Isss service science reframing skeleton and progress 20120717 v3

IBM University Programs worldwide, accelerating regional development (IBM Upward) Service Science Update: Reframing the Skeleton & Reframing Progress With Universities IBM Centennial Icon of Progress Smarter Planet T-shaped People Alexandria/Egypt-Japan University of Science & TechnologyDr. James (“Jim”) C. Spohrer, spohrer@us.ibm.comInnovation Champion and Director IBM UPward(University Programs worldwide, accelerating regional development)International Society of Systems SciencesSan Jose State University, San Jose, CA, USA, Tuesday July 17, 2012 © 2012 IBM Corporation

Today’s Talk Introduction: The Big Picture & Systems Thinking – Real World Systems (RWS): Natural Systems & Service Systems – Some Reading: Gallis, Normann, Deacon, etc. – Policymaking & Universities as Essential Institutions Reframing the Skeleton (Boulding) – General Phenomena/Ecology – Hierarchy Complexity/Evolution – Specialization/Academic Silos – Slowing Progress Reframing Progress With Universities – Bounded Rationality & Knowledge Burden – {Innovativeness, Equity, Sustainability, Resilience} – University as “Holistic Product-Service Systems” • Rehearsing Rebuilding Society • Rewinding The Tape of Life (Gould)2 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

~14B Evolution of Natural Systems & Service Systems ~10KBig Bang Cities (Natural Unraveling the mystery of evolving hierarchical-complexity in new populations… (Human-Made Time World) To discover the world’s architectures and mechanisms for computing non-zero-sum World) writing (symbols and scribes, stored memory and knowledge) written laws ECOLOGY (governance and stored control) sun (energy) money earth (governed (molecules & transportable valuestored energy) stored value, “economic energy”) bacteria(single-cell life) bees (social sponges transistor division-of-labor)(multi-cell life) (routine cognitive work) universities (knowledge workersclams (neurons) printing press (books 3 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporationtrilobites (brains) 200M 60 steam engine (work)

Our World and Us Ha rt sP Pa art H as Smarter Service Systems = Natural Systems Complex Systems Service Systems Planetary Systems Serve Customers Better That water, electricity, transportation, education, healthcare, etc. Be ts n ef i n ef i ts Be Carbon Capabilities, Footprint Experience (Choices) (Choices) Quality of Life5 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Normann: Reframing Business  Reframing Business: When the Map Changes the Landscape  Richard Normann  Value-Creating Systems6 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Deacon: Incomplete Nature  Incomplete Nature: How Mind Emerged From Matter  Terrence W. Deacon  Thermodynamics -> Teleodynamics (purpose- driven system dynamics)  Purpose = map7 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Spohrer et al: Service Science and Policymaking Three Frameworks for Service Research: Exploring Multilevel Governance in Nested, Networked Systems Jim Spohrer, Paolo Piciocchi, Clara Bassano Nested, Networked Systems8 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

University: Three Missions Nation Knowledge State/Province City/Metro – Transfer (Teaching) For-profits U-BEE Job Creator/Sustainer – Creation (Research) Cultural & Conference University Hospital Medical College Hotels Research K-12 – Application (RWS Impact) Worker Family • Commerce/Entrepreneurship Non-profits (professional) (household) • Governance/Policymaking Nested Holistic Systems – Flows Third Mission (Apply to Create Value) – Development is about U-BEEs = University-Based Entrepreneurial – Governance Ecosystems9 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

I am nested in at least 10 systemsLevel AKA ~No. People ~No. Entities Example0. Individual Person 1 10,000,000,000 Jim1. Family Household 10 1,000,000,000 Spohrer’s2.Neighborhood Street 100 100,000,000 Kensington3. Community Block 1000 10,000,000 Bird Land4. Urban-Zone District 10,000 1,000,000 SC Unified5. Urban-Center City 100,0000 100,000 Santa Clara6.Metro-Region County 1,000,000 10,000 SC County7. State Province 10,000,000 1,000 CA8. Nation Country 100,000,000 100 USA9. Continent Union 1,000,000,000 10 NAFTA10. Planet World 10,000,000,000 1 UN11 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

8 levels of living systems (Miller, 1972)Cell ... living systems theory (LST) asserts that all of the great variety of livingOrgan entities that evolution has producedOrganism are complexly structured open systems.Group They maintain within their boundaries their thermodynamically improbableOrganization energetic states by continuous interactions with their environments.Community Inputs and outputs of both matter- energy and information are essential for living systems. The total inputs are lower in entropy and higher in information than the total outputs.Society [....] The eight levels of living systems evolved by a process of fray-out (see Figure 1) in which the larger higher-Supranational level systems developed increasingly complex components in eachSystem subsystem than those below them in the hierarchy of living systems. [....] Fray-out can be likened to the unraveling of a ships cable12 Service Systems, Natural Systems April 20, 2012 © 2012 David Ing

General System Theory:The Skeleton of Science (Boulding, 1956) Two possible approaches to organization of general systems theory suggest themselves, which are to be thought of as complementary rather than competitive, or at least as two roads each of which is worth exploring. The first approach is The second approach is to look over to arrange the empirical universe and the empirical fields pick out in a hierarchy of complexity certain general phenomena of organization of which are found their basic “individual” or in many different disciplines, unit of behavior, and and to seek to build up try to develop an abstraction general theoretical models appropriate to each. relevant to those phenomena.13 Service Systems, Natural Systems April 20, 2012 © 2012 David Ing

General System Theory:The Skeleton of Science (Boulding, 1956) Two possible approaches The first approach ... The second approach ... pick out in a hierarchy of complexity certain general phenomena ... of organization ... Some examples of the first approach .... … the interaction of population can be discussed in terms of … may competitive, complementary or parasitic relationships ... ultimately lead to … “behavior” of each individual is “explained” by the structure and something arrange of the lower individuals of which it is composed, or by like a certain principles of equilibrium or homeostasis according to general which “states” of the individual are “preferred”. field Some growth phenomena can be dealt with in terms of relatively theory of simple population models .... At the more complex levels, dynamics structural problems become dominant and the complex and interrelationships between growth and form are the focus of interaction interest. Communication and information processes … are unquestionably . essential in the development of organization, both in the biological and social world. This, however,14 Service Systems, Natural Systems April 20, 2012 is © 2012 David Ing a long

General System Theory:The Skeleton of Science (Boulding, 1956) Two possible approaches The first approach ... The second approach ... pick out in a hierarchy of complexity certain general phenomena ... of organization ... … more systematic, leading to a “system of systems”.(I) … first level … static structure … level of frameworks. One(ii) … simple dynamic system with predetermined, necessary motions … level of advant clockworks. age …(iii) … control mechanism or cybernetic system … level of the thermostat. it gives us(iv) … “open system,” or self-maintaining structure … life begins to differentiate some itself from not-life … level of the cell. idea of(v) … genetic-societal level … typified by the plant. the(vi) … “animal” level, characterized by increased mobility, teleological behaviour present and self-awareness. gaps in(vii) … “human” level … self-consciousness … different from mere awareness. both theoreti(viii) … symbolic images and behavior based on them … social organization. cal and(ix) … transcendental systems … ultimates and absolutes and the inescapable empiric unknowables ... al15 Service Systems, Natural Systems April 20, 2012 knowled © 2012 David Ing ge.

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)1616 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Knowledge: Individuals & Society Herbert Simon: Ben Jones: Bounded Rationality Burden of Knowledge18 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Sustainability/Resilience & Innovation: Local-p global-i supply chains World as System of Systems World (light blue - largest) Nations (green - large) States (dark blue - medium) Cities (yellow - small) Universities (red - smallest) Cities as System of Systems Developed Market -Transportation & Supply Chain Nations -Water & Waste Recycling (> $20K GDP/Capita) -Food & Products ((Nano) -Energy & Electricity -Information/ICT & Cloud (Info) -Buildings & Construction Emerging Market -Retail & Hospitality/Media & Entertainment Nations -Banking & Finance (< $20K GDP/Capita) -Healthcare & Family (Bio) -Education & Professions (Cogno) -Government (City, State, Nation) Nations: Innovation Opportunities - GDP/Capita (level and growth rate) - Energy/Capita (fossil and renewable)23 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Universities Worldwide Accelerating Regional Development “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.”24 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 & Environment2/1/1 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 (wealthy) (21%*) 8. Banking & finance/Business & consulting 5/2/2 9. Healthcare & family life (healthy) (10%*) 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) 0/19/0 13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) 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)”26 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Systems-Disciplines Framework: Depth & Breadth systems Systems that focus on flows of things Systems that support people’s activities Systems that govern transportation & ICT & retail & healthcare food & education city state nation disciplines supply chain water & energy products & electricity cloud building & hospitality banking & family &work secure scale laws waste construction & finance behavioral sciences Customerstakeholders e.g., marketing Provider management sciences e.g., operations Observe Stakeholders (As-Is) political sciences Authority e.g., public policy learning sciences Competitors e.g., game theory and strategy cognitive sciences People e.g., psychologyresources system sciences Technology e.g., industrial eng. information sciences Observe Resource Access (As-Is) Information e.g., computer sci organization sciences Organizations e.g., knowledge mgmt History social scienceschange e.g., econ & law (Data Analytics) decision sciences Imagine Possibilities (Has-Been & Might-Become) Future e.g., stats & design (Roadmap) run professions Run e.g., knowledge worker Transformvalue (Copy) transform professions e.g., consultant Realize Value (To-Be) Innovate innovate professions (Invent) e.g., entrepreneur 27 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 30 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

What is service science? A service system? The ABC’s? Design/ Cognitive Science Systems Engineering “service science is “a service system is athe transdisciplinary study of human-made system to improve service systems & provider-customer interactions value-cocreation” and value-cocreation outcomes, by dynamically configuring resource Marketing access via value propositions, most often studied by many disciplines, one piece at a time.” The ABC’s: The provider (A) and a customer (B) transform a target (C) Computer Science/ Artificial Intelligence Economics & Law Operations 31 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM 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 NYU32 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Visit IBM Almaden Research Center, San Jose, CA Upcoming Conferences – July 2012 • ISSS San Jose • HSSE San Francisco More Information – Blog • www.service-science.info – Twitter • @JimSpohrer – Presentations • www.slideshare.net/spohrer – Email • spohrer@us.ibm.com 33 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 & open worldwide entrepreneurship research (IBM UPower) WWspohrer@us.ibm.com 34 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

IBM’s Leadership Changes IBM has 426,000 employees worldwide 2011 Financials 22% of IBM’s revenue  Revenue - $ 106.9B in Growth Market  Net Income - $ 15.9B countries; growing at 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 35 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

AEIOU of sciences – service science  Abstract Entities – service systems – Learning to apply knowledge to compete & cooperate  Interactions – value propositions  Outcome Universals – value-cocreation (or not) – Increasing capabilities and quality-of-life for individuals Cities compete & cooperate Universities compete & cooperate36 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

~250 years of infrastructure transformations Installation Crash Deployment Irruption Frenzy Synergy Maturity • Formation of Mfg. industry 1 The I ndust r i al 1771 Panic • Repeal of Corn Laws 1829 Revol ut i on 1797 opening trade • Standards on gauge, time A ge of St eam Panic 2 and Rai l ways 1829 1847 • Catalog sales companies 1873 • Economies of scale A ge of St eel , Depressio • Urban development 3 El ect r i ci t y 1875 n • Support for interventionism 1920 1893 and Heavy Engi neer i ng • Build-out of Interstate A ge of Oi l , Crash 4 A ut omobi l es 1908 1929 highways 1974 • IMF, World Bank, BIS and Mass Pr oduct i on Coming period of A ge of I nf or mat i on Credit Crisis 5 and 1971 2008 Institutional Adjustment and Production Capital Tel ecommuni cat i ons Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages; (Edward Elar Publishers, 2003).37 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

~100 years of US job transformations Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis38 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

We need better frameworks, theories, and models of… Four I’s Cultural Information – Infrastructure (Quality-of-Life Measures) – Individuals – Institutions – Information Individuals Institutions Four Measures (Skills) (Rules, Jobs) – Innovativeness – Equity – Sustainability Societal Infrastructure – Resiliency (Technologies & Environment)39 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Service systems entities learn to apply knowledge Learning To Apply Knowledge Do It Invent It Exploitation Exploration Run Transform Innovate Operations L Internal Incremental Maintenance Copy It External Radical Insurance Interaction Super-Radical 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.40 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

California Human Development Report 2011:From meaning-of-life to quality-of-life…. http://www.measureofamerica.org/docs/APortraitOfCA.pdf41 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

Isss service science reframing skeleton and progress 20120717 v3

by James Clinton Spohrer on Jul 17, 2012

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