Service Growth: Hidden wealth, too often overlooked and misunderstood …Or how service growth leads to the need for more T-shaped professionals, who can innovate complex technological, business, and societal systems, and help build a smarter planet instrumented + interconnected + intelligent (http://www.ibm.com/think)
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Service Growth:Hidden wealth, too often overlooked and misunderstood
…Or how service growth leads to the need for more T-shaped professionals, who can innovate complex
technological, business, and societal systems, and help build a smarter planet
B2B Service Projects: IT (data center, call centers) & business process outsourcing/reengineering, systems integration, organizational change, etc.
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 Service
Growth
S
%
G
%
A
%
Labor
%Nation
World’s Large Labor ForcesA = Agriculture, G = Goods, S = Service
20092009
The largest labor force migration in human history is underway, driven by global communications, business and technology growth, urbanization and
regional variations in labor and infrastructure costs and capabilities.
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 enhancing the
capabilities of people and their ability to interconnect and co-create value
Changing nature of work - away from farms and factories…
Service
Material
Information& Organization
11%
9%
30%
50%
Product
-Based on Uday Karmarkar, UCLA(Apte & Karmarkar, 2006)
US Gross Domestic Product
US GDP shift to service innovation: Hidden wealth (intangibles)
service = value cocreation = value from knowledge-based interactions of entities
Service Innovation Framework – Ten Types
“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.
Distribution of Educational Degrees in IBM (2004)
Services Software & Systems Research
Business
Social ScienceHumanities
Arts
ScienceEngineering
ScienceEngineering
Social ScienceHumanities
Arts
Business
ScienceEngineering
Changing Nature of Work: Increasing demand for expert thinking and complex communication
ICT tools augment human performance in these two key areas
-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.
Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT)
Expert Thinking
Complex Communication
Routine Manual
Non-routine Manual
Routine Cognitive
Increasing usage of descriptive terms
Need for T-Shaped Professionals: ICT-enabled deep expert-thinking and broad complex-communications
Science and Engineering
Math and Operations Research
Computer Science & Info. Systems
Industrial and Systems Engineering
Business and Management
Economics and Social Sciences
Business Anthropology and Design
Organizational Change & Learning
Broad
Dee
p
Broad across many…
Deep in at least one…
IBM SSME Website: How to create T-shaped people?
http://www.ibm.com/developerworks/spaces/ssme
How can SSME help us build a smarter planet?
Smart traffic systems
Smart water management
Smart energy grids
Smart healthcare
Smart food systems
Intelligent oil field technologies
Smart regions
Smart weather
Smart countries
Smart supply chains
Smart cities
Smart retail
SSME is the study of complex business and societal systems that serve customers…our world today is a diverse ecology of service systems interacting; we depend on them for life as we know it
More than ever before, quality-of-life is a function of quality-of-service from these interconnected systemshttp://www.ibm.com/think
UK Royal Society (July, 2009 – royalsociety.org)
Hidden Wealth: Science in Service Sector Innovation
• In the UK, 82% of STEM graduates find jobs in the service sector, and help drive a lot of innovation
– Financial Services– Business Services– Healthcare Services
• Technology underlies many “transformative” service innovations for business and society
• Open innovation is key
• 27 recommendations toincrease STEM-driven service innovations with afocus on design to integrate disciplines
Industry-University Knowledge Transfer Partnerships (KTP)
StakeholderPriorities
Education
Research
Business
Government
StakeholderPriorities
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
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 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
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
Develop programmes & qualifications
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
Growth in service GDP and jobs
Service quality & productivity
Environmental friendly & sustainable
Urbanisation &aging population
Globalisation & technology drivers
Opportunities for businesses, governments and individuals
Skills& Mindset
Skills& Mindset
Knowledge& Tools
Knowledge& Tools
Employment& Collaboration
Employment& Collaboration
Policies & Investment
Policies & Investment
Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015
Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015
Encourage an interdisciplinary approach
Encourage an interdisciplinary approach
The white paper offers a starting point to -
The white paper offers a starting point to -
“Succeeding through Service Innovation” Whitepaper: A Framework for Progress(http://www.ifm.eng.cam.ac.uk/ssme/)
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
2009 UK Royal Academy Report extends a 2008 UK Cambridge Report
The Good News: Global Action
• More and more nations are creating service innovation roadmaps (SIR) reports…– Finland, Netherlands,
Taiwan, UK, Ireland, Australia, South Korea, Philippines, Singapore, Germany, Egypt, Thailand, Vietnam, etc.
• More and more faculty are starting service science-related courses– Over 475 courses/programs
Myth Reality Reference(s)…Productivity is stagnant in service sector
Augmenting human and organizational performance with technology innovations, making hidden information accessible, or incentive alignment strategies are three of many ways to increases service sector performance
Baumol (post 2000)
Service sector jobs are low skill and low pay
Service sector leads in the creation of new high skill and high pay jobs
Herzenberg, Alic, Wial
Service sector is all labor, and little technology
Service sector is extremely knowledge and technology intensive
Royal Society Report
STEM (Science Technology Engineering and Math) graduates cannot find good jobs in the service sector
Service sector hires most STEM graduates in developed economies to improve and innovate service
Royal Society Report
Service quality is subjective and resists systematic improvement
Service quality can be scientifically studied and improved; Intimately, connected to accurate service productivity measurement
Schneider & Bowen; Gadrey & Gallouj
Service sector is too diverse to be studied systematically
There are just four broad types of service based on resource types; Service transforms entities or their property
Spohrer & Maglio; Hill
• Fitzsimmons & Fitzsimmons– Graduate Students– Schools of Engineering
“…by the end of their respective projects 80% of participating students reported that they had made a difference in their schoolsor communities by addressing their challenge.”
Help transform K-12 STEM Education
“Imagine a better service system, and use STEM language to explain why it is better”STEM = Science, Technology, Engineering, and Mathematics
See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning
• Challenge-based SSME Design of SP Service Systems
– K - Transportation
– 1 - Water & Waste Management
– 2 - Food & Global Supply Chain
– 3 - Energy & Electric Grid
– 4 - Info & Comm Tech (ICT) Infrastructure
– 5 - Buildings & Construction
– 6 - Banking & Finance
– 7 - Retail & Hospitality
– 8 - Healthcare
– 9 - Education (including Universities)
– 10 - Government (Cities)
– 11 - Government (Regions/States)
– 12 - Government (Nations)
– Higher Ed – Specific Service Systems
– Professional Life – Specific Service Systems
Smarter Planet (SP)Service Systems:
Quality of Life (QoL)depends directly on
Quality of Service (QoS)
Systemsthat govern
Systemsthat enable
healthy, wealthy,and wise people
Systemsthat move, store,harvest, process
Universities as “knowledge batteries” that power up regionsthey obtain, store, and provide needed knowledge to improve regions
• Knowledge of Systemsin Centers
– Industry/government sponsors
– Multi-disciplinary teams
– Research real-world systems
– E.g., CMU Website (2009)• “Research Centers:
where it all happens – to solve real-world problems”
• Knowledge of Disciplines in Schools
– Award degrees, create professionals
– Single-discipline focus
– Research key discipline problems
D
D
D
D
D
D
Engine
ering
Schoo
l
Social
Scie
nces
,
Human
ities
BusinessSchool
Sciences & Math
water & waste transportation
health energy/grid
e-government
I-School
Design
food & supply chain
Global SSME Design Lab Network• Annual
GlobalChallenges
– Example Transportation– Congestion Challenge– http://www.itsa.org/challenge/
• Best IdeasCould CreateNew Businesses
• Potential TelepresencePlay-offs with VCs for Advice
ProductivityProductivity
SustainableSustainableInnovationInnovation
RegulatoryRegulatoryComplianceCompliance
N a t i o n s
N a t i o n s I n d u s t
r i e s
I n d u s t
r i e s
QualityQuality
Two Half-day SSME Design Lab Network Virtual Summits:
West – August 11, 2009 – 16 Academic Leaders from 8 Universities in 6 locations
East – August 14, 2009 – 15 Academic Leaders from 7 Universities in 7 locations
Externally-OrientedService Projects90% B2B – Business to Business10% B2G – Business to Government(B2G is a growing percentage)(especially “Smarter Cities” projects)
Jobs and Competencies1. Model Systems
2. Connect/capture Data
3. Analyze, Improve
4. Optimize, Automate
5. Discipline Specialists
•Water Supply
•Transportation
•Energy, Electric Grid
•Cities, Buildings
•Healthcare
•Education/Government
General
Methods
& Techniques
Specific
Technology
Run Transform Innovate
SP Service
Systems
1. Synapsense, SensorTronics
2. Infosphere Streams, ILOG, COGNOS
3. WS, Tivoli, Rational, DB2, etc.
4. BAO, Green Sigma
Cross Industry
Competencies
Industry Specific
Competencies
Jobs
Systems Engineering/Analytics/BAO/SSME
Research fuels
Specialists
Consultant
Project Manager
Sales Architect
Operations
In sum, service science 101
• Understand and improve complex business and societal systems (service systems)– Related to systems science, management, engineering, and
design (added emphasis on increasing value cocreation interactions of ICT augmented people and organizations)
– Service systems are complex systems with people inside that serve customers, and improve through better use of information (ICT + analytics = learning curves for continuous improvement)
• T-Shaped Professionals have knowledge of…– Many disciplines, deep in at least one– Many systems, deep in at least one– Many projects, award winning on at least one– And someday, a CAD tool for service system solution design
http://www.ibm.com/think
Dr. James (“Jim”) C. Spohrer Director of IBM Global University Programs since 2009, Jim founded IBM's first Service Research group in 2003 at the Almaden Research Center with a focus on STEM (Science Technology Engineering and Math) for Service Sector innovations. He led this group to attain eight times return on investment with two IBM outstanding and nine accomplishment awards. Working with service research pioneers from many academic disciplines, Jim advocates for Service Science, Management, Engineering, and Design (SSMED) as an integrative extended-STEM framework for global competency development, economic growth, and advancement of science. In 2000, Jim became the founding CTO of IBM’s first Venture Capital Relations group in Silicon Valley. In the mid 1990’s, he lead Apple Computer’s Learning Technologies group, where he was awarded DEST (Distinguished Engineer Scientist and Technologist) status. Jim received a Ph.D. in Computer Science/Artificial Intelligence from Yale University and a B.S. in Physics from MIT.
Service Growth Service growth is too often overlooked and misunderstood. This talk tells the story of the growth of service (value cocreation interactions between entities) from an IBM perspective in three parts. Part one explains that service growth is hidden wealth, for IBM and the global economy, but to fully master service innovation requires overcoming myths and creating more T-shaped professionals. T-shaped professionals can help build a smarter planet. Part two explains that education is where we can start and that a new generation of adaptive innovators is needed, starting in K-12 and continuing into universities, with a focus on creating smarter cities. Part three describes a vision for the future and the need for a Computer-Aided Design (CAD) tool for T-shaped professionals to plan and implement more service innovation projects.
http://www.ibm.com/think
Backup Slides – Relation to other sciences & intro to terminology
Natural: Physics (Atoms)
Natural: Chemistry (Molecules)
Natural: Biology (Uni-Cell Organisms)
Natural: Biology (Multi-Cell Organisms)
Natural: Biology (Neural & Social Organisms)
Service: Anthropology (Informal Service System Entities)
Service: Economics & Law (Formal Service System Entities)
Service: Information (Globally Integrated Formal Service System Entities)
Sys
tem
s S
cien
ce
Exp
lain
Evo
luti
on
of
En
titi
es &
Inte
ract
ion
s
Gra
yA
rea Ser
vice
Sci
ence
Evolution of Natural Systems and Service Systems(US 7th Grade Science: How is a cell like a city? Both are a system of systems)
Ser
vice
Sci
ence
Nat
ura
l Sci
ence
Nat
ura
l Sci
ence
Service systems: Evolving complexityDynamic configurations of resources: human, technological, organizational, and information
• A. Informal Service Systems (Tacit Patterns)• B. Formal Service Systems (Explicit Symbols)
• 1. Social Systems– Human Systems/Sociotechnical Systems– Human Cultures
• 2. Technological Systems– Engineered Systems– Designed Systems
• 3. Economics Systems– Markets and Organizations– Firms or Hierarchies– Economic Institutions– Gray Markets
• 7. Information Systems– Linguistic Systems– Mathematical Systems– Physical Symbol Systems
• 8. Ecological and Geographic Systems– Nature’s Service and Systems– Evolved Spatial Systems
A.
B.
1.2.
3.
4.5.
6.
7.
8.
“The goal of science is to make the wonderful and complex understandable and simple – but not less wonderful.” – Herb Simon, The Sciences of the Artificial
Service systems are complex systems with people inside. – Claudio Pinhanez, IBM
Service Science:Toward A Smarter Planet
I. Foundations II. Disciplines III. Professions
Phenomenon:Value Cocreation
ResearchChallenges
Past Present FutureKnowledge Workersand other laborers
Historical Studies,Anthropology, Economics & Law, Social Sciences
Futures Studies,Mgmt of Innovation, Design,
Decision Sciences
Concepts & Questions
Scientists, Designers,Entrepreneurs:
Innovate
Tools & Methods
Work & Job CategoryEvolution
Spohrer, J. & Maglio, P. P. (2009). Service science: Toward a smarter planet. In W. Karwowski & G. Salvendy (Eds.), Introduction to service engineering.
Service science: Types of systems & disciplines/professions
transportationwater & waste
food & supply chainenergy & electricity
building & construction
healthcarebanking & finance
retail & hospitality
ICT education city state nation
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., governance
e.g., game theory
e.g., psychology
e.g., industrial eng.
e.g., computer sci
e.g., knowledge mgmt
e.g., statistics
e.g., knowledge worker
e.g., consultant
e.g., entrepreneur
stake
holders Customer
Provider
Authority
Competitors
resources
People
Technology
Information
Organizations
time History
Future
professions
Run
Transform
Innovate
Systems that move, store, harvest, process Systems that governSystems for healthy, wealthy, wise people
Core Concept: Service is value cocreation interactions of entities
Ecology(Populations & Diversity)
Entities(Service Systems)
Interactions(Service Networks)
Outcomes(Value Changes)
Value Proposition Based Interactions
Governance Mechanism Based Interactions
Access Rights(Relationships)
Measures(Rankings)
Resources(Roles)
Stakeholders(Perspectives)
win-win
lose-lose win-lose
lose-win
Value cocreationis a possible outcome
If disputes never arose, value-proposition-based interactions would suffice.Dynamics: Also must understand how entities evolve, learn and change over time.
Diverse types of entities:businesses, cities, etc.
1.People
2.Organizations
3.Technology/Environment
4.Shared
Information
Physical Not-Physical
Rights
NoRights
Formal service systems can contractInformal service systems can promise/commit
Discipline Focus Reference(s)Economics Service is a category for counting
output (productivity), jobs, businesses, exports, etc.
Triplett
Marketing Service is experienced by customers as part of an offering, and dependent on many factors including customer expectations and customer contact employees behaviors, to name two factors; Service design looks at customer interactions and experiences (“moments of truth”)
Bitner
Operations Service is a production processes that becomes complex because it depends on inputs from customers
Chase; Sampson
Industrial & Systems Engineering Every service originates from a system characterized by capacity limits (often modeled with queues)
Riordin; Fitzsimmons; Mandelbaum
Operations Research Service performance depends on coordinated actions of networks of entities/resources that can be modeled and optimized like supply chains
Lee
Computer Science Components with capabilities, such as web services; Architectures of such components, service-oriented architectures
Zhang
Information Systems Service systems are work systems. Alter
Psychology Service is an experience, shaped by many factors including waiting in queues
Chase
Question: What is… Proposal(s) Reference(s)Service? Value creation systems; co-
production; value constellationsNorman & Ramirez
Could there be a science of service?
Involves technology to improve productivity and quality
IBM
Proper perspective on service? Service-Dominant Logic Vargo & Lusch
Why under-studied? Too many myths, too few facts Chesbrough & Spohrer
Why now? Economic importance, and physical, information, social progression in needed science
Maglio
A service system? Dynamic resource configurations Spohrer
Work evolution in service? Z-model Spohrer & Maglio
Needed to make progress? National service innovation roadmaps reports
IfM & IBM
Complexity of service networks? Direct and indirect actors Basole & Rouse
What progress in education? SSME and related programs Hefley & Murphy
How do service systems interact? ISPAR Maglio
What is value? Value in use Vargo
Needed discipline integration? Time, stakeholder, resources Spohrer & Kwan
Service system evolution? Run-Transform-Innovate Spohrer & Maglio
Service system scaling? Digitally Connected Scaling Hsu
The problem will local optimization? Does not lead to global optimization Ricketts
STEM for service sector innovation? Transformative technologies UK Royal Society
Response to disasters? Humanitarian service science Haselkorn
Response to globalization? Intercultural service systems Medina-Borja
T-Shaped Professionals
Many disciplines Many systems
Deep in at least one discipline
Deep in at least one system
Many team-oriented service projects completed
ICT augments human performance: problem solving (deep) and communication (broad)
Hidden Wealth: Mostly invisible service (value
cocreation) interactions between entities
OO
SA
PA
LC
OO
LC
SA
PA
S AP C
Competitor Provider Customer Authority
(substitute)
Knowledge-based Interactions: (1) Division of Labor (specialization), (2) Augmenting human and organizational performance with technology innovations to improve quantity and quality of interactions, (3) Incentive alignment and mechanism design for improved access to shared resources, (4) More diverse and capable entities create more and better opportunities (capability integration and comparative advantage), (5) Improved dispute resolution (governing authorities), (6) More challenging environment (competitors), etc.
Stakeholder Entities in Service Interactions
49
Technology immersion of today’s students
Worldwide Mobile Subscribers
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Innovations in the consumer marketplace are driving rapid adoption of new technologies for communication, entertainment and learning
Over 4 billion individuals now have access to mobile technologies worldwide –
representing over 60% of the population
Social networking sites, virtual worlds,and mass collaboration technologies allow crowd sourcing to gain insights
Formal is a small fractionInformal is dominantSignposts show wall breaking down
“A large and growing percentage of engineers now work as contract technical experts, hiring out for a particular job at a particular company, then moving on when it is finished. They may be independent consultants or they may work for consulting firms, but either way they don't have the long-term stability that joining a traditional manufacturing firm used to provide.”
Lifelong Learning for Engineers: Riding the WhirlwindBy Ernest T. SmerdonIn The Bridge (a publication of the U.S. National Academy of Engineering)
Volume: 26, Number: 1/2 – Winter 1996
Specialists: Professional life as a series of service projects for customers
The 10 Hardest Jobs to Fill in America (6/09): #1 Engineer