Reference content from this presentation as: Spohrer, JC (2011) Service Science & Policymaking. Otago Forum-3, Dunedin, New Zealand. Tuesday December 6, 2011. Permission to redistribute granted upon request to email@example.com Service science and policymaking Jim Spohrer (IBM, USA) The foundational service-dominant (S-D) logic provides a world view, mind set, and conceptual framework for the emerging transdiscipline of service science , which studies the evolutionary dynamics of service system entities and value-cocreation phenomena within a service ecology from multiple disciplinary and culture perspectives. Prompted by a range of complex, urgent global challenges, policymakers have begun reaching out to the emerging service science community, inviting a sharing of ideas and searching together for new perspectives on the sustainability of regions and the continuous improvement of quality-of-life measures generation over generation. Based on recent events and dialogues between these communities, we identify and present several areas for future collaboration (1) universities as a disruptive service system (Christensen's &quot;Disrupting College&quot; and Center for American Progress event), (2) future cities and university-based entrepreneurial environments (U-BEE's) as nested, networked holistic service systems (Kauffman Foundation and Bankinter Foundation &quot;Future of Cities and Regions: Entrepreneurial Ecosystems&quot; event), (3) the role of rapidly advancing IT infrastructure (in global and local economic and skills strategy) viewed as a dominant driver of change across a service ecology (IBM Almaden &quot;Regional Upward Spirals: The Co-Evolution of Future Technologies, Skills, Jobs, and Quality-of-Life&quot; event). We conclude that academic service researchers should increase their study of the IT-transformation of educational service systems at this time, and service quality researchers should increase their study of citizens as customers/stakeholder impacted by regional quality-of-life measures and the IT-transformation of government service systems. In so doing, we can better align the service science community to learn from and make contributions to the policymaking community at a time of many local and global public policy challenges, and rapid technology-driven change. Three Events: Center for American Progress Event: http://www.slideshare.net/spohrer/service-science-intro-20110606-v1 Bankinter & Kauffman Foundation Event: http://www.slideshare.net/spohrer/the-future-of-cities-and-regions-20110929-v4 http://www.slideshare.net/spohrer/survey-20110930-v1 IBM Regional Upward Spirals Event http://www.slideshare.net/spohrer/embracing-societal-transformation-20111005-v1
This talk is about the journey to better link service science and policymaking as areas of research and education…. Policymaking may not be all that familiar to most service researchers, but if they think of citizens as customers they are going in the right direction…. Evert Gummesson deserves the credit or blame for nudging me in this direction – he felt we might be re-inventing the wheel, and vice-versa… However, soon a number of events required more careful attention to how service science might inform policymaking, and vice versa…
Service science studies service systems thru the lens of service dominant logic (SDL)… However, service science (Spohrer & Maglio) and SDL (Vargo & Lusch) define the all important concept “service” slightly differently… Specific and general – what determines “another entity”– for example, is a future version of one’s self “another entity” – does the definition of service allow self-service, competence applied to benefit one’s self? Seems like the answer should be “yes, it does!” Note that not all “interactions of entities” can be termed value-cocreation – so from a service science perspective - “entities can interact in non-service-modes of interaction” – sometimes SDL is abbreviated and quoted as saying “all interactions are service interactions” but this form of the abbreviated SDL fundamental proposition needs some elaboration to be made clear and more precise Also note that value-cocreation is a perception of both entities thru their respective symbolic and non-symbolic processes of valuing realized and potential changes in the world… it gets complicated very quickly.
For those who like references, and I like references – here are some references to the definitions previous slide…. Not the complexity of determining the entities (stakeholders) involved in even simple service system interactions…. Who is the customer of higher education?
The service science conceptual framework is based on 8+4 fundamental concepts – the 8 are (1) ecology, (2) entities & (3) identity, (4) interactions, both (5) value-proposition-based and (6) governance-mechanism-based, and (7) outcomes & (8) reputation – with value propositions depending on 4 more concepts – (9) access rights & (10) resources as well as (11) measures and (12) stakeholders…. Sixteen more concepts follow and are closely inter-linked (1) individuals (people), (2) insitutions (organizations), (3) infrastructure (technology & environment), (4) information – and then (5) customers, (6) providers, (7) authorities, (8) competitors – and then (9) quality, (10) productivity, (11) compliance, (12) sustainable innovation – and then (13) own, (14) lease, (15) shared-access, and (16) priveleged-access… So in all 28 total concepts – with 12 fundamental concepts and 16 secondary concepts – that every service scientist should be familiar with…. Once can already see connections to policymaking in the area of service science governance mechanisms – rules, constraints, incentives, penalties, and risks… - as well in the stakeholder authorities, measures of compliance, resources of institutions, and access rights of shared-access (such as for common pool resources)….
Many disciplines study aspects of service systems – but perhaps policy makers were studying “the whole” – like service scientists…
Evert Gummeson suggested Ostrom and the policymaking community and Spohrer and the service science community needed to being to look for some shared vocabulary, frameworks, tools, methods, theories, and models – if for no other reason that both might benefit, even if on separate evolutionary paths… what’s the harm in reading more and trying to link some of the concepts?
And it did not take long to see that the fundamental abstraction of an institution (rule-based interactions) looked a lot like service system entities (value-proposition and governance-mechanism based interactions)… So Gummesson was right – as usual… From Ostrom’s “Understanding Institutional Diversity” book… Chapter One is online at: http://press.princeton.edu/chapters/s8085.pdf
And it wasn’t long before Louis Soares from the Center for American Progress reached out and suggested that service science and policymaking might benefit from bringing the communities together to learn from each other…
And then folks from the Kauffman Foundation and Bankinter – who were interacting with economists, political scientists, regional policy makers and urban planners, and technology innovators and entrepreneurs – also suggested it might make sense to increase interactions between our communities…. Especially around the concepts of Smarter Cities and Transformational Service…
What do we mean by smarter planet and smarter systems? We begin with the 3 I’s – instrumented (sensors), interconnected (including to smart phones) and intelligent (analytics software to sift thru the data and help them make smarter decisions)… for example Streetline is a start-up we identified in our Smart Camp competitions as a company that is helping to build a Smarter Planet – they produce a sensor that goes in parking spaces, so drivers coming into cities can see where the open spaces are, and make parking more intelligent – also you can use the smart phone to add money to the meter if your meeting runs over…. Most importantly, parking smarter saves fuel – it is estimated that over 20% of gasoline usage in some cities is people looking for parking… The evolution of service science is to apply service science to create a Smarter Planet. What is smarter planet? A smarter planet is built out of many harmonized smarter systems, systems that are instrumented, interconnected, and intelligent (data, models, and analytics software are used to make better decisions) The world is instrumented meaning everything has computers, cameras, gps or other sensors – cars, stop lights, signs, roads, hospitals, retail stores, rivers, bridges, etc.. The world is getting more and more interconnected. If we could capture the right data and analyze it, we can make our planet smarter. IBM has been working on cleaning up pollution in Galway Bay, Ireland. The marine scientists told the IBMers that the mussels in the water close their shells when something bad enters the water. So IBM put sensors in some of the mussels and connected the sensors to an alert system and visualization system. When a pollutant enters the water, the mussels shut their shells, the sensors sends an alert and water management officials begin to take action to clean it up. Over time, they realize that a particular ship may be coming into the bay every other Tuesday, causing the problem, and they can go after the ship company to not drop pollutants or to find another way to rid of waste. This optimization takes place with other causes of the pollutants.
Where are the opportunities? Everywhere! Every city and region of the world needs smarter energy, buildings, water transportation, healthcare, etc. - building IT-enabled smarter systems is what IBM is all about these days… many of our acquisitions have been software companies that specialize in analytics and optimization – getting insights from mountains of data, and using that to build smarter systems… IBM 2009 Annual Report – survey of smarter planet projects around the world…. But how do we involve universities more? How do we weave a “total solution” that includes universities in smarter city projects? What is the role of the university in creating a smarter city? In the continuous improvement of quality of life in cities? And aren’t universities really mini-cities within cities? … and on this Map of the World, in the 2009 IBM Annual report one can see a sampling of IBM Smarter Planet engagements around the world… working to improve the complete spectrum of system of systems… often with a focus on one system in one city… such as smarter energy in venezula or smarter medical research for healthcare in the US… some of these engagements include a partnership between the cities and universities – but much more opportunity exists… to help focus cities and universities, among others, on these opportunities… IBM and other organizations have begun to identify grand challenge problems…. For example, if you look at the IBM Smarter Planet website….
Here are two recent studies that provide great insights into the evolution of cities and what makes some cities smarter than others… McKinsey Study: Urban Worlds http://www.mckinsey.com/mgi/publications/urban_world/index.asp IBM Study: How Smart is Your City? http://www.smartertravel.ie/download/1/downloads/How%20Smart%20is%20your%20City%20GBE03248USEN.pdf
Researchers at University of Cambridge hosted industry and academic service researchers to create a framework for service innovation success… The framework is outlined in five columns – service innovation is the priority, we need to study service systems and networks, we call this study service science, and multiple stakeholders have to align to advance service science, and double investment in service research and education by 2015. You can read the complete report at the following URL: http://www.ifm.eng.cam.ac.uk/ssme/ To ensure we are making progress, we need to see how much government, academia, and industry are investing in service research and innovation. IfM and IBM (2008). Succeeding through service innovation: A service perspective for education, research, business and government. Cambridge, UK: University of Cambridge Institute for Manufacturing.
Researchers at Arizona State University in the US recently surveyed service researchers from around the world to create a research priorities framework for service science. You can read the executive summary at the following website: http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm You can read the complete article in the Journal of Service Research… Ostrom, AL, MJ Bitner, SW Brown, KA Burkhard, M Goul, V Smith-Daniels, H Demirkan, E Rabinovich (2010) Moving Forward and Making a Difference: Research Priorities for the Science of Service. Journal of Service Research. 13(1). 4-36.
http://www.youtube.com/watch?v=mwIjcv7OWMo Cesar Hidalgo, see minutes 7-19 of a longer youtube video
What are the largest and smallest service system entities that have the problem of interconnected systems? Holistic Service Systems like nations, states, cities, and universities – are all system of systems dealing with flows, development, and governance. =============\\ Nations (~100) States/Provinces (~1000) Cities/Regions (~10,000) Educational Institutions (~100,000) Healthcare Institutions (~100,000) Other Enterprises (~10,000,000) Largest 2000 >50% GDP WW Families/Households (~1B) Persons (~10B) Balance/Improve Quality of Life, generation after generation GDP/Capita Quality of Service Customer Experience Quality of Jobs Employee Experience Quality of Investment-Opportunities Owner Experience Entrepreneurial Experience Sustainability GDP/Energy-Unit % Fossil % Renewable GDP/Mass-Unit % New Inputs % Recycled Inputs
In conclusion, let’s consider the big picture – starting with the big bang…. and evolution of the earth, life on earth, human life, cities, universities, and the modern world… the evolution of observed hierarchical-complexity Age of natural systems (age of the universe): Big Bang http://en.wikipedia.org/wiki/Age_of_the_universe Age of urban systems (age of complex human-made world): Oldest city http://en.wikipedia.org/wiki/List_of_cities_by_time_of_continuous_habitation (end of last Ice Age was about 20,000 years ago, about 5 million people on earth by 10,000 years ago) http://www.ncdc.noaa.gov/paleo/ctl/100k.html (last Ice Age was probably started about 70,000 years ago when a super volcano erupted blocking sun light) Many people still ask -- where is the science in the “Service Science?” One answer is that the science is hidden away in each of the component disciplines that study service systems, scientifically from their particular perspective… However, the big picture answer is “Ecology” - Ecology is the study of the abundance and distribution of entities (populations of things) in an environment… and how the entities interact with each other and their environment over successive generations of entities. The natural sciences (increasingly interdisciplinary) study the left side, using physics, chemistry, and biology Service science (originated as interdisciplinary) studies the right side, using history, economics, management, engineering, design, etc. Service science is still a young area, but from the growth of service in nations and businesses to the opportunity to apply service science to build a smarter planet, innovate service systems, and improve quality of life… it is an emerging science with bright future, and yes… it will continue to evolve : - ) Most people think of ecology in terms of living organisms, like plants and animals in a natural environment. However, the concept of ecology is more general and can be applied to entities as diverse as the populations of types of atoms in stars to the types of businesses in a national economy. I want to start my talk today on “service,” by first thinking broadly about ecologies of entities and their interactions. Eventually, we will get to human-made service system entities and human-made value-cocreation mechanisms… but for today, let’s really start at the very beginning – the big bang. About 14B years ago (indicated by the top of this purple bar), our universe started with a big bang. And through a process of known as fusion, stars turned populations of lighter atoms like hydrogen into heavier atoms like helium, and when stars of a certain size have done all the fusion they could, they would start slowing down, and eventually collapse rapidly, go nova, explode and send heavier atoms out into the universe, and eventually new stars form, and the process repeats over and over, creating stars with different populations of types of atoms, including heavier and heavier elments. So where did our sun and the earth come from…. Eventually after about ten billion years in the ecology of stars and atoms within stars, a very important star formed our sun (the yellow on the left) – and there were plenty of iron and nickel atoms swirling about as our sun formed, and began to burn 4.5B years ago, and the Earth formed about 4.3B years ago (the blue on the left)… In less than a billion years, the early earth evolved a remarkable ecology of complex molecules, including amino acids, and after less than a billion years, an ecology of bacteria took hold on early earth (the bright green on the left). The ecology of single cell bacteria flourished and after another billion years of interactions between the bacteria, the first multicellular organisms formed, and soon the ecology of sponges (the light blue on the left) and other multi-cellular entities began to spread out across the earth. Then after nearly two billion years, a type of division of labor between the cells in multicelluar organism lead to entities with cells acting as neurons in the first clams (the red on the left), and these neurons allowed the clams to open and close at the right time. After only 200 million years, tribolites appeared the first organisms with dense neural structures that could be called brains appeared (the black on the left), and then after about 300 million years, multicelluar organisms as complex as bees appeared (the olive on the left), and these were social insects, with division of labor among individuals in a population, with queens, drones, worker bees. So 200 million years ago, over 13B years after the big bang, the ecology of living entities is well established on planet earth, including social entities with brains and division of labor between individuals in a population…. Living in colonies that some have compared to human cities – where thousands of individuals live in close proximity and divide up the work that needs to be done to help the colony survive through many, many generations of individuals that come and go. Bees are still hear today. And their wingless cousins, called ants, have taken division of labor to incredible levels of complexity in ant cities in nearly every ecological niche on the planet, except under water. Now let’s look at the human ecology,and the formation of service system entities and value-cocreation mechanisms, a small portion of which is represented by the colored bar on the right. Recall bees appeared about 200 million years ago, a small but noticeable fraction of the age of the universe. Now take 1% of this little olive slice, which is 2 million years… that is how long people have been on earth, just one percent of this little olive slice here. What did people do in most of that 2million years? Basically, they spread out to every corner of the planet, and changed their skin color, eye colors, and hair colors, they spread out and became diverse with many different appearances and languages. It took most of that 200 millions just to spread out and cover most of the planet with people. When there was no more room to spread out the density of people in regions went up…. Now take 1% of that 2million years of human history which basically involved spreading out to every corner of the planet and becoming more diverse, recall ecology is the study of abundance and distribution and types of interactions, and 1% of that 2million years is just 20,000 years, and now divide that in half and that represents 10,000 years. The bar on the right represents 10,000 years or just 500 generations of people, if a generation is about 20 years. 500 generations ago humans built the first cities, prior to this there were no cities so the roughly 5M people spread out around the world 0% lived in cities, but about 500 generations ago the first cities formed, and division of labor and human-made service interactions based on division of labor took off – this is our human big bang – the explosion of division of labor in cities. Cities were the big bang for service scientists, because that is when the diversity of specialized roles and division of labor, which is at the heart of a knowledge-based service economy really begins to take off... So cities are the first really important type of human-made service system entities for service scientists to study, the people living in the city, the urban dwellers or citizens are both customers of and providers of service to each other, and division of labor is the first really important type of human-made value-cocreation mechanism for service scientists to study. (Note families are a very important type of service system entity, arguably more important than cities and certainly much older – however, family structure is more an evolution of primate family structure – and so in a sense is less of a human-made service system entity and more of an inherited service system entity… however, in the early cities often the trades were handed down father to son, and mother to daughter as early service businesses were often family run enterprises in which the children participated – so families specialized and the family names often reflect those specialization – for example, much later in England we get the family names like smith, mason, taylor, cooper, etc.) So to a service scientist, we are very excited about cities as important types of service system entities, and division of labor as an important type of value-cocreation mechanism, and all this really takes off in a big way just 500 generations ago when the world population was just getting to around 5M people spread out all around the world – so 10,000 years about about 1% of the worlds population was living in early versions of cities. It wasn’t until 1900 that 10% of the world’s then nearly 2B people lived in cities, and just this last decade that 50% of the worlds 6B people lived in cities, and by 2050 75% of the worlds projected 10B population will be urban dwellers. If there is a human-made service system that we need to design right, it is cities. It should be noted that the growth of what economist call the service sector, parallels almost exactly the growth of urban population size and increased division-of-labor opportunities that cities enable – so in a very real sense SERVICE GROWTH IS CITY GROWTH OR URBAN POPULATION GROWTH… in the last decade service jobs passed agriculture jobs for the first time, and urban dwellers passed rural dwellers for the first time. But I am starting to get ahead of myself, let’s look at how the human-made ecology of service system entities and value-cocreation mechanisms evolved over the last 10,000 years or 500 generations. The population of artifacts with written language on them takes off about 6000 years ago or about 300 generations ago (the yellow bar on the right). Expertise with symbols helped certain professions form – and the first computers were people writing and processing symbols - scribes were required, another division of labor – so the service of reading and writing, which had a limited market at first began to emerge to help keep better records. Scribes were in many ways the first computers, writing and reading back symbols – and could remember more and more accurately than anyone else. Written laws (blue on right) that govern human behavior in cities takes off about 5000 years ago – including laws about property rights, and punishment for crimes. Shortly there after, coins become quite common as the first type of standard monetary and weight measurement system (green on right). So legal and economic infrastructure for future service system entities come along about 5000 years ago, or 250 generations ago, with perhaps 2% of the population living in cities…. (historical footnote: Paper money notes don’t come along much until around about 1400 years ago – bank notes, so use of coins is significantly older than paper money, and paper money really required banks as service system entities before paper money could succeed.). About 50 generations ago, we get the emergence of another one of the great types of service system entities – namely universities (light blue line) – students are the customers, as well as the employers that need the students. Universities help feed the division of labor in cities that needed specialized skills, including the research discipline skills needed to deepen bodies of knowledge in particular discipline areas. The red line indicates the population of printing presses taking off in the world, and hence the number of books and newspapers. This was only about 500 years or 25 generations ago. Now university faculty and students could more easily get books, and cities began to expand as the world’s population grew, and more cities had universities as well. The black line indicates the beginning of the industrial revolution about 200 years ago, the sream engine, railroads, telegraph and proliferation of the next great type of service system entity – the manufacturing businesses - that benefited from standard parts, technological advances and scale economies, and required professional managers and engineers. About 100 years ago, universities began adding business schools to keep up with the demand for specialized business management skills, and many new engineering disciplines including civil engineering, mechanical engineering, chemical engineering, and electrical engineering, fuel specialization and division of labor. By 1900, just over 100 years ago, or 5 generations ago 10% of the worlds population, or about 200 million people were living in cities and many of those cities had universities or were starting universities. Again fueling specialization, division of labor, and the growth of service as a component of the economy measured by traditional economists. Finally, just 60 years ago or 3 generations ago, the electronic semiconductor transistor was developed (indicated by the olive colored line on the right), and the information age took off, and many information intensive service activities could now benefit from computers to improve technology (e.g., accounting) and many other areas. So to recap, cities are one of the oldest and most important type of service system and universities are an important and old type of service system, as well as many types of businesses. Service science is the study of service system entities, their abundance and distribution, and their interactions. Division of labor is one of the most important types of value cocreation mechanisms, and people often need specialized skills to fill roles in service systems. Service science like ecology studies entities and their interactions over successive generations. New types of human-made service system entities and value-cocreation mechanisms continue to form, like wikipedia and peer production systems. Age of Unvierse (Wikipedia) The age of the universe is the time elapsed between the Big Bang and the present day. Current theory and observations suggest that the universe is 13.75 ±0.17 billion years old.  Age of Sun The Sun was formed about 4.57 billion years ago when a hydrogen molecular cloud collapsed.  Solar formation is dated in two ways: the Sun's current main sequence age, determined using computer models of stellar evolution and nucleocosmochronology , is thought to be about 4.57 billion years.  This is in close accord with the radiometric date of the oldest Solar System material, at 4.567 billion years ago.   Age of Earth The age of the Earth is around 4.54 billion years (4.54 × 109 years ± 1%).    This age has been determined by radiometric age dating of meteorite material and is consistent with the ages of the oldest-known terrestrial and lunar samples . The Sun , in comparison, is about 4.57 billion years old , about 30 million years older. Age of Bacteria (Uni-cellular life) The ancestors of modern bacteria were single-celled microorganisms that were the first forms of life to develop on earth, about 4 billion years ago. For about 3 billion years, all organisms were microscopic, and bacteria and archaea were the dominant forms of life.   Although bacterial fossils exist, such as stromatolites , their lack of distinctive morphology prevents them from being used to examine the history of bacterial evolution, or to date the time of origin of a particular bacterial species. However, gene sequences can be used to reconstruct the bacterial phylogeny , and these studies indicate that bacteria diverged first from the archaeal/eukaryotic lineage.  The most recent common ancestor of bacteria and archaea was probably a hyperthermophile that lived about 2.5 billion–3.2 billion years ago.   Cities (Wikipedia) Early cities developed in a number of regions of the ancient world. Mesopotamia can claim the earliest cities, particularly Eridu, Uruk, and Ur. After Mesopotamia, this culture arose in Syria and Anatolia, as shown by the city of Çatalhöyük (7500-5700BC). Writing (Wikipedia) Writing is an extension of human language across time and space. Writing most likely began as a consequence of political expansion in ancient cultures, which needed reliable means for transmitting information, maintaining financial accounts, keeping historical records, and similar activities. Around the 4th millennium BC, the complexity of trade and administration outgrew the power of memory, and writing became a more dependable method of recording and presenting transactions in a permanent form  . In both Mesoamerica and Ancient Egypt writing may have evolved through calendrics and a political necessity for recording historical and environmental events. Written Law (Wikipedia) The history of law is closely connected to the development of civilization . Ancient Egyptian law, dating as far back as 3000 BC, contained a civil code that was probably broken into twelve books. It was based on the concept of Ma'at , characterised by tradition, rhetorical speech, social equality and impartiality.   By the 22nd century BC, the ancient Sumerian ruler Ur- Nammu had formulated the first law code , which consisted of casuistic statements (&quot;if ... then ...&quot;). Around 1760 BC, King Hammurabi further developed Babylonian law , by codifying and inscribing it in stone. Hammurabi placed several copies of his law code throughout the kingdom of Babylon as stelae , for the entire public to see; this became known as the Codex Hammurabi . The most intact copy of these stelae was discovered in the 19th century by British Assyriologists, and has since been fully transliterated and translated into various languages, including English, German, and French.  Money (Wikipedia) Many cultures around the world eventually developed the use of commodity money . The shekel was originally both a unit of currency and a unit of weight.  . The first usage of the term came from Mesopotamia circa 3000 BC. Societies in the Americas, Asia, Africa and Australia used shell money – usually, the shell of the money cowry ( Cypraea moneta ) were used. According to Herodotus , and most modern scholars, the Lydians were the first people to introduce the use of gold and silver coin .  It is thought that these first stamped coins were minted around 650–600 BC.  Universities (Wikipedia) Prior to their formal establishment, many medieval universities were run for hundreds of years as Christian cathedral schools or monastic schools ( Scholae monasticae ), in which monks and nuns taught classes; evidence of these immediate forerunners of the later university at many places dates back to the 6th century AD.  The first universities were the University of Bologna (1088), the University of Paris (c. 1150, later associated with the Sorbonne ), the University of Oxford (1167), the University of Palencia (1208), the University of Cambridge (1209), the University of Salamanca (1218), the University of Montpellier (1220), the University of Padua (1222), the University of Naples Federico II (1224), the University of Toulouse (1229).   Printing and Books (Wikipedia) Johannes Gutenberg's work on the printing press began in approximately 1436 when he partnered with Andreas Dritzehn—a man he had previously instructed in gem-cutting—and Andreas Heilmann, owner of a paper mill.  However, it was not until a 1439 lawsuit against Gutenberg that an official record exists; witnesses' testimony discussed Gutenberg's types, an inventory of metals (including lead), and his type molds. 
Gathering Storm, Revisited: http://www.uic.edu/index.html/Chancellor/risingabove.pdf The Gathering Storm report clarifies the challenge of regional (national) competition in a global labor market – where a great deal of work that institutions need done can be done where-ever the cost, talent, and regulations are most favorable… the Gathering Storm report acknowledges the importance of progress in all regions to produce a safer world for everyone. The Gathering Storm presents evidence that the US’s innovation edge is slipping away in part as a result of the nature of the new competition, and makes specific recommendations to regain America’s competitiveness – by investing in accelerating regional innovation – recognizing the importance of K-12 Education, university STEM programs, first R&D jobs and professional career paths, and regulatory climate in regional innovation ecosystems – all of these can be seen to be centered on the university as key to accelerating regional innovation…
The quotes tell an important story… and help clarify the nature of the four recommendations (which I have re-ordered from the original report), fix “broken” systems that interfere with a universities successful performance as the center of regional innovation ecosystem…
McKinsey Study: Urban Worlds http://www.mckinsey.com/mgi/publications/urban_world/index.asp IBM Study: How Smart is Your City? http://www.smartertravel.ie/download/1/downloads/How%20Smart%20is%20your%20City%20GBE03248USEN.pdf
Technology is used by providers to perform more and more of the routine manual, cognitive, and transactional work Jobs Change: Individual Competencies & Institutional Roles
Part of IBM’s approach to the second problem is T-shaped people and service science…. What is the skills goal? T-shaped professional, ready for T-eamwork… T-shaped people are ready for T-eamwork – they are excellent communicators, with real world experience, and deep (or specialized) in at least one discipline and systems area, but with good team work skills interacting with others who are deep in other disciplines and systems areas. Also, T-shaped professionals also make excellent entrepreneurs, able to innovate with others to create new technology, business, and societal innovations. T-shaped people are adaptive innovators, and well prepared for life-long learning in case they need to become deep in some new area… they are better prepared than I-shaped people, who lack the breadth. Therefore, IBM and other public and private organizations are looking to hire more of this new kind of skills and experience profile – one that is both broad and deep.. These organizations have been collaborating with universities around the world to establish a new area of study known as service science, management, engineering, and design (SSMED) – to prepare computer scientists, MBAs, industrial engineers, operations research, management of information systems, systems engineers, and students of many other discipline areas – to understand better how to work on multidisciplinary teams and attack the grand challenge problems associated with improving service systems…
There are many opportunities for educational institutions to specialize. Better tuned competence of individuals allows graduates to hit the ground running and better fill roles in business and societal institutions…. Better general education will allow more rapid learning of an arbitrary area of specialization, and create a more flexible labor force… All service systems transform something – perhaps the location, availability, and configuration of materials (flow of things), or perhaps people and what they do (people’s activities), or perhaps the rules of the game, constraints and consequences (governance). How to visualize service science? The systems-disciplines matrix… SSMED or service science, for short, provides a transdisciplinary framework for organizing student learning around 13 systems areas and 13 specialized academic discipline areas. We have already discussed the 13 systems areas, and the three groups (flows, human activity, and governing)… the discipline areas are organized into four areas that deal with stakeholders, resources, change, and value creation. If we have time, I have included some back-up slides that describes service science in the next level of detail. However, to understand the transdisciplinary framework, one just needs to appreciate that discipline areas such as marketing, operations, public policy, strategy, psychology, industrial engineering, computer science, organizational science, economics, statistics, and others can be applied to any of the 13 types of systems. Service science provides a transdisciplinary framework to organize problem sets and exercises that help students in any of these disciplines become better T-shaped professionals, and ready for teamwork on multidisciplinary teams working to improve any type of service system. As existing disciplines graduate more students who are T-shaped, and have exposure to service science, the world becomes better prepared to solve grand challenge problems and create smarter systems that deliver modern service. Especially, where students have had the opportunity to work as part of an urban innovation center that links their university with real-world problems in their urban environment – they will have important experiences to help them contribute to solving grand challenge problems. ================================================ SSMED (Service Science, Management, Engineering and Design) Systems change over their life cycle… what is inside become outside and vice versa In the course of the lifecycle… systems are merged and divested (fusion and fission) systems are insourced and outsourced (leased/contracted relations) systems are input and output (owner ship relations) SSMED standard should ensure people know 13 systems and 13 disciplines/professions (the key is knowing them all to the right level to be able to communicate and problem-solve effectively) Multidisciplinary teams – solve problems that require discipline knowledge Interdisciplinary teams – solve harder problems, because they create new knowledge in between disciplines Transdisciplinary teams – solve very hard problems, because the people know discipline and system knowledge Ross Dawson says “Collaboration drives everything” in his talk about the future of universities… https://deimos.apple.com/WebObjects/Core.woa/BrowsePrivately/griffith.edu.au.3684852440
http://www.npr.org/2011/09/24/140766796/out-of-economic-chaos-a-new-order-may-be-rising Also, see TECHNOLOGIES: AUTONOMOUS VEHICLES Once a secret project, Google's autonomous vehicles are now out in the open, quite literally, with the company test-driving them on public roads and, on one occasion, even inviting people to ride inside one of the robot cars as it raced around a closed course. Google's fleet of robotic Toyota Priuses has now logged more than 190,000 miles (about 300,000 kilometers), driving in city traffic, busy highways, and mountainous roads with only occasional human intervention. The project is still far from becoming commercially viable, but Google has set up a demonstration system on its campus, using driverless golf carts, which points to how the technology could change transportation even in the near future. http://spectrum.ieee.org/automaton/robotics/artificial-intelligence/how-google-self-driving-car-works
Why service scientists are interested in universities…. They are in many ways the service system of most central importance to other service systems… Graph based on data from Source: http://www.arwu.org/ARWUAnalysis2009.jsp Analysis: Antonio Fischetto and Giovanna Lella (URome, Italy) students visiting IBM Almaden Dynamic graphy based on Swiss students work: http://www.upload-it.fr/files/1513639149/graph.html US is still “off the chart” – China projected to be “off the chart” in less than 10 years: US % of WW Top-Ranked Universities: 30,3 % US % of WW GDP: 23,3 % Correlating Nation’s (2004) % of WW GDP to % of WW Top-Ranked Universities US is literally “off the chart” – but including US make high correlation even higher: US % of WW Top-Ranked Universities: 33,865 % US % of WW GDP: 28,365 %
http://www.bls.gov/emp/ep_chart_001.htm http://theeconomiccollapseblog.com/archives/student-loan-debt-hell-21-statistics-that-will-make-you-think-twice-about-going-to-college Posted below are 21 statistics about college tuition, student loan debt and the quality of college education in the United States.... #1 Since 1978, the cost of college tuition in the United States has gone up by over 900 percent . #2 In 2010, the average college graduate had accumulated approximately $25,000 in student loan debt by graduation day. #3 Approximately two-thirds of all college students graduate with student loans . #4 Americans have accumulated well over $900 billion in student loan debt. That figure is higher than the total amount of credit card debt in the United States. #5 The typical U.S. college student spends less than 30 hours a week on academics. #6 According to very extensive research detailed in a new book entitled &quot;Academically Adrift: Limited Learning on College Campuses&quot;, 45 percent of U.S. college students exhibit &quot;no significant gains in learning&quot; after two years in college. #7 Today, college students spend approximately 50% less time studying than U.S. college students did just a few decades ago. #8 35% of U.S. college students spend 5 hours or less studying per week. #9 50% of U.S. college students have never taken a class where they had to write more than 20 pages. #10 32% of U.S. college students have never taken a class where they had to read more than 40 pages in a week. #11 U.S. college students spend 24% of their time sleeping, 51% of their time socializing and 7% of their time studying. #12 Federal statistics reveal that only 36 percent of the full-time students who began college in 2001 received a bachelor's degree within four years. #13 Nearly half of all the graduate science students enrolled at colleges and universities in the United States are foreigners. #14 According to the Economic Policy Institute, the unemployment rate for college graduates younger than 25 years old was 9.3 percent in 2010. #15 One-third of all college graduates end up taking jobs that don't even require college degrees. #16 In the United States today, over 18,000 parking lot attendants have college degrees. #17 In the United States today, 317,000 waiters and waitresses have college degrees. #18 In the United States today, approximately 365,000 cashiers have college degrees. #19 In the United States today, 24.5 percent of all retail salespersons have a college degree. #20 Once they get out into the &quot;real world&quot;, 70% of college graduates wish that they had spent more time preparing for the &quot;real world&quot; while they were still in school. #21 Approximately 14 percent of all students that graduate with student loan debt end up defaulting within 3 years of making their first student loan payment. http://www.citytowninfo.com/career-and-education-news/articles/georgetown-university-study-shows-a-bachelors-degree-in-stem-pays-off-11102002 About 65 percent of individuals with bachelor's degrees in STEM subjects commanded greater salaries than those with master's degrees in non-STEM fields, according to a Georgetown press release. Likewise, 47 percent of college graduates with bachelor's degrees in STEM fields earn higher wages than those with doctoral degrees in non-STEM subjects.
Edu-Impact.Com: Growing Importance of Universities with Large, Growing Endowments Recently visited Yang building at Stanford One of the greenest buildings on the planet But if it does not evolve in 20 years it will not be the greenest building Visited supercomputers – we have two at IBM Almaden – there was a time they were in the top 100 supercomputers in the world – not any more …. So a Moore’s law of buildings is more than cutting waste in half every year, it is also about the amount of time it takes to structural replace the material with newer and more modern materials that provide benefits…
What are the largest and smallest service system entities that have the problem of interconnected systems? Holistic Service Systems like nations, states, cities, and universities – are all system of systems dealing with flows, development, and governance. =============\\ Nations (~100) States/Provinces (~1000) Cities/Regions (~10,000) Educational Institutions (~100,000) Healthcare Institutions (~100,000) Other Enterprises (~10,000,000) Largest 2000 >50% GDP WW Families/Households (~1B) Persons (~10B) Balance/Improve Quality of Life, generation after generation GDP/Capita Quality of Service Customer Experience Quality of Jobs Employee Experience Quality of Investment-Opportunities Owner Experience Entrepreneurial Experience Sustainability GDP/Energy-Unit % Fossil % Renewable GDP/Mass-Unit % New Inputs % Recycled Inputs
Regional entities include nations, states, cities, universities, and households Holistic product-service systems are regional entities Entities learning equates to regional innovation (co-evolution of infrastructure, individual, institutions, and information – regional upward spirals) Institutions (Regional Governments/Ecosystems as well as Enterprises, For-Profits and Not-For-Profits): Run-Transform-Innovate Learning Theory is an IBM-elaboration of March’s “Exploitation-Exploration” model, where Exploration can involve copying another entity and transforming oneself (less risk if other entity has already “tested and validated” the innovation works, and involves internal-external-interactional transformation risks), Innovate is both inventing processes and implementing them to realize the benefits (and has risks of wasted investments and costly attempted, but failed, implementations). The strategy of just exploiting existing knowledge and not learning/changing is flawed if other entities are learning and improving and adapting to a dynamic environment. Not changing in a dynamic, competitive environment can lead to extinction. Individuals (Skills): T-shaped Professionals are both deep and broad – deep problem-solving and analytics skills in some discipline and for some type of system/industry sector, along with broad communication and soft-skills for high-performance teamwork involving human interactions with specialists in many disciplines and system/industry sector areas, including disciplinary, systems, and cultural diversity. The breadth of a T-shaped professionals communication skills is characterized in a framework known as the systems-disciplines framework, with 13 horizontal discipline-related knowledge areas, and 13 vertical systems/industry-sector-related areas. Although rarely discussed, there is a third dimension that includes 13 major cultural areas… Cultural variations are especially important in both understanding interaction styles as well as cultural variations in quality-of-life measures. A fourth dimension might someday include personality types… such as Myers-Briggs…
We will see that this societal transformation (like others before) will further elevate the role of universities for improving regional innovation performance and global competitiveness….
Henry Ford understood the paying his employees a fair wage created customers Drucker said the purpose of business is to create new customers Value-Cocreation Model strengthens both provider and customer, giving them both expanded capability to invest in innovation – because they are playing a game with a non-zero-sum mindset. Value-CoCreation Worldview has also been called Co-Elevation Worldview (Kijima, Tokyo Tech) and Augmentation Worldview (Engelbart, Bootstrap Institute) Compete for (the benefit of) others, includes helping others learn by giving them practice – as when a master competes against his student in chess (the experience creates teachable moments in a post-mortem analysis) Taxes are very important to proper governance! Taxes must be such that work can be done from anywhere for anywhere – globally integrated enterprises – and incentivize regional innovation/entities learning/value-cocreation competition Where is the corporate HQ? What are the corporate income taxes in that nation? Attractors of talent/sources of innovation gain an advantage Where are the customers? What are the value-added-taxes (VAT) for consumption in that nation? Where are the employees living and where is their primary household? What are the income taxes and residence/property taxes in those nation? (recall even hotel guests pay local taxes that go to the local government)
Trust is earned through a history of superior interaction performance (“happenings”) – one failure (unfair outcome) can erase hundreds of successes (fair outcomes)… Thomas Jefferson wrote about the right to the pursuit of happiness, and happiness was realizing opportunities to accumulate a history of “happenings” where an entities’ knowledge and competences made a positive difference in interactions with other entities in the world… (value-cocreation outcomes and episodes, or happiness through service to others)
Physical Capital: Environmental and technology infrastructure Less waste, more capabilities, more resilient, more sustainable, etc. Human Capital: Individual skills, institutional job roles, cultural information Natural and human-made disasters devastate “whole service” Service systems are dynamic configurations of people, technology, shared information, and other service system, connected by value-propositions and interacting to co-create value
Happy Birthday IBM – 100 years, IBM is celebrating its centennial, and 18 th year of #1 in patents in the world…. I want to thank my IBM colleagues… here are some facts about IBM… Sources http://en.wikipedia.org/wiki/IBM#cite_note-10K-0 http://www-03.ibm.com/press/us/en/pressrelease/33341.wss http://www.fiercecio.com/press-releases/ibm-reports-2010-fourth-quarter-and-full-year-results-nyse-ibm-q4
IBM gathers statistics related to the five 6 R’s on 5000 universities world wide… The best relations between IBM and universities involve what we call the five R’s – Research (or open collaborative research with a focus on grand challenge problems for business and society), Readiness (or skills), Recruiting (or jobs working on teams to building a smarter planet), Revenue (which is more and more about public-private partnerships that connect great universities and great cities), Responsibility (where IBM employees share their expertise, time, and resources with universities – including IBM guest lecturing in courses or judging student competitions), and Regions – newest and most important working with regional innovation ecosystems, in conjunction with our IBM Global Entrepreneurs program and SmartCamps…. About 15-20% of awards are in the analytics areas, and we see that growing to 25-33% this coming year and the future…. For more information: http://www.ibm.com/university Bay Area numbers… 300 fulltime hires in last five years 400 interns and co-ops students over 1000 employees who are alumni, between 2-10% executives over $3M in research and matching grant awards, over five times that in matching from government good customers of IBM
Service science and policymaking 20111203 v1
Service Science & Policymaking Dr. James (“Jim”) C. Spohrer, [email_address] Innovation Champion and Director IBM UPward (University Programs worldwide, accelerating regional development) Otago Forum-3, Dunedin, New Zealand Tuesday December 6 th , 2011
Outline <ul><li>The journey to link </li></ul><ul><ul><li>service science, policymaking, and more </li></ul></ul><ul><ul><li>design & select beneficial rules of interaction </li></ul></ul><ul><ul><ul><li>outcomes are desired changes in the world </li></ul></ul></ul><ul><ul><ul><li>policies become the laws, rules of the game </li></ul></ul></ul><ul><ul><ul><li>connect interactions to societal outcomes </li></ul></ul></ul><ul><li>Gummesson’s “nudge” to link </li></ul><ul><ul><li>link to a shared vocabulary (worldview, framework) </li></ul></ul><ul><ul><li>link to shared tools and methods (theory, models) </li></ul></ul><ul><li>The journey to link continues to unfold… </li></ul><ul><ul><li>Back to the events… “them to us, us to them” </li></ul></ul><ul><ul><li>More and more related work appearing… </li></ul></ul><ul><ul><li>Frameworks and concepts evolving… </li></ul></ul>
Basics <ul><li>Service science is the study of service systems and value-cocreation interactions and outcomes, through the lens of a service-dominant logic (SDL) worldview </li></ul><ul><ul><li>All economic interactions are direct or indirect service interactions </li></ul></ul><ul><ul><li>Goods are vehicles for indirect service interactions </li></ul></ul><ul><li>SDL (Vargo & Lusch) defines service as… </li></ul><ul><ul><li>the application of competence (e.g., knowledge) for the benefit of another entity </li></ul></ul><ul><ul><li>slightly more specific, easier to understand </li></ul></ul><ul><li>Service science (Spohrer & Maglio) defines service as… </li></ul><ul><ul><li>value-cocreation interactions among service system entities </li></ul></ul><ul><ul><li>slightly more general, harder to understand </li></ul></ul>
Service Systems Thinking: ABC’s <ul><li>Example Provider: College (A) </li></ul><ul><li>Example Target: Student (C) </li></ul><ul><li>Discuss: Who is the Customer (B)? </li></ul><ul><li>Student? They benefit… </li></ul><ul><li>Parents? They often pay… </li></ul><ul><li>Future Employers? They benefit… </li></ul><ul><li>Professional Associations? </li></ul><ul><li>Government, Society? </li></ul>A B C <ul><li>A. Service Provider </li></ul><ul><li>Individual </li></ul><ul><li>Institution </li></ul><ul><li>Public or Private </li></ul><ul><li>C. Service Target: The reality to be </li></ul><ul><li>transformed or operated on by A, </li></ul><ul><li>for the sake of B </li></ul><ul><li>Individuals or people, dimensions of </li></ul><ul><li>Institutions or business and societal organizations, organizational (role configuration) dimensions of </li></ul><ul><li>Infrastructure /Product/Technology/Environment, physical dimensions of </li></ul><ul><li>Information or Knowledge, symbolic dimensions </li></ul><ul><li>B. Service Customer </li></ul><ul><li>Individual </li></ul><ul><li>Institution </li></ul><ul><li>Public or Private </li></ul>Forms of Ownership Relationship (B on C) Forms of Service Relationship (A & B co-create value) Forms of Responsibility Relationship (A on C) Forms of Service 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 of competence for the benefit of another entity.”
Service Science: Conceptual Framework <ul><li>Resources: Individuals, Institutions, Infrastructure, Information </li></ul><ul><li>Stakeholders: Customers, Providers, Authorities, Competitors </li></ul><ul><li>Measures: Quality, Productivity, Compliance, Sustainable Innovation </li></ul><ul><li>Access Rights: Own, Lease, Shared, Privileged </li></ul>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. 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
What is service science? A service system? The ABC’s? Economics & Law Design/ Cognitive Science Systems Engineering Operations Computer Science/ Artificial Intelligence Marketing “ a service system is a human-made system to improve provider-customer interactions and value-cocreation outcomes, by dynamically configuring resource access via value propositions, most often studied by many disciplines, one piece at a time.” “ service science is the transdisciplinary study of service systems & value-cocreation” The ABC’s: The provider (A) and a customer (B) transform a target (C)
Evert Gummesson’s nudge “Look at Ostrom’s work…” “ We need some shared vocabulary and tools… start by reading Ostrom”
Hmmm… institutions sound like service system entities…
Higher Education <ul><li>Policy Concerns </li></ul><ul><ul><li>Funding </li></ul></ul><ul><ul><li>Student debt </li></ul></ul><ul><ul><li>Access for all </li></ul></ul><ul><ul><li>Rankings </li></ul></ul><ul><ul><li>Rate of innovation </li></ul></ul>
IBM Smarter Planet: The Three I’s and Smarter Systems INSTRUMENTED We now have the ability to measure, sense and see the exact condition of practically everything. INTERCONNECTED People, systems and objects can communicate and interact with each other in entirely new ways. INTELLIGENT We can respond to changes quickly and accurately, and get better results by predicting and optimizing for future events. IT NETWORKS WORKFORCE PRODUCTS SUPPLY CHAIN COMMUNICATIONS TRANSPORTATION BUILDINGS
Where are the opportunities? Every city and region! 'building smarter systems isn't simply a proposal or theory, but a practical reality, with clear steps, quantifiable benefits and best practices' - Sam Palmisano
Recent McKinsey Study and IBM Study Today, major urban areas in developed regions are, without doubt, economic giants. Half of global GDP in 2007 came from 380 cities in developed regions, with more than 20 percent of global GDP coming from 190 North American cities alone. The 220 largest cities in developing regions contributed another 10 percent. But by 2025, one-third of these developed market cities will no longer make the top 600; and one out of every 20 cities in emerging markets is likely to see their rank drop out of the top 600. By 2025, 136 new cities are expected to enter the top 600, all of them from the developing world and overwhelmingly—100 new cities—from China. The performance of core systems of today’s cities is fundamental to social and economic progress. Faced with major challenges, these systems can be improved and optimized through the application of smart solutions.
Stakeholder Priorities 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 Science To discover the underlying principles of complex service systems Systematically create, scale and improve systems Foundations laid by existing disciplines Progress in academic studies and practical tools Gaps in knowledge and skills 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 Skills & Mindset 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 - Priorities: Succeeding through Service Innovation - 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
Priorities: Research Framework for the Science of Service Source: Global Survey of Service Research Leaders (Ostrom et al 2010) Pervasive Force: Leveraging Technology to Advance Service Strategy Priorities Execution Priorities Fostering Service Infusion and Growth Improving Well-Being through Transformative Service Creating and Maintaining a Service Culture Stimulating Service Innovation Enhancing Service Design Optimizing Service Networks and Value Chains Effectively Branding and Selling Services Enhancing the Service Experience through Cocreation Measuring and Optimizing the Value of Service Development Priorities
Transformative Service <ul><li>Improve Well-Being </li></ul><ul><li>Non-Profits </li></ul><ul><ul><li>Red Cross </li></ul></ul><ul><li>Disaster Management </li></ul><ul><li>Government Policy </li></ul><ul><ul><li>Citizen as Customer </li></ul></ul>
Recent Connections <ul><li>Atlas of Economic Complexity </li></ul><ul><li>Race Against the Machine </li></ul><ul><li>Hyperspecialization </li></ul><ul><li>Buying Local Dilemma </li></ul>
Service systems and knowledge access evolving Nested, networked holistic service systems that provide “Whole Service” to the people-inside http://www.service-science.info/archives/1056 U-BEEs = University-Based Entrepreneurial Ecosystems, City Within City Nation State/Province City/Region University College K-12 Cultural & Conference Hotels Hospital Medical Research Worker (professional ) Family (household ) For-profits Non-profits U-BEE Job Creators
Time ECOLOGY 14B Big Bang (Natural World) 10K Cities (Human-Made World) sun (energy) writing (symbols and scribes, stored memory and knowledge) earth (molecules & stored energy) written laws (governance and stored control) bacteria (single-cell life) sponges (multi-cell life) money (governed transportable value stored value, “ economic energy”) universities (knowledge workers) clams (neurons) trilobites (brains) printing press (books) steam engine (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 (Є N ) of nested, networked Holistic-Product-Service-Systems (HPSS) 200M bees (social division-of-labor) 60 transistor (routine cognitive work)
Learning to embrace societal transformations “In democratic capitalism, both the government and the economy are built upon systems of broad-based self determination. And the private foundation is a creation of the latter, the economic system. From John Rockefeller, Andrew Carnegie, Henry Ford, and Ewing Kauffman to Bill Gates and Eli Broad, virtually every foundation donor has been an entrepreneur—someone who first created wealth by starting a for-profit venture, and who then “reconstituted” part of that wealth in a potent new form by starting a foundation. …foundations need to focus on creating the future, not fixing the past.” – Carl J. Schramm, Kauffman Foundation in MANAGING FOUNDATIONS TOWARD THE GOAL OF EXPANDING HUMAN WELFARE <ul><li>Since the last ice age ended, roughly 10,000 to 20,000 years ago, a number of societal transformations have occurred in regions around the world. </li></ul><ul><li>Societal transformations change the nature of human interactions with each other and their environment, from hunter-gatherers, to farmers, to factory-workers, to knowledge-workers. </li></ul><ul><li>Societal transformations impact the nature of competition, and incumbent leaders often find it costly and risky to re-tool and embrace change. </li></ul><ul><li>Learning to embrace societal transformations = learning to embrace new forms of competition (knowing that the duration of “the game” is shrinking) </li></ul>
The Gathering Storm Report: Societal Transformation “The committee concluded that the United States appears to be on a course that will lead to declining, not growing, standard of living for our children and grandchildren .” – Gathering Storm “Gentlemen, we have run out of money. It is time to start thinking.” – Rutherford <ul><li>“ The Gathering Storm report is focused upon the ability of Americans to compete for employment in a job market that increasingly knows no geographic boundaries.” </li></ul><ul><li>“ The United States takes deserved pride in the vitality of its economy, which forms the foundation of our high quality of life, our national security, and out hope that our children and grandchildren will inherit every greater opportunities.” </li></ul><ul><li>“ The possession of quality jobs is the foundation of a high quality life for the nations citizenry.” </li></ul><ul><li>“ While only four percent of the nations workforce is composed of scientists and engineers, this group disproportionately creates jobs for the other 96 percent.” </li></ul><ul><li>“ Further, the pace of creation of new knowledge appears by almost all measures to be accelerating.” </li></ul><ul><li>“ While this progress by other nations is to be both encouraged and welcomed, so too is the notion that Americans wish to continue to be among those people who do prosper.” </li></ul><ul><li>“ The Gathering Storm committee contends that it is strongly in America’s interest for all nations to prosper. Aside from its humanistic merit this outcome should produce a safer world for everyone…” </li></ul>
Recommendations: Toward Regional Upward Spirals “It would be impossible not to recognize the great difficulty of carrying out Gathering Storm recommendations, such as doubling the research budget, in today’s fiscal environment… However… One seemingly relevant analogy is that a non-solution to make an over-weight aircraft flight-worthy is to remove an engine.” – Gathering Storm Revisited “The fate of empires depends on how they educate their children.” – Aristotle “The best way to predict the future is to inspire & enable the next generation to build it better.” –IBM UPward <ul><li>I. Improve inputs to universities </li></ul><ul><ul><li>Fix “broken” K-12 system (invest in K-12) </li></ul></ul><ul><li>III. Improve outputs from universities </li></ul><ul><ul><li>Fix “broken” University system (invest in Higher Education) </li></ul></ul><ul><li>II. Improve transitions from university to first job </li></ul><ul><ul><li>Fix “broken” Employment system (increase R&D funding) </li></ul></ul><ul><li>IV. Improve speed of regional innovation </li></ul><ul><ul><li>Fix “broken” Governance system (align visa, tax, etc. regulations) </li></ul></ul>
What does “societal transformation” actually change? <ul><li>The 4 I’s </li></ul><ul><ul><li>Information </li></ul></ul><ul><ul><li>Individuals </li></ul></ul><ul><ul><li>Institutions </li></ul></ul><ul><ul><li>Infrastructure </li></ul></ul><ul><li>Geographic Unit of Analysis </li></ul><ul><ul><li>Region/City & Lead University </li></ul></ul><ul><ul><li>McKinsey: Urban Worlds </li></ul></ul><ul><ul><li>IBM: How Smart Is Your City? </li></ul></ul>Societal Infrastructure (Technologies & Environment) Individuals (Skills) Institutions (Jobs) Cultural Information (Quality-of-Life Measures) (challenges, language, laws, measures, models, routines)
Cultural Information & Quality-of-Life Measures: California Human Development Report 2011 http://www.measureofamerica.org/docs/APortraitOfCA.pdf
~250 years of infrastructure transformations Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages ; (Edward Elar Publishers, 2003). Installation Deployment Irruption The Industrial Revolution Age of Steam and Railways Age of Steel, Electricity and Heavy Engineering Age of Oil, Automobiles and Mass Production Age of Information and Telecommunications Frenzy Synergy Maturity Panic 1797 Depression 1893 Crash 1929 Credit Crisis 2008 Coming period of Institutional Adjustment and Production Capital 1 2 3 4 5 Panic 1847 1771 1829 1875 1908 1971 1873 1920 1974 1829 Crash <ul><li>Formation of Mfg. industry </li></ul><ul><li>Repeal of Corn Laws opening trade </li></ul><ul><li>Standards on gauge, time </li></ul><ul><li>Catalog sales companies </li></ul><ul><li>Economies of scale </li></ul><ul><li>Urban development </li></ul><ul><li>Support for interventionism </li></ul><ul><li>Build-out of Interstate highways </li></ul><ul><li>IMF, World Bank, BIS </li></ul>
~100 years of US job transformations Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis
~30 years of skill transformations: depth & breadth 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
T-shaped professionals: depth & breadth Ready for Life-Long-Learning Ready for T-eamwork Ready to Help Build a Smarter Planet SSME+D = Service Science, Management, Engineering + Design Many disciplines (understanding & communications ) Many systems (understanding & communications) Deep in one discipline (analytic thinking & problem solving) Deep in one system (analytic thinking & problem solving) Many multi-cultural-team service projects completed (resume: outcomes, accomplishments & awards) BREADTH DEPTH
Systems-Disciplines Framework: Depth & Breadth disciplines systems Systems that focus on flows of things Systems that govern Systems 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 city secure state scale nation laws 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 stakeholders Customer Provider Authority Competitors resources People Technology Information Organizations change History (Data Analytics) Future (Roadmap) value Run Transform (Copy) Innovate (Invent) Starting Point 1: Observe the Stakeholders (As-Is) Starting Point 2: Observe their Resource Access (As-Is) Change Potential: Think It! (Has-Been & Might-Become & To-Be) Value Realization: Do It Together! (New As-Is)
Proposed societal transformation: Who’s first? NPR: Out of Economic Chaos, A New Order May Be Rising <ul><li>HAWLEY: The grand total of U.S. automotive fatalities from 1975 to the present, about one and a half million people. Now, the grand total of U.S. fatalities from 1775 to the present in every military conflict we've had is 1.3 million. So in other words, in the last roughly 35 years we've killed more people with cars than we have in more than 300 years of warfare. </li></ul><ul><li>I think if you step back and look at cars from a sort of 35,000 foot level, you've got to wonder why we're doing this to ourselves. And there's a tremendous amount of industry and employment built up around it. But suppose it all changed. </li></ul><ul><li>One way it could change is if human weren't allowed to drive cars anymore. Or let me put it differently. If cars were much more appealing because they drove themselves and did it safely. </li></ul><ul><li>And this isn't just Jetson stuff. There's a brilliant computer scientist, artificial intelligence researcher at Stanford, named Sebastian Thrun. He's invented a car that drives itself. You can hop in the car and you never touch the wheel or the pedals. It navigates through all the traffic snarls. It won't run over little old ladies in Pasadena. It won't even run over a squirrel. </li></ul><ul><li>If you could eliminate the seven million accidents per year, the 2.9 million injuries, the 40,000 fatalities, that would be enormous boon. But if you think about what would happen in the short term. Let's suppose in the next five or ten years this idea comes to fruition. </li></ul><ul><li>Think about all the disruption that could cause. You might not have to own a car. Well, that might be good. You'd have a garage that you could use to start up a company instead of storing a couple of rusting hulks of metal in it. You'd never have to call Tom and Ray Magliozzi again, because you wouldn't have to fix your car. </li></ul><ul><li>There wouldn't be a parking problem, because you'd push a little button on your iPhone, a smart car would zip up, pick you up, drop you off where you need to go. That means no more valets, no more taxi drivers, no more meter maids, no more traffic cops. You'd never hear a car horn, because why would a robot car honk at another robot car. Makes no sense. </li></ul><ul><li>But that's an example of the sort of change that in the short term can cause immense of amounts of anxiety and upheaval. </li></ul>http://www.npr.org/2011/09/24/140766796/out-of-economic-chaos-a-new-order-may-be-rising
A Framework for Global Civil Society Perhaps universities should be first to try societal transformations? <ul><li>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 yesterday's 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. </li></ul><ul><ul><li>John Sexton, President NYU </li></ul></ul>
What are the benefits of top-ranked universities? % WW GDP and % WW Top-500-Universities Strong Correlation (2009 Data): National GDP and University Rankings http://www.upload-it.fr/files/1513639149/graph.html
What are the benefits of more education? Of higher skills? … But it can be costly, American student loan debt is over $900M
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.”
Our 21 st Century World: System of Systems Regional Nested, Networked Holistic Product-Service Systems http://www.service-science.info/archives/1056 <ul><li>Holistic Product-Service Systems provide access to “Whole Service” to people inside, including Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc. </li></ul><ul><li>Examples: Nations, States, Cities, Universities, Hotels, Hospitals, Homes </li></ul><ul><li>Definition: An holistic product-service system is a type of complex value-cocreation system that can provide “whole service” to its primary population of people, independent of all external systems, for an extended period of time, balancing independence with interdependence (outsourcing limits, re-cycle to sustain, etc.) </li></ul><ul><li>University-Based Entrepreneurial Ecosystems (U-BEE’s): Universities are usually in the “top five” job creators of regions, when they have associated incubators & science-technology parks, super-computing data centers, hospitals, cultural & conference hotels, K-12 schools, etc. </li></ul>For-profits Non-profits U-BEE Job Creators ~25-50% of start-ups are new IT-enabled service offerings SaaS PaaS IaaS http://www.thesrii.org Nation State/Province City/Region University College K-12 Cultural & Conference Hotels Hospital Medical Research Worker (professional ) Family (household )
Pegasus Global Holdings $200M Smart City Living Lab <ul><li>7 September 2011 </li></ul><ul><li>The Center for Innovation, Testing and Evaluation will cover 20 square miles in New Mexico, and will resemble a mid-sized American city, including urban canyons, suburban neighborhoods, rural communities and distant localities. </li></ul><ul><li>Potentially be able to house up to 35,000 people and will operate as if people are actually living there </li></ul><ul><li>The facility will allow technology companies, university and urban planners to test the "positive and negative impacts emerging technologies - Smart Grid, intelligent traffic systems, cyber security and more </li></ul><ul><li>estimated cost $200 million </li></ul><ul><ul><li>Smart City Living Lab ~$6K per potential-citizen to build/launch </li></ul></ul><ul><ul><li>Economy Hotel Projects ~$30K per guest-room to build/launch </li></ul></ul><ul><ul><li>Highest Priced Luxury Resort Hotels ~$600K per guest-room to build/launch </li></ul></ul>
The Gathering Storm , Revisited for All Regions “There is nothing as practical as a good theory.” – Kurt Lewin “History is a race between education and catastrophe.” – H.G. Wells <ul><li>Regions are entities that must learn to learn better </li></ul><ul><ul><li>Regions = Nations, States, Cities, etc… </li></ul></ul><ul><ul><li>Learning = Improving the global competitiveness performance of a region </li></ul></ul><ul><li>Regional entities = “Holistic product-service systems” </li></ul><ul><ul><li>that provision access to high-quality “whole service” to the people in them </li></ul></ul><ul><ul><li>that also provision access to high quality products & services globally </li></ul></ul><ul><ul><li>to contribute to a higher quality-of-life, both inside and outside their region </li></ul></ul><ul><ul><li>service science studies product-service systems & customer-provider interactions (value-cocreation mechanisms, including the servitization of products and productization of service by the algorithmic revolution and other means) </li></ul></ul><ul><li>Regional innovation = “Entities learning” </li></ul><ul><ul><li>“ Run-Transform-Innovate Learning Framework” </li></ul></ul><ul><ul><li>“ T-Shaped Professionals & the Systems-Disciplines Framework” </li></ul></ul><ul><ul><li>University-Based Entrepreneurial Ecosystems (U-BEEs) </li></ul></ul>
A major societal transformation is underway… “If we’re number one in technology, why do I have to call India for tech support?” – Jay Leno “Ideas are the new currency in a global knowledge economy.” – Ben Wildavsky, Senior Fellow, Kauffman Foundation “No country can lead in today’s world unless it leads in science.” – Speaker Nancy Pelosi “A history of modernization is in essence a history of scientific and technological progress… I firmly believe science is the ultimate revolution.” – Wen Jiabao, Premier, People’s Republic of China <ul><li>Driven by “The Death of Distance” & “Algorithmic Revolution” </li></ul><ul><ul><li>Cairncross, Economist (1997) </li></ul></ul><ul><ul><li>Zysman, CACM (2006) </li></ul></ul><ul><li>Manifesting in new forms of “Global Competition” </li></ul><ul><ul><li>Friedman, The World is Flat (2005) </li></ul></ul><ul><li>Characterized as a “Gathering Storm” by Americans </li></ul><ul><ul><li>US National Academies (2005, 2007, 2011) </li></ul></ul>
Societal Transformations Change The Rules of Competition “The purpose of business is to create and keep a customer.” – Peter Drucker <ul><li>From Value-Creation Worldview: Compete Against Others - Zero-Sum Mindset </li></ul><ul><ul><li>During different time intervals some regions begin to pull ahead, and some fall behind… eventually the people in lagging regions immigrate to leading regions, some lagging regions “collapse” and are absorbed into other regions or remain dysfunctional… not only is human capital squandered in lagging and collapsed regions, but human suffering grows over time in these regions…. disenfranchised populations create a security threat for all…. </li></ul></ul><ul><li>To Value-CoCreation Worldview: Compete With/For Others - Non-Zero-Sum Mindset </li></ul><ul><ul><li>The gains of innovators are “taxed” based on geography of their customers as well as home location of provider (providers cannot succeed without customers)… as innovators seek to expand their markets into other regions successfully the “governments” of both provider and customer regions see tax revenues increase… accelerating both “transform” and “innovate” capabilities… accelerating entities learning and regional innovation. </li></ul></ul><ul><ul><li>Innovator regions benefit the most, but the incentive is not to pull so far ahead that other regions lag too far behind or collapse; the incentive is to also create wealthier more capable customers over time, and regions compete in cycles of progress that move everyone forward… </li></ul></ul><ul><li>Simple Examples of Value-CoCreation Model: </li></ul><ul><ul><li>Toyota locating manufacturing plants in the US </li></ul></ul><ul><ul><li>“ The Huppenthal Method” Style of Learning Competition </li></ul></ul><ul><ul><ul><li>Students compete, but “winning” is defined as everyone completing the work as fast as possible, to beat their individual and collective previous best time </li></ul></ul></ul><ul><ul><ul><li>Leaders help those lagging behind catch-up, peer-mentoring and win-win NZS mindset </li></ul></ul></ul><ul><ul><ul><li>Demonstrated accelerated learning times and elevated student engagement levels </li></ul></ul></ul>
In Sum… “College is more valuable to the future economy than petroleum.” – Greg Easterbrook, Author “You can always count on Americans to do the right thing - after they’ve tried everything else.” – Churchill <ul><li>Gathering Storm reflects a major societal transformation underway </li></ul><ul><ul><li>Driven by “The Death of Distance” and “Algorithmic Revolution” </li></ul></ul><ul><ul><li>Manifesting in new, challenging forms of “Global Competition” </li></ul></ul><ul><li>The nature of regional competition is being transformed (accelerating)… </li></ul><ul><ul><li>From Value-Creation Worldview: “Compete Against” - Zero-Sum Mindset </li></ul></ul><ul><ul><li>To Value-CoCreation Worldview: “Compete With/For” - Non-Zero-Sum Mindset </li></ul></ul><ul><li>The transformation depends on increasing “trust” … a hard thing to do </li></ul><ul><ul><li>However, increasing interconnectedness suggests there is no other viable alternative </li></ul></ul><ul><ul><li>Cascade failures in globally interconnected economies are a real threat to stability </li></ul></ul><ul><li>Increased trust can only be earned by performance against a shared innovation roadmap, or a shared vision for a better future for all… </li></ul><ul><ul><li>For example, climate change and sustainable environment </li></ul></ul><ul><ul><li>For example, increased global security and financial stability </li></ul></ul><ul><li>It is time to get our priorities straight and focus on what matters most… </li></ul>
Embracing Societal Transformations & Regional Upward Spirals <ul><li>Who will be first? second? third? </li></ul><ul><ul><li>Which university? </li></ul></ul><ul><ul><li>Which city? </li></ul></ul><ul><ul><li>Which state? </li></ul></ul><ul><ul><li>Which nation? </li></ul></ul><ul><li>Risk & rewards </li></ul><ul><ul><li>Going first is one measure of leadership/innovation </li></ul></ul><ul><ul><li>Rewards can be high for successful innovators </li></ul></ul><ul><ul><li>However, going first has costs, risks, etc. </li></ul></ul><ul><ul><li>When consensus fails, breaking away to form new groups may be necessary </li></ul></ul><ul><li>Getting smarter about societal transformations </li></ul><ul><ul><li>What ‘game’ are we really playing? What are we trying to optimize? </li></ul></ul><ul><ul><li>What is the smartest way to lower costs, reduce risks, and allow regions that invest in change to realize the benefits of innovations in the shortest period of time? </li></ul></ul><ul><ul><li>Gathering Storm: How should “democratic capitalism” operate in the 21 st century? </li></ul></ul><ul><ul><li>Nearly 30% of top-ranked universities (cities within cities) is one of America’s greatest competitive assets </li></ul></ul><ul><ul><li>From regional universities to U-BEEs to successful entrepreneurs to new foundations </li></ul></ul>
Universities as gateways into a brighter future… <ul><li>The best way to predict the future is…. </li></ul><ul><ul><li>To create it. (Moliere) </li></ul></ul><ul><ul><li>To invent it. (Kay) </li></ul></ul><ul><ul><li>To inspire the next generation of students to invent it (IBM UPward) </li></ul></ul><ul><li>And remember, the future is already here…. </li></ul><ul><ul><li>… it is just not evenly distributed (Gibson) </li></ul></ul><ul><ul><li>… in universities, it is just not evenly distributed (IBM UPward) </li></ul></ul>Consider Sputnik generation…. Consider Facebook, Google, Yahoo… Consider IBM acquisitions… Consider successful U-BEEs….
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IBM operates in 170 countries around the globe IBM has 426,000 employees worldwide <ul><li>2010 Financials </li></ul><ul><li>Revenue - $ 99.9B </li></ul><ul><li>Net Income - $ 14.8B </li></ul><ul><li>EPS - $ 11.52 </li></ul><ul><li>Net Cash - $11.7B </li></ul>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 The Smartest Machine On Earth 100 Years of Business & Innovation “ Let’s Build a Smarter Planet"
IBM University Programs: What We Do: The “6 R’s” (not to be confused with 3 R’s) <ul><li>1. Research </li></ul><ul><ul><li>Research awards focus on grand challenge problems and big bets </li></ul></ul><ul><ul><li>https://www.ibm.com/developerworks/university/research </li></ul></ul><ul><li>2. Readiness </li></ul><ul><ul><li>Access to IBM tools, methods, and course materials to develop skills </li></ul></ul><ul><ul><li>https://www.ibm.com/developerworks/university/academicinitiative </li></ul></ul><ul><li>3. Recruiting </li></ul><ul><ul><li>Internships and full-time positions working to build a smarter planet </li></ul></ul><ul><ul><li>http://www.ibm.com/jobs </li></ul></ul><ul><li>4. Revenue </li></ul><ul><ul><li>Improve performance, the university as a complex enterprise (city within city) </li></ul></ul><ul><ul><li>http:// www.ibm.com/services/us/gbs/bus/html/bcs_education.html </li></ul></ul><ul><li>5. Responsibility </li></ul><ul><ul><li>Community service provides access to IBMers expertise/resources </li></ul></ul><ul><ul><li>http://www.ibm.com/ibm/ibmgives/ </li></ul></ul><ul><li>6. Regions </li></ul><ul><ul><li>Regional innovation ecosystems – incubators, entrepreneurship, jobs </li></ul></ul><ul><ul><li>http://www.ibm.com/ibm/governmentalprograms/innovissue.html </li></ul></ul>