city ecosystems 20110711 v1

© 2011 IBM Corporation

IBM University Programs Worldwide (IBM UP)

City Ecosystems of the 21st Century

Jim Spohrer IBM University Programs WorldwideFor Stanford Global Innovation Ecosystem SummitJuly 11, 2011, San Jose, [email protected]

2 © 2011 IBM CorporationIBM University Programs Worldwide (IBM UP)

Stanford MediaX Innovation Summit 2011 8:30 - 8:50 Welcome and Introductions

Martha Russell, Chuck House, Keith Devlin, Speakers and Moderators

8:50 - 10:15Environment and Infrastructure for InnovationModerator: Marguerite Hancock --Torger Reve, Knowledge-Based Norway--Jim Spohrer, City Ecosystems of the 21st Century --Norman Jacknis, Media Infrastructures for Regional Innovation, Cisco

10:15 - 10:45Posters, Camilla YuBreak and Networking

10:45 - NoonOrganizational Systems for InnovationModerator: Kaisa Still--John Roese, The Global Enterprise as an Innovation Ecosystem--Willem Jonker, EIT ICT Labs: A new European Approach to ICT Innovation Ecosystems--Yan Xu, Ubiquitous Innovation Ecosystems

Noon - 1:00 pmLunch and Networking

1:00 - 2:00Resource Networks - Employment and Investment in GreentechModerator: Martha Russell--Stephen Eichenlaub, The Corporate Investment Ecosystem--Deepak Jeevankumar, The Venture Capital Ecosystem--Greg Callman, Angels/Agencies: First Mover Advantages/Responsibilities

2:00 - 2:20Break and Networking

2:20 - 3:45Analyzing and Visualizing NetworksModerators: Jukka Huhtamaki, Neil Rubens--Kimihiko Iwamura, Anatomy of a Personal Network--Mathieu Bastian, Using Gephi to Show LinkedIn and Other Networks--Sean Gourley, Locating Strategic Opportunities with Technology Mapping--Rahul Basole, Network Perspectives: the Converging Mobile Sector3:45 - 4:30Knowledge Transfer in Innovation EcosystemsModerator: Martha Russell --Egils Milburg, Indicators for Shared Vision--Dan Wang, Indicators for Brain Drain and Brain Gain--Chenyang Xu, Insights from Global Scouting, Working with Universitie/Startups


IBM operates in 170 countries around the globe

IBM has 425,000 employees worldwide 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


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


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

8

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)


Data: And therefore, why higher education matters (to nations)% 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

10

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

11 © 2011 IBM CorporationIBM UP (University Programs) WW

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


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.”


Holistic Product-Service-Systems& Regional Innovation Ecosystems http://www.service-science.info/archives/1056

Examples: Nations, States, Cities, Universities, Luxury Hotels, Cruise Ships, Households

“Whole Service” Subsystems: Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.

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 (outsourcing limits, maximum re-cycling for sustainability)

Nation

State/Province

City/Region

HospitalMedicalResearch

UniversityCollegesK-12

LuxuryResortHotels

Family(household)

Person(professional)

For-profits

Non-profits

Start-UpsNew Ventures

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

SaaSPaaSIaaS

http://www.thesrii.org


World Population & Holistic Product-Service System Scaling


Systems-Disciplines Matrix: Advanced Organizer

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


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


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


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


Thank-You! Questions?

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

22

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)”


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


Data: Why education certification levels matter (to individuals)

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


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

Ba

sed

on

Le

vitt

, T

(1

97

2)

Pro

du

ctio

n-li

ne

ap

pro

ach

to

se

rvic

e.

HB

R.

e.g., IBM

e.g., Citibank

“Eve

ryb

od

y is

in s

erv

ice

...

So

me

thin

g is

wro

ng

…

Th

e in

du

stria

l wo

rld h

as

cha

ng

ed

fa

ste

r th

an

ou

r ta

xon

om

ies.

”.


Holistic Product-Service-Systems& Regional Innovation Ecosystems http://www.service-science.info/archives/1056

Examples: Nations, States, Cities, Universities, Luxury Hotels, Cruise Ships, Households

“Whole Service” Subsystems: Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc.

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 (outsourcing limits, maximum re-cycling for sustainability)

Nation

State/Province

City/Region

HospitalMedicalResearch

UniversityCollegesK-12

LuxuryResortHotels

Family(household)

Person(professional)

For-profits

Non-profits

Start-UpsNew Ventures

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

SaaSPaaSIaaS

http://www.thesrii.org


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

city ecosystems 20110711 v1

Education

cities cities

innovation moderator

ict innovation ecosystems

regional innovation

information flows

city ecosystems world

years of business innovation

endless city