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Dr. James (“Jim”) C. [email protected] Champion and Director, IBM University Programs WWRIT Service Innovation Event, Rochester, NY, USA, April 14th, 2011
– IBM (Overview, Centennial, Watson, Smarter Planet)
Response: Service Science Priorities– Cambridge University Report (2007, 2008, 2011)
– UK Royal Society Report (2009)
– Arizona State University Report (2010)
– Handbook of Service Science (2011)
– Open Services Innovation (2011)
Evolution: Regional Innovation Ecosystems– What is a “Smarter Planet”? “Quality of Life” Improvement?
• Quality of Life: Our growing dependence on networks of interconnected service systems
– Local optimization does not equal global optimization– Local problems can cascade into global significance– Global competition for talent (“vote with feet”)
– How are Cities & Universities Linked? What Jobs & Skills?
– How to visualize Service Science? Systems & Knowledge?
– What is a Holistic Service System (HSS)? Value-CoCreation (VCC)?
– Where is the “Real Science”? VCC Architectures & HSS
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
One approach is to enhance GDP with other objective factors such as inequality, leisure and life expectancy. In a paper presented Saturday at the American Economic Association meeting, Stanford economists Peter Klenow and Charles Jones found that doing so can make a big difference.
Making everybody work 120 hours a week could radically boost a country's GDP per capita, but it wouldn't make people happier. Removing pollution limits could boost GDP per hour worked, but wouldn't necessarily lead to a world we'd want to live in.
Definition: A service system that can support its primary populations, independent of all external service systems, for some period of time, longer than a month if necessary, and in some cases, indefinitely
Balance independence with interdependence, without becoming overly dependent
Nation
State/Province
City/Region
HospitalMedicalResearch
UniversityCollegesK-12
LuxuryResortHotels
Family(household)
Person(professional)
For-profits
Non-profits
Start-Ups
~25-50% of start-ups are newIT-enabled service offerings
SaaSPaaSIaaS
A Day Made of Glass: Corninghttp://www.youtube.com/watch?v=w12B02eJpaM&feature=fvst
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.”
University Trend: “Sister Campuses” (People Flows)
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
32
City Trend: “Sister Cities” (People Flows)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)
How to visualize service science? The Systems-Disciplines MatrixSystems that focus on flows of things Systems that governSystems that support people’s activities
Corning: A Day Made of Glasshttp://www.youtube.com/watch?v=6Cf7IL_eZ38
46
Time
ECOLOGY
14BBig Bang
(NaturalWorld)
10KCities
(Human-MadeWorld)
Sun
writing(symbols and scribes)
Earth
written laws
bacteria(uni-cell life)
sponges(multi-cell life)
money(coins)
universities
clams (neurons)trilobites (brains)
printing press (books)steam engine200M
bees (socialdivision-of-labor)
60
transistor
Where is the “Real Science”?In the interdisciplinary sciences that study the natural and human-made worlds… Unraveling the mystery of evolving hierarchical-complexity in new populations…To discover the world’s structures and mechanisms for computing non-zero-sum
Value-CoCreation (VCC) Architectures & Holistic Service Systems (HSS)
Dr. James (“Jim”) C. SpohrerDirector, IBM University Programs (IBM UP) [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
Value depends on the capabilities a system has to survive and create beneficial change in its environment.
Taking advantage of the service another system offers means incorporating improved capabilities.
Value can be defined as system improvement in an environment.
All ways that systems work together to improve or enhance one another’s capabilities can be seen as being value creating.
Vargo, S. L., Maglio, P. P., and Akaka, M. A. (2008). On value and value co-creation: A service systems and service logic perspective. European Management Journal, 26(3), 145-152.
Service involves at least two entities applying competences and making use of individual and shared resources for mutual benefit.
We call such interacting entities service systems.
A. Service Provider
• Individual• Organization• Public or Private
C. Service Target: The reality to be transformed or operated on by A, for the sake of B
• People, dimensions of• Business, dimensions of• Products, goods and material systems• Information, codified knowledge
B. Service Client
• Individual• Organization• Public or Private
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)
Gadrey, J. (2002). The misuse of productivity concepts in services: Lessons from a comparison between France and the United States. In J. Gadrey & F. Gallouj (Eds). Productivity, Innovation, and Knowledge in Services: New Economic and Socio-economic Approaches. Cheltenham UK: Edward Elgar, pp. 26 – 53.
Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a science of service systems. Computer, 40, 71-77.
Transportation (Atoms) <> Communication (Bits)Qualitative (Tacit) <> Quantitative (Explicit)
First foundational premise of service science
Service system entitiesdynamically configure
four types of resources
The named resource isPhysical
orNot-Physical
(physicists resolve disputes)
The named resource hasRights
orNo-Rights
(judges resolve disputeswithin their jurisdictions)
Physical
Not-Physical
Rights No-Rights
2. Technology
4.. SharedInformation
1. People
3. Organizations
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
value principles.The four primary stakeholderperspectives are: customer,
provider, authority, and competitor
StakeholderPerspective(the players)
MeasureImpacted
PricingDecision
BasicQuestions
ValuePropositionReasoning
1.Customer Quality(Revenue)
ValueBased
Should we?(offer it)
Model of customer: Do customers want it? Is there a market? How large? Growth rate?
2.Provider Productivity(Profit)
CostPlus
Can we?(deliver it)
Model of self: Does it play to our strengths? Can we deliver it profitably to customers? Can we continue to improve?
3.Authority Compliance(Taxes andFines)
Regulated May we?(offer anddeliver it)
Model of authority: Is it legal? Does it compromise our integrity in any way? Does it create a moral hazard?
4.Competitor(Substitute)
Sustainable Innovation(Marketshare)
Strategic Will we?(invest tomake it so)
Model of competitor: Does it put us ahead? Can we stay ahead? Does it differentiate us from the competition?
Value propositions coordinate & motivate resource access
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 entitiesreconfigure access rights to
resources by mutually agreed tovalue propositions
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.)
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
Premises of service science: What service systems do
Service system entitiesdynamically configure (transform)
four types of resources
Service system entitiescalculate value from multiple
stakeholder perspectives
Service system entitiesreconfigure access rights
to resources by mutually agreed to value propositions
S AP C
Physical
Not-Physical
Rights No-Rights
2. Technology
4.. SharedInformation
1. People
3. Organizations
StakeholderPerspective
MeasureImpacted
Pricing Questions Reasoning
1.Customer Quality Value Based
Should we? Model of customer: Do customers want it?
2.Provider Productivity CostPlus
Can we? Model of self: Does it play to our strengths?
3.Authority Compliance Regulated May we? Model of authority: Is it legal?
4.Competitor Sustainable Innovation
Strategic Will we? Model of competitor: Does it put us ahead?
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
Why 13 types of service systems? K-12 STEM and the human-made world
“Imagine a better service system, and use STEM language to explain why it is better”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 (Bio)
– 9 - Education & Work Life/Jobs & Entrepreneurship (Cogno)
– 10 – City (Government)
– 11 – State/Region (Government)
– 12 – Nation (Government)
– Higher Ed – T-shaped teamwork, deep & broad education
– Professional Life – T-shaped teamwork, series of projects
Fun: 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
Priority 1: Urban Sustainability & Service Innovation Centers
A. Research: Holistic Modeling & Analytics of Service SystemsModeling and simulating cities will push state-of-the-art capabilities for planning interventions in
complex system of service systems
Includes maturity models of cities, their analytics capabilities, and city-university interactions
Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system
Real-world data and advanced analytic tools are increasingly available
B. Education: STEM (Science Tech Engineering Math) Pipeline & LLLCity simulation and intervention planning tools can engage high school students and build STEM
skills of the human-made world (service systems)
Role-playing games can prepare students for real-world projects
LLL = Life Long Learning
C. Entrepreneurship: Job CreationCity modeling and intervention planning tools can engage university
students and build entrepreneurial skills
Grand challenge competitions can lead to new enterprises