manufacturing: Circular Economy

Ryan Chin:Urban Mobility

Baxter: Building the Future

Maker-Bot: Replicator 2

Energy: Artificial Leaf

Technology: Cognitive Computing

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

Buildings: Circular EconomyChina Broad Group:30 Stories in 15 Days

Retail & Hospitality: Social Media

Finance: Crowd Funding

Health: Robotics & 3D Printing

Education: Challenge-Based Sport

Government: Parameterized Meta-Rules

• Innovativeness

• Equity

– Improveweakestlink

• Sustainability

• Resiliency

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…

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

IBM operates in 170 countries around the globe

Acquisitions contribute significantly to IBM’s growth ; ~120 acquisitions in last decade

2012 FinancialsRevenue - $ 104.5BNet Income - $ 17.6BEPS - $ 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)04/11/2023

development (IBM UPward)62

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

UniversityCollege

HospitalMedical

Research

Family(household)

For-profits

Non-profits

Third Mission (Apply to Create Value) is about U-BEEs = University-Based

Entrepreneurial Ecosystems

Universities Matter #1

ChinaGermany

France

United KingdomItaly

Russia SpainBrazilCanada

IndiaMexico AustraliaSouth Korea

NetherlandsTurkey

Sweden

y = 0,7489x + 0,3534R² = 0,719

0 1 2 3 4 5 6 7 8 9

% top 500 universities

Nation’s % WW GDP and % Top 500 Universities (2009 Data)

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

“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.”

What is a U-BEE? A local job creator/sustainerInnovating “whole service” in all regions worldwide

http://www.service-science.info/archives/1056

Nation

State/Province

City/Region

UniversityCollege

HospitalMedical

Research

Family(household)

For-profits

Non-profits

U-BEEs = University-Based Entrepreneurial Ecosystems

“The future is already here (at universities),it is just not evenlydistributed.”

“The best way topredict the futureis to (inspire the nextgeneration of studentsto) build it better.”

On Campus IBMers

Up-SkillCycle

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 intoOn Campus IBMer role(help create graduateswith Smarter-Planet skills,help create Smarter Planetoriented new ventures;Refresh skills

= Graduates withSmarter Planet skills

Measuring Quality-of-Life?A. Systems that focus on flow of things that humans need (~15%*)

1. Transportation & supply chain2. Water & waste recycling/Climate & Environment3. Food & products manufacturing4. Energy & electricity grid/Clean Tech5. 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)

0/19/02/7/42/1/1

5/17/27

24/24/1

2/20/24

7/10/3

3/3/10/0/0

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

Nesting

Matryoska dolls:Origin Japanese

I am nested in at least 10 systemsLevel 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

ECOLOGY

~14BBig Bang

(NaturalWorld)

~10KCities

(Human-MadeWorld)

sun (energy)

writing(symbols and scribes,

stored memoryand knowledge)

earth(molecules &

stored energy)

written laws(governance andstored control)

bacteria(single-cell life)

sponges(multi-cell life)

money(governed

transportable valuestored value,

“economic energy”)

universities(knowledge workers)

clams (neurons)trilobites (brains)

printing press (books)steam engine (work)200M

bees (socialdivision-of-labor)

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

Automobile

Technological Acceleration

0 25 50 100 125 15075Years

100TelephoneElectricity

Television

Cellular

•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!

U.S Department of Labor estimates that today’s learner will have 10-14 jobs…

by the age of 38!

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

Five historical cycles …

~100 years of US job transformations

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

6 R’s• Research (Collaborate)• Readiness (Skills)• Recruiting (Jobs)• Revenue (Solutions)• Responsibility (Volunteers)• Regions (Smarter Cities, Startups & Workforce)

WORKFORCE

PRODUCTS

SUPPLY CHAIN

COMMUNICATIONS

TRANSPORTATION BUILDINGS

Gamification

• Gamification is the use of game thinking and game mechanics in a non-game context in order to engage users and solve problems.

Service Economy

• “The increased importance of the service sector in industrialized economies. The current list of Fortune 500 companies contains more service companies and fewer manufacturers than in previous decades.”

Social Media

• Social media refers to the means of interactions among people in which they create, share, and exchange information and ideas in virtual communities and networks

Big Data

• Big data is a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data processing applications.

• 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.

Service-oriented modeling

• Service-oriented modeling is the discipline of modeling business and software systems… This overall servicing vision embodies the general notion: “everything is a service”…

Franchising

• Franchising is the practice of using another firm's successful business model.

Servitization

• Products today have a higher service component than in previous decades. In the management literature this is referred to as the servitization of products. Virtually every product today has a service component to it.

Digital Age

• The Information Age (also known as the Computer Age, Digital Age, or New Media Age) is a period in human history characterized by the shift from traditional industry that the industrial revolution brought through industrialization, to an economy based on the information computerization.

Export

• In national accounts "exports" consist of transactions in goods and services (sales, barter, gifts or grants) from residents to non-residents. Amazon and eBay have largely bypassed the involvement of Customs in many countries because of the low individual values of these trades.

Immigration

• Immigration is the movement of people into another country or region to which they are not native in order to settle there.[

Cybersecurity

• The field covers all the processes and mechanisms by which computer-based equipment, information and services are protected from unintended or unauthorized access, change or destruction.

Service-Dominant Logic

• Exchange– Indirect– Goods– Operant– Economies

• Co-creator– Value proposition– Relational

• Resource Integrators• Beneficiary

matters more than ever 20130618 v3

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service research

exchange of service

service science articlespohrer

service science article

servicedominant logicas

social sector

gdl reasons

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