the future of cities and regions 20110929 v4

© 2011 IBM Corporation

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

The Future of Cities and Regions:U-BEEs Accelerating Regional Upward Spirals

Dr. James (“Jim”) C. SpohrerInnovation Champion and Director IBM UPwardIBM University Programs Worldwide, accelerating regional developmentFor Foundation Roundtable on “Future of Cities and Regions”Sept 29th, 2011, Madrid, [email protected]

Used with permission eVolo.us

2 © 2011 IBM CorporationIBM University Programs worldwide, accelerating regional development (IBM UPward)

Outline

Introduction: IBM & Smarter Cities– Who I am, my team

– IBM & the Smarter Planet Initiative

Trend: Universities & Regional Development

– Universities have long been the key to regional development in many ways…

– …But many are in crisis, and will re-invent themselves as “cities within cities” – becoming U-BEE living labs inventing the future

Evolution: Cities Getting Smarter– McKinsey Study

– IBM Study

“Let’s Build a Smarter Planet"


Who I am Director IBM Global University Programs worldwide (since 2009)

– Global team works with 5000 university world wide (http://www.ibm.com/university)

– 6 R’s: Research (Awards), Readiness (Skills), Recruiting, Revenue, Responsibility, Regions

– Transform “IBM on Campus” brand awareness (“Smarter Planet/Smarter Cities”)

– Create “Urban Service System” Research Centers & U-BEEs Founding Director of IBM's first Service Research group (2003-2009)

– Almaden Research Center, San Jose, CA

– 10x ROI with four IBM outstanding and eleven accomplishment awards

– Improve existing offerings, create new, portfolio synergies, partners, patents, publications

– I know/work with service research pioneers from many academic disciplines• I advocate for Service Science, Management, Engineering, and Design (SSME+D)

– Short-term: Curriculum (T-shaped people, deep in an existing discipline)– Long-term: New transdiscipline and profession (awaiting CAD tool)

• I advocate for SRII (“one of the founding fathers”)• Co-editor of the “Handbook of Service Science” (Springer 2010)

Founding CTO IBM’s Venture Capital Relations Group Silicon Valley (1999-2003)– Headlights and win-win strategies for alignment and growth

Other background– Apple Computer’s (Distinguished Engineer Scientist and Technologist) award (90’s)

– Ph.D. Computer Science/Artificial Intelligence from Yale University (80’s)

– Dialog Systems/Verbex Speech Recognition Start-up (acquired by Exxon, late 70’s)

– B.S. in Physics from MIT (70’s)


Who We Are: Sampling of Regional U-BEE Leads

Region Contact Name

Africa Sean Mclean

Australia Jay Hannon

ASEAN Seow Khun Lum

Canada Stephen Peregut

China Jean Li

Egypt Hisham El-Shishiney

EMEA Diem Ho

GCG Wang Hao

India Bhooshan Kelkar

Japan Kohzoh Kitamura

Latin America Juan Duran

Middle East Andrea Emiliiani

Nordics Jyrki Koskinen

Russia Sergey Belov

Turkey Jale Akyel


IBM operates in 170 countries around the globe

~425K employees ~100 acquisitions in 10 years 2010 Financials

Revenue - $ 99.9B Net Income - $ 14.8B EPS - $ 11.52 Net Cash - $11.7B

21% of IBM’s revenue in growth market countries; growing at 13% in late 2010

Number 1 in patent generation for 18 consecutive years ; 5,896 US patents awarded in 2010

More than 40% of IBM’s workforce conducts business away from an office

5 Nobel Laureates

9 time winner of the President’s National Medal of Technology & Innovation - latest award for Blue Gene Supercomputer

“Let’s Build a Smarter Planet"

The Smartest Machine On Earth

100 Years of Business & Innovation


Where are the opportunities? Every city and region!

'building smarter systems isn't simply a proposal or theory, but a practical reality, with clear steps, quantifiable benefits and best practices'

- Sam Palmisano


Smarter Planet: The Three I’s and 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


Communication$ 3.96 Tn

Transportation$ 6.95 Tn

Leisure / Recreation / Clothing

$ 7.80 Tn

Healthcare$ 4.27 Tn

Food$ 4.89 Tn

Infrastructure$ 12.54 Tn

Govt. & Safety$ 5.21 Tn

Finance$ 4.58 Tn

Electricity$ 2.94 Tn

Education$ 1.36 Tn

Water$ 0.13 Tn

Global system-of-systems$54 Trillion

(100% of WW 2008 GDP)

Same IndustryBusiness SupportIT SystemsEnergy ResourcesMachineryMaterials Trade

Legend for system inputsNote:1. Size of bubbles represents

systems’ economic values2. Arrows represent the strength of

systems’ interaction

Source: IBV analysis based on OECD

Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis)

This chart shows ‘systems‘ (not ‘industries‘)

Our planet is a complex system-of-systems

1 Tn


Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated

Global economic value of

System-of-systems

$54 Trillion100% of WW 2008 GDP

Inefficiencies$15 Trillion28% of WW 2008 GDP

Improvement potential

$4 Trillion7% of WW 2008 GDP

How to read the chart:

For example, the Healthcare system‘s value is $4,270B. It carries an estimated inefficiency of 42%. From that level of 42% inefficiency, economists estimate that ~34% can be eliminated (= 34% x 42%).

We now have the capabilities to manage a system-of-systems planet

Source: IBM economists survey 2009; n= 480

System inefficiency as % of total economic value

Impr

ovem

ent

pote

ntia

l as

% o

f sy

stem

inef

ficie

ncy

Education1,360

Building & Transport Infrastructure

12,540

Healthcare4,270

Government & Safety5,210

Electricity2,940

Financial4,580

Food & Water4,890

Transportation (Goods & Passenger)

6,950

Leisure / Recreation /

Clothing7,800

Communication3,960

Analysis of inefficiencies in the planet‘s system-of-systems

Note: Size of the bubble indicate absolute value of the system in USD Billions

42%

34%

This chart shows ‘systems‘ (not ‘industries‘)

15%

20%

25%

30%

35%

40%

15% 20% 25% 30% 35% 40% 45%


Quality-of-Life: How to measure?

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)

20/10/10

0/19/0

2/7/42/1/1

7/6/11/1/0

5/17/27

1/0/2

24/24/1

2/20/247/10/3

5/2/2

3/3/10/0/0

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)”


Our 21st Century World: System of SystemsRegional Nested, Networked Holistic Product-Service Systemshttp://www.service-science.info/archives/1056 Holistic Product-Service Systems provide

access to “Whole Service” to people inside, including Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.

Examples: Nations, States, Cities, Universities, Hotels, Hospitals, Homes

Definition: An holistic product-service system is a type of complex value-cocreation system that can provide “whole service” to its primary population of people, independent of all external systems, for an extended period of time, balancing independence with interdependence (outsourcing limits, re-cycle to sustain, etc.)

University-Based Entrepreneurial Ecosystems (U-BEE’s): Universities are usually in the “top five” job creators of regions, when they have associated incubators & science-technology parks, super-computing data centers, hospitals, cultural & conference hotels, K-12 schools, etc.

Nation

State/Province

City/Region

UniversityCollege

K-12

Cultural &ConferenceHotels

HospitalMedical

Research

Worker(professional)

Family(household)

For-profits

Non-profits

U-BEEJob Creators

~25-50% of start-ups are newIT-enabled service offerings

SaaSPaaSIaaS

http://www.thesrii.org


Urban-Age.Net

Currently, the world’s top 30 cities generate 80% of the world’s wealth.The Urban Age

For the first time in history more than 50% the earth’s population live in cities - by 2050 it will be 75%The Endless City


Recent McKinsey Study and IBM Study

14 © 2011 IBM CorporationIBM UP (University Programs) WW

Edu-Impact.Com: Growing Importance of Universities with Large, Growing Endowments

“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.”


Universities and Regional Development% WW GDP and % WW Top-500-Universities

Japan

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

0 1 2 3 4 5 6 7 8 9

% g

loba

l G

DP

% top 500 universities

Strong Correlation (2009 Data): National GDP and University Rankingshttp://www.upload-it.fr/files/1513639149/graph.html


Success breeds a crisis in higher education…

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


UNIVERSITIES:Research Centers & Real-World Systems

CITIES/METRO REGIONS:Universities Key to Long-Term Economic Development

Accelerating Regional Innovation: Universities as “Living Labs” for Host Cities


Pegasus Global Holdings $200M Smart City Living Lab

7 September 2011

The Center for Innovation, Testing and Evaluation will cover 20 square miles in New Mexico, and will resemble a mid-sized American city, including urban canyons, suburban neighborhoods, rural communities and distant localities.

Potentially be able to house up to 35,000 people and will operate as if people are actually living there

The facility will allow technology companies, university and urban planners to test the "positive and negative impacts emerging technologies - Smart Grid, intelligent traffic systems, cyber security and more

estimated cost $200 million to build/launch (or ~$6K per person for infrastructure)– Economy Hotel Projects ~$30K per person to build/launch

– Highest Priced Luxury Resort Hotels ~$600K per person to build/launch


CityOne Game to Learn “CityInvesting”Serious Game to teach problem solving for real issues in key industries, helping companies to learn how to work smarter. Energy, Water, Banking, Retail

http://www.ibm.com/cityone


Systems-Disciplines Framework

Systems Focus– Flows

– Human Development

– Governance

Disciplines Focus– Stakeholders

– Resources

– Change

– Value

Stakeholders

Resources

Change

Value

Flow

s Hum

an D

evelopment

Governanc

e Governanc

e

Systems

Discipline

s


The Goal: Adaptive Innovators, so called T-shaped professionalsReady for Life-Long-LearningReady for T-eamworkReady to build a Smarter Planet

SSME+D = Service Science, Management, Engineering + Design

Many disciplines(understanding & communications)

Many systems(understanding & communications)

Deep in one discipline

(ana

lytic thinking & problem

solving)

Deep in one system

(analytic thinking & problem

solving)

Many multi-cultural-team service projects completed(resume: outcomes, accomplishments & awards)

BREADTH

DE

PT

H


What’s the best way to predict the future?

The best way to predict the future is….– To create it. (Moliere)

– To invent it. (Kay)

– To inspire and enable the next generation to build it better (IBM UPward)


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


Thank-You! Questions?

Dr. James (“Jim”) C. SpohrerDirector, IBM University Programs worldwide, accellerating regional development (IBM Upward)[email protected]

“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


Thanks for visiting IBM Almaden Research Center, San Jose, CA

Upcoming Conferences– Sept 27th, 2011

• Future Technologies,Skills & Jobs

– July 2012• ISSS & SRII San Jose• HSSE San Francisco

More Information– Blog

• www.service-science.info– Twitter

• @JimSpohrer– Presentations

• www.slideshare.net/spohrer– Email

• [email protected]


Frameworks, Theories, and Models that connect…

The 4 I’s– Infrastructure

– Individuals

– Institutions

– Information Remember

– Questions

– Connections

– Book

– Speed! Societal Infrastructure(Technologies & Environment)

Individuals(Skills)

Institutions(Jobs)

Cultural Information(Quality-of-Life Measures)


NPR: Out of Economic Chaos, A New Order May Be Rising

HAWLEY: The grand total of U.S. automotive fatalities from 1975 to the present, about one and a half million people. Now, the grand total of U.S. fatalities from 1775 to the present in every military conflict we've had is 1.3 million. So in other words, in the last roughly 35 years we've killed more people with cars than we have in more than 300 years of warfare.

I think if you step back and look at cars from a sort of 35,000 foot level, you've got to wonder why we're doing this to ourselves. And there's a tremendous amount of industry and employment built up around it. But suppose it all changed.

One way it could change is if human weren't allowed to drive cars anymore. Or let me put it differently. If cars were much more appealing because they drove themselves and did it safely.

And this isn't just Jetson stuff. There's a brilliant computer scientist, artificial intelligence researcher at Stanford, named Sebastian Thrun. He's invented a car that drives itself. You can hop in the car and you never touch the wheel or the pedals. It navigates through all the traffic snarls. It won't run over little old ladies in Pasadena. It won't even run over a squirrel.

If you could eliminate the seven million accidents per year, the 2.9 million injuries, the 40,000 fatalities, that would be enormous boon. But if you think about what would happen in the short term. Let's suppose in the next five or ten years this idea comes to fruition.

Think about all the disruption that could cause. You might not have to own a car. Well, that might be good. You'd have a garage that you could use to start up a company instead of storing a couple of rusting hulks of metal in it. You'd never have to call Tom and Ray Magliozzi again, because you wouldn't have to fix your car.

There wouldn't be a parking problem, because you'd push a little button on your iPhone, a smart car would zip up, pick you up, drop you off where you need to go. That means no more valets, no more taxi drivers, no more meter maids, no more traffic cops. You'd never hear a car horn, because why would a robot car honk at another robot car. Makes no sense.

But that's an example of the sort of change that in the short term can cause immense of amounts of anxiety and upheaval.

http://www.npr.org/2011/09/24/140766796/out-of-economic-chaos-a-new-order-may-be-rising


California Human Development Report 2011 http://ww

w.m

easureofamerica.org/docs/A

PortraitO

fCA

.pdf


What are the characteristics of highly innovative regions?

Frequent Alignment Meetings (monthly, quarterly, annual)– City’s Innovation Roadmap (Mayor’s Office)

– University’s Innovation Roadmap (President of University)

– Incubator’s Innovation Roadmap (Head of University-based Incubator)

– Smart Specialization (LNU Vaxjo Wood, UA Tuscon Border Security, etc.)

Local Role Model(s) – Investment in Risk-Taking– Local success stories and role models

– Ideally, a billionaire local entrepreneur & Foundation

– At least $10M annual investment in entrepreneurship programs & local incubator

Local Culture – “Just Say Yes to Entrepreneurs”– University as a first customer, City as a second customer

– Sometimes “born global” on the cloud

– Smarter local risk-taking, smarter global scale-out planning

Early Identification and Alignment with Scale-Up Partner– Which firms/organizations already have many customers that will need the innovation

– Finding ways to establish win-win growth strategies as early as possible


A major societal transformation is underway…“If we’re number one in technology, why do I have to call India for tech support?” – Jay Leno“Ideas are the new currency in a global knowledge economy.” – Ben Wildavsky, Senior Fellow, Kauffman Foundation“No country can lead in today’s world unless it leads in science.” – Speaker Nancy Pelosi“A history of modernization is in essence a history of scientific and technological progress… I firmly believe science is the ultimate revolution.” – Wen Jiabao, Premier, People’s Republic of China

Driven by “The Death of Distance” & “Algorithmic Revolution”- Cairncross, Economist (1997)

- Zysman, CACM (2006)

Manifesting in new forms of “Global Competition”– Friedman, The World is Flat (2005)

Characterized as a “Gathering Storm” by Americans– US National Academies (2005, 2007, 2011)


The Gathering Storm Report“The committee concluded that the United States appears to be on a course that will lead to declining, not growing, standard of living for our children and grandchildren.” – Gathering Storm“Gentlemen, we have run out of money. It is time to start thinking.” – Rutherford

“The Gathering Storm report is focused upon the ability of Americans to compete for employment in a job market that increasingly knows no geographic boundaries.”

“The United States takes deserved pride in the vitality of its economy, which forms the foundation of our high quality of life, our national security, and out hope that our children and grandchildren will inherit every greater opportunities.”

“The possession of quality jobs is the foundation of a high quality life for the nations citizenry.”

“While only four percent of the nations workforce is composed of scientists and engineers, this group disproportionately creates jobs for the other 96 percent.”

“Further, the pace of creation of new knowledge appears by almost all measures to be accelerating.”

“While this progress by other nations is to be both encouraged and welcomed, so too is the notion that Americans wish to continue to be among those people who do prosper.”

“The Gathering Storm committee contends that it is strongly in America’s interest for all nations to prosper. Aside from its humanistic merit this outcome should produce a safer world for everyone…”


The Gathering Storm Recommendations“It would be impossible not to recognize the great difficulty of carrying out Gathering Storm recommendations, such as doubling the research budget, in today’s fiscal environment… However… One seemingly relevant analogy is that a non-solution to make an over-weight aircraft flight-worthy is to remove an engine.” – Gathering Storm Revisited

“The fate of empires depends on how they educate their children.” – Aristotle“The best way to predict the future is to inspire & enable the next generation to build it better.” –IBM UPward

I. Improve inputs to universities– Fix “broken” K-12 system (invest in K-12)

III. Improve outputs from universities– Fix “broken” University system (invest in Higher Education)

II. Improve transitions from university to first job– Fix “broken” Employment system (increase R&D funding)

IV. Improve speed of regional innovation– Fix “broken” Governance system (align visa, tax, etc. regulations)


The Gathering Storm, Revisited for All Regions“There is nothing as practical as a good theory.” – Kurt Lewin“History is a race between education and catastrophe.” – H.G. Wells

Regions are entities that must learn to learn better– Regions = Nations, States, Cities, etc…

– Learning = Improving the global competitiveness performance of a region

Regional entities = “Holistic product-service systems”– that provision access to high-quality “whole service” to the people in them

– that also provision access to high quality products & services globally

– to contribute to a higher quality-of-life, both inside and outside their region

– service science studies product-service systems & customer-provider interactions (value-cocreation mechanisms, including the servitization of products and productization of service by the algorithmic revolution and other means)

Regional innovation = “Entities learning”– “Run-Transform-Innovate Learning Framework”

– “T-Shaped Professionals & the Systems-Disciplines Framework”

– University-Based Entrepreneurial Ecosystems (U-BEEs)


Societal Transformation: Changing Rules of Competition“The purpose of business is to create new customers.” – Peter Drucker

From Value-Creation Worldview: Compete Against Others - Zero-Sum Mindset– During different time intervals some regions begin to pull ahead, and some fall behind…

eventually the people in lagging regions immigrate to leading regions, some lagging regions “collapse” and are absorbed into other regions or remain dysfunctional… not only is human capital squandered in lagging and collapsed regions, but human suffering grows over time in these regions…. disenfranchised populations create a security threat for all….

To Value-CoCreation Worldview: Compete With/For Others - Non-Zero-Sum Mindset– The gains of innovators are “taxed” based on geography of their customers as well as home

location of provider (providers cannot succeed without customers)… as innovators seek to expand their markets into other regions successfully the “governments” of both provider and customer regions see tax revenues increase… accelerating both “transform” and “innovate” capabilities… accelerating entities learning and regional innovation.

– Innovator regions benefit the most, but the incentive is not to pull so far ahead that other regions lag too far behind or collapse; the incentive is to also create wealthier more capable customers over time, and regions compete in cycles of progress that move everyone forward…

Simple Examples of Value-CoCreation Model: – Toyota locating manufacturing plants in the US

– “The Huppenthal Method” Style of Learning Competition• Students compete, but “winning” is defined as everyone completing the work as fast as

possible, to beat their individual and collective previous best time• Leaders help those lagging behind catch-up, peer-mentoring and win-win NZS mindset• Demonstrated accelerated learning times and elevated student engagement levels


In Sum…“College is more valuable to the future economy than petroleum.” – Greg Easterbrook, Author“You can always depend on the Americans to do the right thing, after exhausting all other possibilities.” – Churchill

Gathering Storm reflects a major societal transformation underway– Driven by “The Death of Distance” and “Algorithmic Revolution”

– Manifesting in new, challenging forms of “Global Competition”

The nature of regional competition is being transformed (accelerating)…– From Value-Creation Worldview: “Compete Against” - Zero-Sum Mindset

– To Value-CoCreation Worldview: “Compete With/For” - Non-Zero-Sum Mindset

The transformation depends on increasing “trust” … a hard thing to do– However, increasing interconnectedness suggests there is no other viable alternative

– Cascade failures in globally interconnected economies are a real threat to stability

Increased trust can only be earned by performance against a shared innovation roadmap, or a shared vision for a better future for all…

– For example, climate change and sustainable environment

– For example, increased global security and financial stability

It is time to get our priorities straight and focus on what matters most…


Complex Buildings: Economy to Luxury Hotels & Resortshttp://www.youtube.com/watch?v=Hm7MeZlS5fo


Installation DeploymentIrruption

The Industrial Revolution

Age of Steam and Railways

Age of Steel, Electricityand Heavy EngineeringAge of Oil, Automobilesand Mass ProductionAge of Information and Telecommunications

Frenzy Synergy Maturity

Panic1797

Depression

1893

Crash

1929

Credit Crisis 2008

Coming period ofInstitutional Adjustment and Production Capital

1

2

3

4

5

Panic1847

1771

1829

1875

1908

1971

1873

1920

1974

1829

Crash

•Formation of Mfg. industry

•Repeal of Corn Laws opening trade

•Standards on gauge, time•Catalog sales companies •Economies of scale

•Urban development•Support for interventionism

•Build-out of Interstate highways

•IMF, World Bank, BIS

Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages; (Edward Elar Publishers, 2003).

Five waves of infrastructure transformation


~Up-Skilling Adjustment Period: A Decade-Level Phenomenon

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


Understanding the Human-Made World

See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html

Also see: Symbolic Species, DeaconCompany of Strangers, SeabrightSciences of the Artificial, Simon


Cities

“Cities are the defining artifacts of civilisation. All the achievements and failings of humanity are here… We shape the city, and then it shapes us. Today, almost half the global population lives in cities.”

– John Reader, author of Cities

IBM Releases ``IBM and the Future of our Cities'' Podcast

– IBM Press Release 2005


Urban-Age.Net

Currently, the world’s top 30 cities generate 80% of the world’s wealth.The Urban Age

For the first time in history more than 50% the earth’s population live in cities - by 2050 it will be 75%The Endless City


Overview: Elements of Interest

Infrastructure & Environment(Technologies Deployed)

Individuals &Certified

Competences(Skills)

Institutions &Roles(Jobs)

Information, Quality-of-Life & Demographics(Careers)

Policies & InvestmentsRun-Transform-Innovate

Governance

Infrastructure(Technologies Deployed)


Competences(Skills)


Information, Quality-of-Life Demographics(Careers)



Competences(Skills)





Competences(Skills)





Competences(Skills)





Competences(Skills)





Competences(Skills)



City Ecosystem 1 City Ecosystem 2

Futur

eP

resent

Histor

y


Governance


Governance


Governance


Governance

FrameworksTheoriesModels

43

Universities connect information flows between city ecosystems

World as System of SystemsWorld (light blue - largest)Nations (green - large)Regions (dark blue - medium)Cities (yellow - small)Universities (red - smallest)

Cities as System of Systems-Transportation & Supply Chain-Water & Waste Recycling-Food & Products ((Nano)-Energy & Electricity-Information/ICT & Cloud (Info)-Buildings & Construction-Retail & Hospitality/Media & Entertainment-Banking & Finance-Healthcare & Family (Bio)-Education & Professions (Cogno)-Government (City, State, Nation)

Nations: Innovation Opportunities- GDP/Capita (level and growth rate)- Energy/Capita (fossil and renewable)

Developed MarketNations

(> $20K GDP/Capita)

Emerging MarketNations

(< $20K GDP/Capita)

IBM UP WW: Tandem Awards: Increasing university linkages (knowledge exchange interactions)

44

University Trend: More Locally Connected Research Centers

University sub-systemsDisciplines in Schools (circles)Innovation Centers (squares)

E.g., CMU Website (2009)“Research Centers:where it all happens – to solve real-world problems”

Disciplines in SchoolsAward degreesSingle-discipline focusResearch discipline problems

Innovation Centers (ICs)Industry/government sponsorsMulti-disciplinary teamsResearch real-world systems

D

D

D

D

D

D

Engine

ering

Schoo

l

Social

Scie

nces

,

Human

ities

Professional

Studies

Business School

water & waste transportation

health energy/grid

e-government

Science &

Mathem

atics

I-School

Design

food & supply chain


World Population & Holistic Product-Service System Scaling


Systems-Disciplines Matrix: Scope of Service ScienceSystems that focus on flows of things Systems that governSystems that support people’s activities

transportation & supply chain water &

waste

food &products

energy & electricity

building & construction

healthcare& family

retail &hospitality banking

& finance

ICT &cloud

education &work

citysecure

statescale

nationlaws

social sciences

behavioral sciences

management sciences

political sciences

learning sciences

cognitive sciences

system sciences

information sciences

organization sciences

decision sciences

run professions

transform professions

innovate professions

e.g., econ & law

e.g., marketing

e.g., operations

e.g., public policy

e.g., game theory and strategy

e.g., psychology

e.g., industrial eng.

e.g., computer sci

e.g., knowledge mgmt

e.g., stats & design

e.g., knowledge worker

e.g., consultant

e.g., entrepreneur

stake

holders Customer

Provider

Authority

Competitors

resources

People

Technology

Information

Organizations

change History

(Data Analytics)

Future(Roadmap)

value

Run

Transform(Copy)

Innovate(Invent)

Starting Point 1: Observing the Stakeholders (As-Is)

Starting Point 2: Observing their Resources & Access (As-Is)

Change Potential: Thinking (Has-Been & Might-Become)

Value Realization: Doing (To-Be)

disciplines

systems


Data: Why and how technology is changing jobs

-10

-5

0

5

10

15

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.

Expert Thinking

Complex Communication

Routine Manual

Non-routine Manual

Routine Cognitive

Why: Technology replaces many routinehuman activities (provider economics)


Our ambition is to reach K-12 students with Service Science & STEM: Smarter Planet: “The systems we live in, and the systems we are…”

“Imagine smarter systems, explain why better (service systems & STEM language)”STEM = Science, Technology, Engineering, and MathematicsSee 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

Challenge-based Project to Design Improved Service Systems

– K - Transportation & Supply Chain

– 1 - Water & Waste Recycling

– 2 - Food & Products (Nano)

– 3 - Energy & Electric Grid

– 4 – Information/ICT & Cloud (Info)

– 5 - Buildings & Construction

– 6 – Retail & Hospitality/Media & Entertainment (tourism)

– 7 – Banking & Finance/Business & Consulting

– 8 – Healthcare & Family Life/Home (Bio)

– 9 – Education /Campus & Work Life/Jobs & Entrepreneurship (Cogno)

– 10 – City (Government)

– 11 – State/Region (Government)

– 12 – Nation (Government)

– Higher Ed – T-shaped depth added, cross-disciplinary project teams

– Professional Life – Adaptive T-shaped life-long-learning & projects

Systemsthat focus onGoverning

Systemsthat focus on

Human Activities andDevelopment

Systemsthat focus onFlow of things


Smarter = Sustainable Innovation (reduce waste, expand capabilities)

Computational System

Building Smarter TechnologiesRequires investment roadmap

Service Systems: Stakeholders & Resources

1. People/Individuals 2. Technology & Environment/Infrastructure3. Shared Information4. Organizations/Institutions

connected by win-win value propositions

Building Smarter Universities & CitiesRequires investment roadmap


A major societal transformation is underway…

Driven by “The Death of Distance”- Cairncross, Economist (1997)

Manifesting in new forms of “Global Competition”– Friedman, The World is Flat (2005)

Characterized as a “Gathering Storm” by Americans– US National Academies (2005, 2007, 2011)

Characterized as the “Knowledge/Innovation/Interaction Age” – The accelerating creation and application of knowledge and competences to create

value for and/or co-create value with other entities

– Value from innovations

– Value from interactions

Characterized as the “Decade of Smart/Smarter Planet” by IBM– Instrumented, Interconnected, and Intelligent

51

Time

ECOLOGY

14BBig Bang

(NaturalWorld)

10KCities

(Human-MadeWorld)

sun (energy)

writing(symbols and scribes,

stored memoryand knowledge)

earth(molecules &

stored energy)

written laws(governance and

stored 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)

60

transistor(routine

cognitive work)

Where is the “Real Science” - mysteries to explain?In the many sciences that study the natural and human-made worlds…

Unraveling the mystery of evolving hierarchical-complexity in new populations…To discover the world’s architectures and mechanisms for computing non-zero-sum

Entity Architectures (ЄN) of nested, networked Holistic-Product-Service-Systems (HPSS)


A Game of Life: Essentials

Game = board with squares & rules– Infrastructure both Environmental and Technological

• PS (Physical Systems - Environment)– Natural Endowment (hidden & observable information)

• PSS (Physical Symbol Systems – Environment & Technology)– Biological PSS (observable information – DNA, RNA, proteins, etc.)– Technological PSS (observable information – states of system, bits, etc.)

Life = multiple generations of entities– Entities = SSE (Service System Entities)

• Individuals with Competencies & Life-Spans– Competencies (vary with age)– Life-Spans (vary with stage)

• Institutions with Roles & Rules– Roles (Competency-Levels and Pay-Levels)– Rules (Compliance-Levels and Tax-Levels)

Physical

Not-Physical

Rights No-Rights

2. Technology/EnvironmentalInfrastructure

4. SharedInformation

1. People/Individuals

3. Organizations/Institutions

1. Dynamically configure resources (4 I’s)


Life = Multiple Generations of Entities (200 years = 10 generations x 20 years)Pedagogy: Ten Social-Technological-Economic-Environmental-Political (STEEP) StagesThought Experiment: Binary-Board-Space (Rule: Toggles Each Generation)

1. Hunter-Gatherer Knowledge-Value Economy 1- 2K population (20 people/sq mile * 100 sq miles)

2. Transition Hunter-Gatherer Knowledge-Value Economy 2- 4K population (40 people/sq mile * 100 sq miles)

3. Agricultural Knowledge-Value Economy 1- 8K population (80 people/sq mile * 100 sq miles)

4. Transition Agricultural Knowledge-Value Economy 2- 16K population (160 people/sq mile * 100 sq miles)

5. Manufacturing Knowledge-Value Economy 1- 32K population (320 people/sq mile * 100 sq miles)

6. Transition Manufacturing Knowledge-Value Economy 2- 64K population (640 people/sq mile * 100 sq miles)

7. Service-Information Knowledge-Value Economy 1- 128K population (1,280 people/sq mile * 100 sq miles)

8. Transition Service-Information Knowledge-Value Economy 2- 256K population (2,560 people/sq mile * 100 sq miles)

9. Sustainable-Innovation Knowledge-Value Economy 1- 512K population (5,120 people/sq mile * 100 sq miles)

10.Transition Sustainable-Innovation Knowledge-Value Economy 2- 1024K population (10,240 people/sq mile * 100 sq miles)

11. And beyond!

10 miles

In Use

Recycle

Rule:Toggles EachGeneration


Game = Board with Squares & Rules Example: Possible STEEP Stages 9 & 10 (infrastructure, sustainable-innovation cities)

Imagine nested holistic product-service-systems entities…– 10 Continents/planet

– 10 Nations/continent

– 10 States/nation

– 10 Cities/state

– 4 Sectors/city (interconnect to others)

– 11 Systems/sector

Rules: Board-space toggles each generation– 20 years/generation

– New infrastructure/generation

World: Further Pedagogical Purposes– “World Simulator” benchmarking

– Search to accelerate learning • 10,000 city experiments/generation• Low skill/raw materials > Hi-talent/tech

– Each generation new outcomes• Talents (skills & jobs)• Technologies (recycle & rebuild)• Investments (script & performance)

Occupied(In Use)

Recycling(De-construction &

Re-construction)

waterfood/products

energyICT

R&H/M&E/C&Sfinancehealth

educationgovernance

transportation

buildings/family

Sector 1city

interconnect

11 Systems

Sector 2state

interconnect

Sector 3nation

interconnect

Sector 4continent

interconnect

Toggle each generation – 20 year

cycle


Entities = Life-Cycle Script Example: Possible STEEP Stages 9 & 10 (individuals, multiple generations of entities)

Children – Age 0-20– (Local & Global) Grow, Learn, & Have Fun

Parents – Age 20-40 (offspring 2)– (Next Local) Reproduce, Raise Children, & Build New “City” SET Stage

Grand-Parents – Age 40-60 (offspring 4)– (Local) Run the “City” You Built & Connect with Family

Great-Grand-Parents – Age 60-80 (offspring 8)– (Global) Travel the World, Enjoy Experiences, & Share Ideas

Great-Great-Grand-Parents – Age 80-100 (offspring 16)– (Local) Return, Reconnect, and Document History & Future Plans

Great-Great-Great-Grand-Parents – Age 100-120 (offspring 32)– (Local & Global) Celebrate, Tell Stories, Depart & Explore Further Realms


The Game of Life: Service Science Framework

The Game Board: A configuration of PS (Physical Systems), with interspersed PSS (Physical Symbol Systems) and SSE (Service System Entities).

– The SSE are PSS are PS

– The infrastructure is PS + PSS

• The PS have hidden information (state)• The PSS have observable information (state and read-write)

– The SSE use information to co-create value

• World model – information about the world (The Game Board)• Self model – information about self (SSE)• The SSE have a beginning and an end (life-cycle)• The SSE judge quality-of-life across their life-cycle

– The game is each generation of SSE try to improve quality-of-life, by improving the capabilities of the infrastructure (less waste, more support for SSE activities) and the capabilities of the SSE to co-create value (an SSE activity)

– The starting game board consists of PS with a few PSS, and the goal is to see how quickly and with how little energy and with how few types and tokens of PS, the PSS can become SSE and reconstruct a high level infrastructure and high quality of life and continuously improve at a sustainable pace.

• Processes of valuing are based on the above


Quality-of-Life measures continuously improveQuality-of-Life = Quality-of-Service + Quality-of-Jobs + Quality-of Investments-Returns

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)

20/10/10

0/19/0

2/7/42/1/1

7/6/11/1/0

5/17/27

1/0/2

24/24/1

2/20/247/10/3

5/2/2

3/3/10/0/0

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)”

58 © 2010 IBM CorporationIBM University Programs Worldwide (IBM UP)

What is service science? A service system? The ABC’s?

Economics & Law

Design/ Cognitive Science Systems

Engineering

OperationsComputer Science/

Artificial Intelligence

Marketing

“a service system isa human-made system to improve

provider-customer interactionsand value-cocreation outcomes,

studied by many disciplines,one piece at a time.”

“service science isthe transdisciplinary study of

service systems &value-cocreation”

The ABC’s:The provider (A)

and a customer (B)transform a target (C)


Service Systems Thinking: ABC’s

A. Service Provider

• Individual• Institution• Public or Private

A. Service Provider


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,

physical dimensions of• Information or Knowledge, symbolic dimensions

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,

physical dimensions of• Information or Knowledge, symbolic dimensions

B. Service Customer


B. Service Customer


Forms ofOwnership Relationship

(B on C)

Forms ofService Relationship(A & B co-create value)

Forms ofResponsibility Relationship

(A on C)

Forms ofService Interventions

(A on C, B on C)

Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a science of service systems. Computer, 40, 71-77.From… Gadrey (2002), Pine & Gilmore (1998), Hill (1977)

Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing, 68, 1 – 17.

“Service is the application ofcompetence for the benefitof another entity.”

Example Provider: College (A)Example Target: Student (C)Discuss: Who is the Customer (B)?- Student? They benefit…- Parents? They often pay…- Future Employers? They benefit…- Professional Associations?- Government, Society?

A B

C


Service Science: Conceptual Framework

Resources: Individuals, Institutions, Infrastructure, Information Stakeholders: Customers, Providers, Authorities, Competitors Measures: Quality, Productivity, Compliance, Sustainable Innovation Access Rights: Own, Lease, Shared, Privileged

Ecology(Populations & Diversity)

Entities(Service Systems, both Individuals & Institutions)

Interactions(Service Networks,

link, nest, merge, divide)

Outcomes(Value Changes, both

beneficial and non-beneficial)

Value Proposition (Offers & Reconfigurations/

Incentives, Penalties & Risks)

Governance Mechanism (Rules & Constraints/

Incentives, Penalties & Risks)

Access Rights(Relationships of Entities)

Measures(Rankings of Entities)

Resources(Competences, Roles in Processes,

Specialized, Integrated/Holistic)

Stakeholders(Processes of Valuing,

Perspectives, Engagement)

Identity(Aspirations & Lifecycle/

History)

Reputation(Opportunities & Variety/

History)

prefer sustainable non-zero-sum

outcomes,i.e., win-win

win-win

lose-lose win-lose

lose-win

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 system entities configure four types of resources

First foundational premise of service science:

– Service system entities dynamically configurefour types of resources

– Resources are the building blocks of entity architectures

Named resources are:– Physical or – Not-Physical– Physicist resolve disputes

Named resources have:– Rights or– No Rights– Judges resolve disputes

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

Physical

Not-Physical

Rights No-Rights

2. Technology/EnvironmentInfrastructure

4. SharedInformation/

SymbolicKnowledge



Formal service systems can contract to configure resources/apply competenceInformal service systems can promise to configure resources/apply competence

Trends & Countertrends (Balance Chaos & Order):(Promise) Informal <> Formal (Contract)

(Relationships & Attention) Social <> Economic (Money & Capacity)(Power) Political <> Legal (Rules)

(Evolved) Natural <> Artificial (Designed)(Creativity) Cognitive Labor <> Information Technology (Routine)

(Dance) Physical Labor <> Mechanical Technology (Routine)(Relationships) Social Labor <> Transaction Processing (Routine)

(Atoms) Transportation <> Communication (Bits)(Tacit) Qualitative <> Quantitative (Explicit)

(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

Second foundational premise of service science

– Service system entities calculate value from multiple stakeholder perspectives

– Value propositions are the building blocks of service networks

A value propositions can be viewed as a request from one service system to another to run an algorithm (the value proposition) from the perspectives of multiple stakeholders according to culturally determined value principles.

The four primary stakeholder perspectives are: customer, provider, authority, and competitor

– Citizens: special customers– Entrepreneurs: special providers– Parents: special authority– Criminals: special competitors

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

Model of competitor: Does it put us ahead? Can we stay ahead? Does it differentiate us from the competition?

Will we?(invest tomake it so)

StrategicSustainable Innovation(Marketshare)

4.Competitor(Substitute)

Model of authority: Is it legal? Does it compromise our integrity in any way? Does it create a moral hazard?

May we?(offer anddeliver it)

RegulatedCompliance(Taxes andFines, Quality of Life)

3.Authority

Model of self: Does it play to our strengths? Can we deliver it profitably to customers? Can we continue to improve?

Can we?(deliver it)

CostPlus

Productivity(Profit, Mission, Continuous Improvement, Sustainability)

2.Provider

Model of customer: Do customers want it? Is there a market? How large? Growth rate?

Should we?(offer it)

ValueBased

Quality(Revenue)

1.Customer

ValuePropositionReasoning

BasicQuestions

PricingDecision

MeasureImpacted

StakeholderPerspective(the players)

Value propositions coordinate & motivate resource access


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

Third foundational premise of service science

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

– Access rights are the building blocks of the service ecology (culture and information)

Access rights– Access to resources that are

owned outright (i.e., property)– Access to resource that are

leased/contracted for (i.e., rental car, home ownership via mortgage, insurance policies, etc.)

– Shared access (i.e., roads, web information, air, etc.)

– Privileged access (i.e., personal thoughts, inalienable kinship relationships, etc.)

service = value-cocreationB2BB2CB2GG2CG2BG2GC2CC2BC2G***

provider resourcesOwned OutrightLeased/ContractShared Access

Privileged Access

customer resourcesOwned OutrightLeased/ContractShared Access

Privileged Access

OO

SA

PA

LC

OO

LC

SA

PA

S AP C

Competitor Provider Customer Authority

value-proposition change-experience dynamic-configurations

(substitute)

time

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 interact to create ten types of outcomes

Four possible outcomes from a two player game

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

lose-win(coercion)

win-win(value-cocreation)

lose-lose(co-destruction)

win-lose(loss-lead)

Win

L

ose

Pro

vide

r

Lose WinCustomer

ISPAR descriptive model

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

L

Learning Systems(“Choice & Change”)

Exploitation(James March)

Exploration(James March)

Run/Practice-Reduce(IBM)

Transform/Follow(IBM)

Innovate/Lead(IBM)

Operations Costs

Maintenance Costs

Incidence Planning & Response Costs (Insure)

Incremental

Radical

Super-Radical

Internal

External

Interactions

“To bethe best,

learn fromthe rest”

“Doublemonetize,

internal winand ‘sell’ to

external”

“Try tooperateinside

thecomfortzone”

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.


Summary

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

Physical

Not-Physical

Rights No-Rights

2. Technology/EnvironmentalInfrastructure

4. SharedInformation



1. Dynamically configure resources (4 I’s)

Model of competitor: Does it put us ahead?

Will we?StrategicSustainable Innovation

4.Competitor/Substitutes

Model of authority: Is it legal?

May we?RegulatedCompliance3.Authority

Model of self: Does it play to our strengths?

Can we?CostPlus

Productivity2.Provider

Model of customer: Do customers want it?

Should we?Value Based

Quality1.Customer

ReasoningQuestionsPricingMeasureImpacted

StakeholderPerspective

2. Value from stakeholder perspectives

S AP C

3. Reconfigure access rights

4. Ten types of outcomes (ISPAR)

5. Exploit information & technology

6. Physical-Symbol Systems


Proposed Guidelines

Please send feedback to Wendy Murphy

– [email protected]

Help us devise better ways to visualize scope of service science

For use with:– Students– Faculty– Practitioners– Policy-makers– Scientists & Engineers– Government officials


Students for a Smarter Planet

YouTube - animated!!– http://www.youtube.com/watch?

v=P7bEyPrtFHM

and another– http://www.youtube.com/watch?v=WklJujtIip4

Tweet comments to…– @wendywolfie

Continuously Improving Product-Service Systems = Smarter Systems

– Simplify the message

– Provide advanced organizers


Service System Dynamics: Four Key Drivers of Change

Provider: Technology (Tech) & Sustainable Value-Cocreation Models– New technology to boost productivity & capacity (innovate)

– Use technology to perform routine manual, cognitive, and transactional work

– New relationship networks: Business models and new ventures (for-profit & non-profits)

Customer: Self Service– New self-service options to lower costs & expand choice (educate)

Authority: Rules– New rules to fix problems & achieve policy goals (regulate)

– Institutional diversity and governance of resource commons (Ostrom et. al.)

Competitors: Rankings– New rankings to guide decision-making & gain “valued” customers (differentiate)

– Hint: You want to be at the top of an independently ranked list of what customers are looking for…

– Especially for “valued” customers - calculating customer lifetime value (Rust et. al.)


Example Service System Re-Design: A College Course

Problem: What if a college course had…– Input: Student quality lower

– Process: Faculty motivation lower

– Output: Industry fit lower

Solution: Tech + Self-Service– E: -20% E-learning enrollment

pre-certification

– F. +10% Faculty interest tuning

– J. +10% on-the-Job skills tuning

After a decade the course may look quite differentService systems are learning systems: productivity, quality, compliance, sustainable innovation

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

Year 1: 20%

Year 2: 20%

Year 3: 20%

Year N: 20%

. . . . . . . .

E F J


42%6433 3 1.4Germany

37%261163 2.1Bangladesh

19%201070 1.6Nigeria

45%6728 5 2.2Japan

64%692110 2.4Russia

61%661420 3.0Brazil

34%391645 3.5Indonesia

23%7623 1 5.1U.S.

35%23176014.4India

142%29224925.7China

40yr ServiceGrowth

S%

G%

A %

Labor% WW

Nation

World’s Large Labor ForcesA = Agriculture, G = Goods, S = Service

20102010

CIA Handbook, International Labor OrganizationNote: Pakistan, Vietnam, and Mexico now larger LF than Germany

US shift to service jobs

(A) Agriculture:Value from harvesting nature

(G) Goods:Value from making products

(S) Service:Value from

IT augmented workers in smarter systemsthat create benefits for customers

and sustainably improve quality of life.

Data: Why the study of service systems matters (to nations)


Data: Why the study of service systems matters (to businesses)

SOFTWARE

SYSTEMS(AND FINANCING)

SERVICES

2010 Pretax Income Mix Revenue Growth by Segment

Services

Software

Systems

44%

17%

39%

IBM Annual Reports



StakeholderPriorities

Education

Research

Business

Government


Education

Research

Business

Government

Service Systems

Customer-provider interactions that enable value cocreation

Dynamic configurations of resources: people, technologies, organisations and information

Increasing scale, complexity and connectedness of service systems

B2B, B2C, C2C, B2G, G2C, G2G service networks

Service Systems





Service Science

To discover the underlying principles of complex service systems

Systematically create, scale and improve systems

Foundations laid by existingdisciplines

Progress in academic studies and practical tools

Gaps in knowledge and skills

Service Science






Develop programmes & qualifications


Service Innovation

Growth in service GDP and jobs

Service quality & productivity

Environmental friendly & sustainable

Urbanisation &aging population

Globalisation & technology drivers

Opportunities for businesses, governments and individuals

Service Innovation







Skills& Mindset

Skills& Mindset

Knowledge& Tools

Knowledge& Tools

Employment& Collaboration


Policies & Investment


Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015


Encourage an interdisciplinary approach


The white paper offers a starting point to -


The Birth of Service Science: A Framework for Progress(http://www.ifm.eng.cam.ac.uk/ssme/)

Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008)

Glossary of definitions, history and outlook of service research, global trends, and ongoing debate

1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions




Education

Research

Business

Government


Education

Research

Business

Government

Service Systems





Service Systems





Service Science






Service Science








Service Innovation







Service Innovation







Skills& Mindset

Skills& Mindset

Knowledge& Tools

Knowledge& Tools











The Birth of Service Science: IBM Centennial Icon of Progress(http://www.ifm.eng.cam.ac.uk/ssme/)

Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008)

Glossary of definitions, history and outlook of service research, global trends, and ongoing debate

1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions


What about advanced manufacturing?http://www.youtube.com/watch?v=nd5WGLWNllA


Rethinking “Product-Service Systems”

F

B

ServiceSystem Entity

Product-Service-System

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

SSE

B

F

F F

B B

ServiceBusiness

ProductBusiness

Front-Stage Marketing/Customer Focus

Back-Stage Operations/Provider Focus

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vitt

, T

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Pro

du

ctio

n-li

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pro

ach

to

se

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e.

HB

R.

e.g., IBM

e.g., Citibank

“Eve

ryb

od

y is

in s

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...

So

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thin

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wro

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…

Th

e in

du

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Learning MoreAbout Service Systems…

Fitzsimmons & Fitzsimmons– Graduate Students– Schools of Engineering & Businesses

Teboul– Undergraduates– Schools of Business & Social Sciences– Busy execs (4 hour read)

Ricketts– Practitioners– Manufacturers In Transition

And 200 other books…– Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs,

Aquilano; Davis, Heineke; Heskett, Sasser, Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter; Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels, Warf; Checkland, Holwell; Cooper,Edgett; Hopp, Spearman; Womack, Jones; Johnston; Heizer, Render; Milgrom, Roberts; Norman; Pine, Gilmore; Sterman; Weinberg; Woods, Degramo; Wooldridge; Wright; etc.

URL: http://www.cob.sjsu.edu/ssme/refmenu.asp

Reaching the Goal: How Managers Improve

a Services Business Using Goldratt’s

Theory of ConstraintsBy John Ricketts, IBM

Service Management:Operations, Strategy,

and Information Technology

By Fitzsimmons and Fitzsimmons, UTexas

Service Is Front Stage:Positioning services for

value advantageBy James Teboul, INSEAD

the future of cities and regions 20110929 v4

Technology

ibm smarter cities

tn transportation

tn healthcare

tn global system

smarter systems isnt

tn electricity

tn education

tn finance