Competing in a service economy 20120913 v1
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Competing in a service economy 20120913 v1

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service science, smarter planet, IBM, SwedBank, US, Sweden

service science, smarter planet, IBM, SwedBank, US, Sweden

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    Competing in a service economy 20120913 v1 Competing in a service economy 20120913 v1 Presentation Transcript

    • IBM University Programs worldwide, accelerating regional development (IBM Upward) Competing in a Service Economy IBM SSME Centennial Icon of Progress IBM Smarter PlanetDr. James (“Jim”) C. Spohrer, spohrer@us.ibm.comInnovation Champion and Director IBM UPward(University Programs worldwide, accelerating regional development)SwedBank Breakfast TalkThursday September 13, 2012 © 2012 IBM Corporation
    • IBM Almaden Research Center, Silicon Valley/San Jose, CA2 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Today’s Talk  Growth of Service Economy  Leading Through Connections – IBM CEO Survey 2012  Smarter Planet – Connecting with Cities & Their Universities Nano-Bio-Info-Cogno – Regional Economic Development & QoL  People and Change – Beyond just one perspective – Need T-shaped people (depth, breadth) – Pi-shaped people (deep in two areas, breadth) – M-shaped people (deep in three areas, breadth) – …. – True “trans-disciplinarians” – multiple perspectives3 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Economic Shift in National Economies World’s Large Labor Forces US shift to service jobs A = Agriculture, G = Goods, S = Service 2010 2010 Nation Labor A G S 40yr Service % WW % % % Growth (A) Agriculture: Value from China 25.7 49 22 29 142% harvesting nature India 14.4 60 17 23 35% (G) Goods: U.S. 5.1 1 23 76 23% Value from making products Indonesia 3.5 45 16 39 34% (S) Service: Brazil 3.0 20 14 Daryl Pereira/Sunnyvale/IBM@IBMUS, 66 61% Value from IT augmented workers in smarter systems Russia 2.4 10 21 69 64% that create benefits for customers and sustainably improve quality of life. Japan 2.2 5 28 67 45% Nigeria 1.6 70 10 20 19% Bangladesh 2.1 63 11 26 37% Germany 1.4 3 33 64 42% NationMaster.com, International Labor Organization Note: Pakistan, Vietnam, and Mexico now larger LF than Germany4 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Growth of Service Revenue at IBM 2010 Pretax Income Mix Revenue Growth by Segment SYSTEMS (AND FINANCING) 100 Revenue ($B)SOFTWARE 80 Services 17% 44% 60 40 Software 39% 20 Systems 0 SERVICES 82 88 94 98 10 04 06 07 08 09 20 19 19 19 19 20 20 20 20 20 Year IBM Annual ReportsWhat do IBM Service Professionals Do? Run IT & enterprise systems for customers,help Transform customer processes to best practices, and Innovate with customers.5 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Sweden: Global Brands (0.1/1.25/2.2)6 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • United States: Global Brands (4.5/26/30)7 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 8 © 2012 IBM Corporation
    • 1700+ face-to-face interviews Regions Sectors Performance North America Communications Outperformers Western Europe Distribution Peer Performers Japan Financial Services Underperformers Australia / New Zealand Industrial Growth Markets Public9 © 2012 IBM Corporation
    • External forces impacting the organization2004 2006 2008 2010 2012 1 1 1 1 1 Technology factors 2 2 2 2 2 People skills 3 3 3 3 3 Market factors 4 4 4 4 4 Macro-economic factors 5 5 5 5 5 Regulatory concerns 6 6 6 6 6 Globalization 7 7 7 7 7 Socio-economic factors 8 8 8 8 8 Environmental issues 9 9 9 9 9 Geopolitical factors10 © 2012 IBM Corporation
    • Technology is driving organizational change morethan ever before11 © 2012 IBM Corporation
    • CEOs create economic value by cultivatingconnections within and across three domains Organizational openness introduces new opportunities to create value through employee collaboration Differentiate through better data access, insight and translation into actions Partner for innovation, disrupt, and derive revenue from new sources12 © 2012 IBM Corporation
    • Outperformers are twice as good at deriving valuefrom data Underperformers Drawing insights from Outperformers information 26% % Access to data 54% 108 more 26% % Insights from data 54% 108 more 31% % Translate into actions 57% 84 more13 © 2012 IBM Corporation
    • So, how do you win the race to gather andconvert data into customer insight and action?  Look outside to complete the view Let “big data” reveal the  Connect pieces into profiles customer you never knew  Empower staff with predictive analysis  Listen at an individual level Listen lavishly, respond  Capture what employees see and hear with focus  Respond with relevance and speed  Mobile “changes everything” Be where your customers  Blend the physical and digital expect you to be  Offer value that stands out14 © 2012 IBM Corporation
    • Example: Leading Through Connections with… Universities Collaborate with IBM Research to Design Watson for the Grand Challenge of Jeopardy ! Assisted in the development of the Open Pioneered an online natural language Advancement of Question-Answering question answering system called START, Initiative (OAQA) architecture and which provided the ability to answer questions methodology with high precision using information from semi-structured and structured information repositories Provided technological advancementenabling a computing system to remember the Worked to extend thefull interaction, rather than treating every Worked on a visualization component to capabilities of Watson, with aquestion like the first one - simulating a real visually explain to external audiences the focus on extensive commondialogue massively parallel analytics skills it takes for sense knowledge the Watson computing system to break down a question and formulate a rapid and accurate response to rival a human brainExplored advanced machine learningtechniques along with rich textrepresentations based on syntactic andsemantic structures for the Watson’s Focused on large-scale Worked on information information extraction,optimization retrieval and text search parsing, and knowledge technologies inference technologieshttp://w3.ibm.com/news/w3news/top_stories/2011/02/chq_watson_wrapup.html 15 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • What does IBM do?16 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Most people say, “IBM makes computers”17 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • What IBM really does is help build a Smarter Planet… Smarter = System of systems that work better together Service = Applying knowledge to co-create value18 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • The need and opportunity exists…  Big Four Crises – Financial – Healthcare – Education – Government19 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Smarter Planet = Improve Quality-of-Life INSTRUMENTED INTERCONNECTED INTELLIGENT We now have the ability People, systems and We can respond to changes to measure, sense and objects can communicate quickly and accurately, see the exact condition and interact with each and get better results of practically everything. other in entirely new ways. by predicting and optimizing for future events. PRODUCTS IT NETWORKS COMMUNICATIONSWORKFORCE SUPPLY CHAIN TRANSPORTATION BUILDINGS20 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • California Human Development Report 2011:Measuring quality-of-life…. http://www.measureofamerica.org/docs/APortraitOfCA.pdf21 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • What improves Quality-of-Life? Service System Innovations * = US Labor % in 2009. A. Systems that focus on flow of things that humans need (~15%*) 20/10/10 1. Transportation & supply chain 2/7/4 2. Water & waste recycling/Climate & Environment 2/1/1 7/6/1 3. Food & products manufacturing 1/1/0 4. Energy & electricity grid/Clean Tech 5/17/27 5. Information and Communication Technologies (ICT access) B. Systems that focus on human activity and development (~70%*) 1/0/2 6. Buildings & construction (smart spaces) (5%*) 24/24/1 7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*) 2/20/24 7/10/3 8. Banking & finance/Business & consulting (wealthy) (21%*) 9. Healthcare & family life (healthy) (10%*) 5/2/2 10. Education & work life/Professions & entrepreneurship (wise) (9%*) 3/3/1 C. Systems that focus on human governance - security and opportunity (~15%*) 0/0/0 11. Cities & security for families and professionals (property tax) 1/2/2 12. States/regions & commercial development opportunities/investments (sales tax) 13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) 0/19/0 Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities “61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”22 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • T-shaped professionalsdepth & breadth Many cultures Many disciplines Many systems (understanding & communications) BREADTH Deep in one discipline Deep in one system Deep in one culture DEPTH (analytic thinking & problem solving)2323 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Two Generations of Change: Past & Future Born: 1988 Born: 2012 Graduated College: 2011 Enters College: 203024 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Transportation: Self-driving cars Steve Mahan: Test “Driver”25 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Water26 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Manufacturing Ryan Chin: Urban Mobility27 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Energy28 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 ICT29 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Buildings: Recycled to be stronger, safer, cleaner China Broad Group: 30 Stories in 15 Days30 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Retail & Hospitality31 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Finance & Business32 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Health33 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 Education: Watch one, do one, teach one…34 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 GovernmentFour measures  Innovativeness  Equity – Improve weakest link  Sustainability  Resiliency35 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 2030 and Beyond…. Government36 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • 37 IBM University Programs worldwide, accelerating regional development (IBM UPward) © 2012 BM Corporation
    • 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 yesterdays 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 NYU38 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • In Conclusion: Two Books To Help Us All Prepare To Change39 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Thank-You! Questions? “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.” – GeddesDr. James (“Jim”) C. SpohrerInnovation Champion &Director, IBM University Programs worldwide accelerating regional development (IBM UPward)spohrer@us.ibm.com 40 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • IBM’s Leadership Change IBM has 426,000 employees worldwide 2011 Financials 22% of IBM’s revenue  Revenue - $ 106.9B in Growth Market countries; growing at  Net Income - $ 15.9B 11% in 2011  EPS - $ 13.44  Net Cash - $16.6B More than 40% of IBM’s workforce conducts business away from an office 55% of IBM’s WorkforceIBM operates in 170 is New to the company incountries around the globe the last 5 years Number 1 in patent generation for 19100 Years of Business consecutive years ;& Innovation in 2011 6,180 US patents awarded in 2011 The Smartest Machine On Earth 9 time winner of the 5 Nobel President’s National Laureates Medal of Technology & Innovation - latest “Let’s Build a Smarter award for Blue Gene Planet" Supercomputer 41 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • The New Normal: Smarter Systems Service Systems: Stakeholders & Resources 1. People 2. Technology 3. Shared Information 4. Organizations Computational System connected by win-win value propositions Smarter Technology Smarter Buildings, Universities, Cities Requires investment roadmap Requires investment roadmap42 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • University: Four Missions Nation Knowledge State/Province – 1. Transfer (Teaching) City/Metro For-profits U-BEE – 2. Creation (Research) Job Creator/Sustainer – 3. Application (Benefits) Cultural & University Hospital Medical Conference College • Commerce/Entrepreneurship Hotels K-12 Research • Governance/Policymaking Worker Family – 4. Re-Integration (Challenge) Non-profits (professional) (household) • Innovativeness, Equity • Sustainability, Resilience Nested, Networked Holistic Service Systems – Flows Third Mission (Apply to Create Value) – Development is about U-BEEs = – Governance University-Based Entrepreneurial Ecosystems 43 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Regional Competitiveness and U-BEEs:Where imagined possible worlds become observable real worldshttp://www.service-science.info/archives/1056Innovations NationUniversities/ “The future is already State/Province here (at universities),Regions City/RegionCalculus (Cambridge/UK) For-profits it is just not evenlyPhysics (Cambridge/UK) U-BEEComputer Science (Columbia/NY) distributed.”Microsoft (Harvard/WA) Job Creator/SustainerYahoo (Stanford/CA) Hospital Cultural & UniversityGoogle (Stanford/CA) Medical Conference CollegeFacebook (Harvard/CA) Research Hotels K-12 “The best way to Non-profits Worker (professional) Family (household) predict the future is to (inspire the next generation of students to) build it better.” U-BEEs = University-Based Entrepreneurial Ecosystems, City Within City 44 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Cities: land-population-energy-carbon Carlo Ratti: Senseable Cities45 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Measuring Impact SSME: IBM Icon of Progress & IBM Research Outstanding Accomplishment – Internal 10x return: CBM, IDG, SDM Pricing & Costing, BIW COBRA, SIMPLE, IoFT, Fringe, VCR • Key was tools to model customers & IBM better • Also tools to shift routine physical, mental, interactional & identify synergistic new ventures • Alignment with Smarter Planet & Analytics (instrumented, interconnected, intelligent) • Alignment with Smarter Cities, Smarter Campus, Smarter Buildings (Holistic Service Systems) – External: More than $1B in national investments in Service Innovation activities – External: Increase conferences, journals, and publications – External: Service Science SIGs in Professional Associations – External: Course & Program Guidelines for T-shaped Professionals, 500+ institutions – External: National Service Science Institutions, Books & Case Studies (Open Services Innovation) Service Research, a Portfolio Approach – 1. Improve existing offerings (value propositions that can move the needle on KPI’s) – 2. Create new offerings (for old and new customers) – 3. Improve outcomes insourcing, outsourcing, acquisitions, divestitures (interconnect-fission-fusion) – 4. For all three of the above, improve customer/partner capabilities (ratchet each other up) – 5. For all four of the above, increase patents and service IP assets (some donated to open forums) – 6. For all five of the above, increase publications and body-of-knowledge (professional associations)46 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • Who I am  Director IBM Global University Programs since 2009 – Global team works with 5000 university world wide (http://www.ibm.com/university) – Research (Awards), Readiness (Skills), Recruiting, Revenue, Responsibility – Transform “IBM on Campus” brand awareness (“Smarter Planet/Smarter Cities”) – Create “Urban Service System” Research Centers & U-BEEs  Founding Director of IBMs first Service Research group from 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)  Other background (late 90’s and before) – Founding CTO of IBM’s Venture Capital Relations group in Silicon Valley – Apple Computer’s (Distinguished Engineer Scientist and Technologist) award (90’s) – Ph.D. Computer Science/Artificial Intelligence from Yale University (80’s) – B.S. in Physics from MIT (70’s)47 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
    • What is the future? We can imagine many possibilities… Kurzweilai.net48 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation