The document outlines IBM University Programs' strategies to enhance education and service systems through investments in people and environmental initiatives, focusing on five key areas: research, readiness, recruiting, revenue, and responsibility. It emphasizes the importance of building smarter cities and innovative service systems to improve quality of life, alongside fostering collaboration between universities and industry for better talent development. The initiative also highlights the need for transdisciplinary approaches in service science to address global challenges effectively.

1. Service Science: Progress and Directions Dr. James (“Jim”) C. Spohrer Director, IBM University Programs (IBM UP) WW spohrer@us.ibm.com Porto, Portugal For: AMA ServSIG June 18, 2010

2. Outline Overview of IBM University Programs (IBM UP) WW Investing in people and planet to improve talent and infrastructure Five R’s – Research, Readiness, Recruiting, Revenue, Responsibilities Quality of Life: Our growing dependence on networks of interconnected service systems Local optimization does not equal global optimization Local problems can cascade into global significance Ecology: The study of the abundance and distribution of entities in an environment, and their interactions with each other and their environment over successive generations Natural World Human-Made World Holistic Service Systems: Cities and universities Fundamental building blocks (resource integrators) to get right Beyond customer-provider dyad, toward networks of stakeholders

3. Profitable growth by investing in people and planet. Projects that improve global talent and infrastructure. Working with universities to build smarter cities and improve quality of life. IBM University Programs (IBM UP) WW Research Recruiting Skills People Talent Government Industry Education Planet Infrastructure

4. Partnership Executive Program (PEP) JoAnn Winson, GUP Client Executives & Senior Location Execs S&D Public Private Partnerships Kevin Reardon, Research Industry-Academic IP Collaboration Dawn Tew, GUP Revenue & Responsibility Value creation, sales, and revenue generation PhD Fellowship Program Jeff Brody, GUP Global Recruitment Campaign (led by HR) HR Global University Sourcing (led by HR) HR Extreme Blue Internship Program (led by HR) HR Recruiting Acquiring top talent Academic Initiative Program (led by SWG) Kevin Faughnan, SWG SSME/Smarter Planet Skills for 21 st Century Dianne Fodell & Wendy Murphy, GUP LA Grid Initiative (Hispanic Focus) Juan Caraballo, GUP Student Contests / Competitions (e.g., ACM) Innovation Centers and Developer Relations Mark Hanny, SWG Volunteerism/Corp Citizenship (with CC&CA) Shannon Thrasher, GUP Readiness Building the skills pipeline Shared University Research Awards (SUR) Lilian Wu, GUP Faculty Awards Jeff Brody, GUP Open Collaborative Research Awards (OCR) Dawn Tew, GUP Centers for Advanced Study (CAS) Andy Rindos, SWG World Community Grid (with CC&CA) Robin Wilner, CCCA Research Collaboration in areas of mutual interest & value Programs & Initiatives Five R’s

5. IBM University Programs (IBM UP): 2010 Focus “5 R’s” 1. Research Awards that connect university and IBM researchers/professionals to work on grand challenges https://www.ibm.com/developerworks/university/research/index.html 2. Readiness Access to IBM tools, methods, and course materials to develop skills https://www.ibm.com/developerworks/university/academicinitiative/ 3. Recruiting Jobs on global teams working to build a smarter planet - nation by nation, system by system http://www.ibm.com/jobs 4. Revenue Public-private partnerships that build great universities, great cities, and improve quality of life http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html 5. Responsibility IBM employees share their expertise, time, and resources with universities in community service http://www.ibm.com/ibm/ibmgives/

6. IBM University Programs (IBM UP): 2010 Focus “6 Priorities” 1. Smarter Cities & Service Innovation A. Holistic Modeling & Analytics, B. STEM Education Pipeline, C. Jobs & Entrepreneurship Establish Urban Sustainability and Service Innovation Centers (start with http://cityforward.org) 2. Cloud Computing & Analytics IBM Cloud Academy, IBM Academic Cloud, Massive Analytics 3. Ecosystem Alignment Internal and external coordination and collaborations (win-win relationships) 4. IBM on Campus IBM Centers for Advanced Study, IBM Innovation Centers, IBM Research Collaboratories 5. Growth Markets Enablement, Twin Cities, Sister Cities 6. Awards Programs Shared University Research, Open Collaborative Research, Faculty Awards, PhD Fellowships

7. Priority 1: Urban Sustainability & Service Innovation Centers A. Research: Modeling & Analytics of Holistic Service Systems Modeling and simulating cities will push state-of-the-art capabilities for planning interventions in complex system of systems (holistic service systems) Includes maturity models of cities, their analytics capabilities, and city-university interactions Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system Real-world data and advanced analytic tools are increasingly available B. Education: STEM (Science Tech Engineering Math) Pipeline City simulation and intervention planning tools can engage high school students and build STEM skills Role-playing games can prepare students for real-world projects C. Entrepreneurship: Job Creation City modeling and intervention planning tools can engage university students and build entrepreneurial skills Grand challenge competitions can lead to new enterprises Note: Universities are mini-cities within cities (building blocks to get right).

8. Technology immersion of today’s students Innovations in the consumer marketplace are driving rapid adoption of new technologies for communication, entertainment and learning Over 4 billion individuals now have access to mobile technologies worldwide – representing over 60% of the population Social networking sites, virtual worlds, and mass collaboration technologies allow crowd sourcing to gain insights

9. Vision for the Educational Continuum The Educational Continuum Any Device Learning TECHNOLOGY IMMERSION PERSONAL LEARNING PATHS Student-Centered Processes KNOWLEDGE SKILLS Learning Communities GLOBAL INTEGRATION Services Specialization ECONOMIC ALIGNMENT Systemic View of Education Intelligent Aligned Data Outcomes Insight Instrumented Student-centric Integrated Assessment Interconnected Shared Services Interoperable Processes Continuing Education Higher Education Secondary School Primary School Workforce Skills Individual Learning Continuum Education System Continuum Economic Sustainability

10. Learning is changing…. Formal is a small fraction Informal is dominant Signposts show wall breaking down

11. Changing Nature of STEM Education Teach as a single integrated transdiscipline (2D = 2-Design improved SP service systems ) Teach as four disciplines Study confirms effectiveness of challenge-based learning designing and implementing improvements to real-world systems (http:// www.nmc.org/pdf/Challenge-Based-Learning.pdf ) “… by the end of their respective projects 80% of participating students reported that they had made a difference in their schools or communities by addressing their challenge.” Management Mathematics Engineering Technology (physical) Natural Sciences Environment, Economics & Law Technology (social) Social Sciences STEM 2D Mathematics Engineering Technology Science STEM

12. SSME Design Lab Virtual Summits Annual Global Challenges Example Transportation Congestion Challenge http://www.itsa.org/challenge/ Best Ideas Could Create New Businesses Potential Telepresence Play-offs with VCs for Advice Two Half-day SSME Design Lab Network Virtual Summits: West – August 11, 2009 – 16 Academic Leaders from 8 Universities in 6 locations East – August 14, 2009 – 15 Academic Leaders from 7 Universities in 7 locations Productivity Sustainable Innovation Regulatory Compliance N a t i o n s I n d u s t r i e s Quality

13. Sam Palmisano, CEO IBM “We need highly skilled people. So we say we need to help in the school systems. We’ll go in and create a services-as-a-science curriculum in Vietnam, or in Bulgaria, or in Indonesia.” Wall Street Journal, February 14, 2008 At IBM, we know something about systems. As must be obvious by now, I don't mean simply "computer systems." I mean the economic, logistical and societal systems by which our world operates. National Governors Association, July 9, 2010

14. Quality of life: We depend on service systems… A. Systems that focus on flow of things that humans need (~15%) 1. Transportation & supply chain 2. Water & waste recycling/Climate & Environment 3. Food & products manufacturing 4. Energy & electricity grid/Clean Tech 5. Information and Communication Technologies (ICT access) B. Systems that focus on human activity and development (~70%) 6. Buildings & construction (smart spaces) (5%) 7. Retail & hospitality/Media & entertainment (tourism) (23%) 8. Banking & finance/Business & consulting (wealthy) (21%) 9. Healthcare & family life (healthy) (10%) 10. Education & work life/Professions & entrepreneurship (wise) (9%) C. Systems that focus on human governance - security and opportunity (~15%) 11. Cities & security for families and professionals (property tax) 12. States /regions & development opportunities/investments (sales tax) 13. Nations /NGOs & rights/rules/incentives/policies/laws (income tax) (Quality of Service & Jobs & Investment Opportunities) Measure -> Quality, Productivity, Compliance, “Smarter” “ Smarter” = Sustainable Innovation (continuously reduce waste, expand capabilities) 10 19? 7 1 6 1 17 0 24 20 10 2 3 0 2

15. Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis) Communication $ 3.96 Tn Transportation $ 6.95 Tn Leisure / Recreation / Clothing $ 7.80 Tn Healthcare $ 4.27 Tn Food $ 4.89 Tn Infrastructure $ 12.54 Tn Govt. & Safety $ 5.21 Tn Finance $ 4.58 Tn Electricity $ 2.94 Tn Education $ 1.36 Tn Water $ 0.13 Tn Global system-of-systems $54 Trillion (100% of WW 2008 GDP) Same Industry Business Support IT Systems Energy Resources Machinery Materials Trade Legend for system inputs Note: 1. Size of bubbles represents systems’ economic values 2. Arrows represent the strength of systems’ interaction Source: IBV analysis based on OECD This chart shows ‘systems‘ (not ‘industries‘)  Our planet is a complex system-of-systems 1 Tn

16. Economists estimate, that all systems carry inefficiencies of up to $15 Tn, of which $4 Tn could be eliminated How to read the chart: For example, the Healthcare system‘s value is $4,270B. It carries an estimated inefficiency of 42%. From that level of 42% inefficiency, economists estimate that ~34% can be eliminated (= 34% x 42%).  We now have the capabilities to manage a system-of-systems planet Source: IBM economists survey 2009; n= 480 Global economic value of $4 Trillion 7% of WW 2008 GDP Improvement potential $15 Trillion 28% of WW 2008 GDP Inefficiencies $54 Trillion 100% of WW 2008 GDP System-of-systems System inefficiency as % of total economic value Improvement potential as % of system inefficiency Education 1,360 Building & Transport Infrastructure 12,540 Healthcare 4,270 Government & Safety 5,210 Electricity 2,940 Financial 4,580 Food & Water 4,890 Transportation (Goods & Passenger) 6,950 Leisure / Recreation / Clothing 7,800 Communication 3,960 Analysis of inefficiencies in the planet‘s system-of-systems Note: Size of the bubble indicate absolute value of the system in USD Billions 42% 34% This chart shows ‘systems‘ (not ‘industries‘)

17. Service Science: Transdisciplinary Framework to Study Service 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., statistics 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) Stackholders (As-Is) Resources (As-Is) Change (Might-Become) Value (To-Be)

18. NAE’s Engineering Grand Challenges A. Systems that focus on flow of things humans need 1. Transportation & Supply Chain Restore and enhance urban infrastructure 2. Water & Waste/Climate & Green tech Provide access to clear water 3. Food & Products Manager nitrogen cycle 4. Energy & Electricity Make solar energy economical Provide energy from fusion Develop carbon sequestration methods 5. Information & Communication Technology Enhance virtual reality Secure cyberspace Reverse engineer the brain B. Systems that focus on human activity & development 6. Buildings & Construction (smart spaces) Restore and enhance urban infrastructure 7. Retail & Hospitality/Media & Entertainment (tourism) Enhance virtual reality 8. Banking & Finance/Business & Consulting 9. Healthcare & Family Life Advance health informatics Engineer better medicines Reverse engineer the brain 10. Education & Work Life/Jobs & Entrepreneurship Advance personalized learning Engineer the tools of scientific discovery C. Systems that focus on human governance 11. City & Security Restore and improve urban infrastructure Secure cyberspace Prevent nuclear terror 12. State /Region & Development 13. Nation & Rights

19. Why 13 types of service systems? K-12 STEM and the human-made world “ Imagine a better service system, and use STEM language to explain why it is better” STEM = Science, Technology, Engineering, and Mathematics See NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635 See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning Challenge-based Project to Design Improved Service Systems K - Transportation & Supply Chain 1 - Water & Waste Recycling 2 - Food & Products (Nano) 3 - Energy & Electric Grid 4 – Information /ICT & Cloud (Info) 5 - Buildings & Construction 6 – Retail & Hospitality/Media & Entertainment (tourism) 7 – Banking & Finance/Business & Consulting 8 – Healthcare & Family Life (Bio) 9 - Education & Work Life/Jobs & Entrepreneurship (Cogno) 10 – City (Government) 11 – State /Region (Government) 12 – Nation (Government) Higher Ed – T-shaped teamwork, deep & broad education Professional Life – T-shaped teamwork, series of projects Systems that focus on Governing Systems that focus on Human Activities and Development Systems that focus on Flow of things

20. Transportation Split: How did you get to school today?

21. T-Shaped Professionals: Ready for T-eamwork! SSMED = 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 team-oriented service projects completed (resume: outcomes, accomplishments & awards)

22. Time ECOLOGY 14B Big Bang (Natural World) 10K Cities (Human-Made World) Sun writing (symbols and scribes) Earth written laws bacteria (uni-cell life) sponges (multi-cell life) money (coins) universities clams (neurons) tribolites (brains) printing press (books) steam engine 200M bees (social division-of-labor) 60 transistor

23. Natural: Physics (Atoms) Natural: Chemistry (Molecules) Biology (Uni-Cell Organisms) Biology (Multi-Cell Organisms) Natural: Biology (Neural & Social Organisms) Human Made: Anthropology (Informal Service System Entities) Human Made: Economics & Law (Formal Service System Entities) Human Made: Network Theory (Globally Integrated Service System Entities) Systems Science Service Science Explain Evolution of Hierarchical Complexity Gray Area Social Sciences Sciences of the Natural and Human Made Worlds Natural Sciences Microscopic Structures Living Organisms Service System Entity Physics Atoms Chemistry Chemicals Biology Uni-cellular Biology Multi-cellular Biology Neural & Social Natural Anthropology Informal Economics & Law; Political Science Formal Network Theory Globally Integrated Human-made Science Domain

24. Systems & Hierarchy of Complexity Microscopic Structures Living Organisms Service System Entity Physics Atoms Chemistry Chemicals Biology Uni-cellular Biology Multi-cellular Biology Neural & Social Natural Anthropology Informal Economics & Law; Political Science Formal Network Theory Globally Integrated Human-made Science Domain

25. Understanding the Human-Made World See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html Also see: Symbolic Species, Deacon Company of Strangers, Seabright Sciences of the Artificial, Simon

26. Population growth per hour in major cities

27. Urban-Age.Net Currently, the world’s top 30 cities generate 80% of the world’s wealth. The Urban Age For the first time in history more than 50% the earth’s population live in cities - by 2050 it will be 75% The Endless City

28. Edu-Impact.Com “ 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.”

29. Example: San Jose, California (USA)

30. Nation’s % of Global GDP and Nation’s % of Top 500 Universities Correlation becomes stronger when we consider (in the graph) USA and its data: % of Top 500: 30,3 % % global GDP: 23,3 % Source: http://www.arwu.org/ARWUAnalysis2009.jsp

31. A. Flow of things 1. Transportation : Traffic congestion; accidents and injury 2. Water : Access to clean water; waste disposal costs 3. Food : Safety of food supply; toxins in toys, products, etc. 4. Energy : Energy shortage, pollution 5. Information : Equitable access to info and comm resources B. Human activity & development 6. Buildings : Inefficient buildings, environmental stress (noise, etc.) 7. Retail : Access to recreational resources 8. Banking : Boom and bust business cycles, investment bubbles 9. Healthcare : Pandemic threats; cost of healthcare 10. Education : High school drop out rate; cost of education C. Governing 11. Cities : Security and tax burden 12. States : Infrastructure maintenance and tax burden 13. Nations : Justice system overburdened and tax burden Cities as Holistic Service Systems (Mini-Nations) Example: Singapore Population Challenges Careers Opportunities

32. Universities as Holistic Service Systems (Mini-Cities) A. Flow of things 1. Transportation : Traffic congestion; parking shortages. 2. Water : Access costs; reduce waste 3. Food : Safety; reduce waste. 4. Energy : Access costs; reduce waste 5. Information : Cost of keeping up best practices. B. Human activity & development 6. Buildings : Housing shortages; Inefficient buildings 7. Retail : Access and boundaries. Marketing. 8. Banking : Endowment growth; Cost controls 9. Healthcare : Pandemic threat. Operations. 10. Education : Cost of keeping up best practices.. C. Governing 11. Cities : Town & gown relationship. 12. States : Development partnerships.. 13. Nations : Compliance and alignment.

33. A Vital Partnership: Cities and universities Citizens are demanding more urban services Larson & Odonoi (MIT) Urban Operations Research. Citizens are demanding more urban services, by type, quantity, and quality. Yet the ability of most cities in the United States and elsewhere to pay for additional services has been severely strained … For our purposes, a decision is an irrevocable allocation of resources. Thus, this book will deal with the allocation or deployment of the resources of urban service systems, including personnel, equipment, and various service-improving technologies. From this viewpoint, urban operations research can be thought of as a decision-aiding technology, one to assist urban managers in improving the deployment of their resources. Most deployments occur spatially throughout the city, so much of our work will have a strong spatial component. Higher education can respond Urban Serving University Coalition (USU) A Vital Partnership: Great Cities, Great Universities Higher education can respond to the challenges facing our cities and metropolitan regions, becoming the R&D partners of cities that evaluate and deploy potential innovations. Never before has this agenda had greater urgency for our nation. For example, demographic changes within the United States have been dramatic, with nearly eight in ten Americans now living in cities . According to the Brookings Institution, while the top 100 metropolitan areas make up only 12% of the land mass, they produce fully 75% of the gross domestic product, generate 78% of competitive patents, and account for 68% of the nation’s jobs. Increasingly, the prosperity of our cities and metro areas is inextricably linked to our national prosperity. Demographic projection: By 2050 over 75% of the world’s population will live in cities Stimulus Response

34. University Trend: Growth of Disciplines & Centers University sub-systems Disciplines in Schools (circles) Innovation Centers (squares) E.g., CMU Website (2009) “ Research Centers: where it all happens – to solve real-world problems” Disciplines in Schools Award degrees Single-discipline focus Research discipline problems Innovation Centers (ICs) Industry/government sponsors Multi-disciplinary teams Research real-world systems D D D D D D Engineering School Social Sciences, Humanities Professional Studies Business School water & waste transportation health energy/grid e-government Science & Mathematics I-School Design food & supply chain

35. City Trend: Sister Cities “Think Global” World as System of Systems World (light blue - largest) Nations (green - large) Regions (dark blue - medium) Cities (yellow - small) Universities (red - smallest) Cities as System of Systems Transportation & Supply Chain Water & Waste Recycling Food & Products ((Nano) Energy & Electricity Information /ICT & Cloud (Info) Buildings & Construction Retail & Hospitality/Media & Entertainment Banking & Finance Healthcare & Family (Bio) Education & Professions (Cogno) Government (City, State, Nation) Nations: Innovation Opportunities GDP/Capita (level and growth rate) Energy/Capita (fossil and renewable) IBM UP WW: Tandem Awards: Increasing university linkages (knowledge exchange interactions) Developed Market Nations (> $20K GDP/Capita) Emerging Market Nations (< $20K GDP/Capita)

36. University & City Trend: Tight Local Coupling & Global Brand UNIVERSITIES: THE INNOVATION CENTERS OF GREAT CITIES CITIES: THE LIVING LABS FOR UNIVERSITIES IBM UP Connect Universities To Their Cities let’s work towards smarter cities let’s start with smarter education

37. IBM University Programs (IBM UP) WW

38. Priority 1: Urban Sustainability & Service Innovation Centers A. Research: Holistic Modeling & Analytics of Service Systems Modeling and simulating cities will push state-of-the-art capabilities for planning interventions in complex system of service systems Includes maturity models of cities, their analytics capabilities, and city-university interactions Provides an interdisciplinary integration point for many other university research centers that study one specialized type of system Real-world data and advanced analytic tools are increasingly available B. Education: STEM (Science Tech Engineering Math) Pipeline City simulation and intervention planning tools can engage high school students and build STEM skills of the human-made world (service systems) Role-playing games can prepare students for real-world projects C. Entrepreneurship: Job Creation City modeling and intervention planning tools can engage university students and build entrepreneurial skills Grand challenge competitions can lead to new enterprises

39. Luxury Hotels as Holistic Service Systems (Mini-Cities)

40. Smarter = Sustainable Innovation (reduce waste, expand capabilities) Computational System Building Smarter Technologies Requires investment roadmap Service Systems: Stakeholders & Resources 1. People 2. Technology 3. Shared Information 4. Organizations connected by win-win value propositions Building Smarter Universities & Cities Requires investment roadmap

41. However, Disciplines Still Debate Definition of Service Economics Design & Psychology Systems Engineering Operations Computer Science/ Artificial Intelligence Marketing

42. Many Definitions of Service Economics Service 1 = economic activities that are not agriculture or manufacturing Service 3 = a transformation that one economic entity performs with the permission of a second entity, that transforms the second entity or a possession of the second entity Service 4 = an exchange between economic entities that does not transfer ownership of a physical thing. Service Science Service 2 = human-made value-cocreation phenomena, specifically a mutually beneficial outcome proposed, agreed to, and realized by two or more service system entities interacting. Service system entities can be people, businesses, nations, and any other economic entities with legal rights, such as the ability to own property, enter into binding contracts, etc. Quantifiable measures associated with service system entity interactions over the life-time of the entity, include quality, productivity, compliance, and sustainable innovation measures. Service system entities configure four types of resources, accessible by four types of access rights, and reason about four types of stakeholders when designing value-cocreation interactions, and evaluating them via their processes of valuing. Both collaboration and competition can both be/not be forms of value-cocreation, depending on context Operations Service 5 = a production process that requires inputs from a customer entity Computer Science Service 6 = a modular capability that can be computationally accessed and composed with others Systems Engineering Service 7 = a system (with inputs, outputs, capacity limits, and performance characteristics) which is interconnected with other systems that may seek to access its capabilities to create benefits, and in which local optimization of the system interactions may not lead to global performance improvements Design and Psychology Service 8 = an experience of a customer entity that results from that customer entity interacting with provider entities’ offerings Marketing Service 9 = the application of competence (e.g., resources, skills, capabilities) for the benefit of another entity Service 10 = a customer-provider interaction that creates mutual benefits

43. Thank-You! Dr. James (“Jim”) C. Spohrer Director, IBM University Programs (IBM UP) WW spohrer@us.ibm.com Porto, Portugal For: AMA ServSIG June 18, 2010 “ 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/invent it.” – Moliere/Kay “ Real-world problems may not respect discipline boundaries.” – Popper “ Today’s problems may come from yesterday’s solutions.” – Senge “ History is a race between education and catastrophe.” – H.G. Wells “ The future is born in universities.” – Kurilov “ Think global, act local.” – Geddes

44. How do we involve universities? How do weave a “total solution” that includes universities?

45. IBM’s Smarter Planet Grand Challenge: Smarter Systems A. Systems that focus on flow of things humans need 1. Transportation & Supply Chain Traffic, Rail 2. Water & Waste/Climate & Green tech Water 3. Food & Products Food, Products 4. Energy & Electricity Energy, Oil 5. Information & Communication Technology Intelligence, Telecom, Cloud Computing B. Systems that focus on human activity & development 6. Buildings & Construction (smart spaces) Buildings, Infrastructure 7. Retail & Hospitality/Media & Entertainment (tourism) Retail 8. Banking & Finance/Business & Consulting Banking, Stimulus 9. Healthcare & Family Life Healthcare 10. Education & Work Life/Jobs & Entrepreneurship Education, Work C. Systems that focus on human governance 11. City & Security Cites, Public Safety, Infrastructure 12. State /Region & Development 13. Nation & Rights Government, Stimulus

46. Nations’ Grand Challenge: Quality of Life (how to define?) Smarter Systems = “We expect more” – Dawson A. Systems that focus on flow of things humans need 1. Transportation & Supply Chain 2. Water & Waste/Climate & Green tech Climate and geography 3. Food & Products 4. Energy & Electricity 5. Information & Communication Technology Material well being B. Systems that focus on human activity & development 6. Buildings & Construction (smart spaces) Material well-being 7. Retail & Hospitality/Media & Entertainment (tourism) Material well-being 8. Banking & Finance/Business & Consulting Material well-being 9. Healthcare & Family Life Health & Family Life 10. Education & Work Life/Jobs & Entrepreneurship Job security Gender equality C. Systems that focus on human governance 11. City & Security Community Life Political stability and security 12. State/ Region & Development Climate and geography 13. Nation & Rights Political freedom Gender equality Political stability and security Economist.com Example Only

47. A. Holistic Modeling & Analytics Example: FIU’s Terrafly

48. C. Entrepreneurship & Job Creation Transportation Water and waste Energy and electricity Buildings Healthcare/Education Cities/Government General Methods & Techniques Specific Technologies Specific Systems Cross Industry Competencies Industry Specific Competencies Jobs Systems Engineering/ Analytics/BAO/SSME Research to improve systems fuels Model Systems Connect/capture Data Analyze, Improve Optimize, Automate Discipline Specialists Run Transform Innovate Synapsense, SensorTronics Infosphere Streams, ILOG, COGNOS, SPSS WS, Tivoli, Rational, DB2, etc. BAO, Green Sigma Specialists Consultant Project Manager Sales Architect Operations

49. IBM Jobs: Project teams focus on customer needs 1. Consultant (trusted advisor to customer) a value proposition to address problems or opportunities and enhance value co-creation relationships 2. Sales a signed contract that defines work, outcomes, solution, rewards and risks for all parties 4. Project Manager (often with co-PM from customer side) a detailed project plan that balances time, costs, skills availability, and other resources, as well as adaptive realization of plan 3. Architect (systems engineer, IT & enterprise architect) An elegant solution design that satisfies functional and non-functional constraints across the system life-cycle 5. Specialists (systems engineer, Research, engineer, Industry specialist, application, technician, data, analyst, professional, agent) a compelling working system (leading-edge prototype systems from Research) ~10% ~10% ~5% ~5% ~45% 6. Enterprise Operations Administrative Services, Other, Marketing & Communications Finance, Supply Chain, Manufacturing, Human Resources, Legal, General Executive Management ~25% IBM Employees ~10% Consultant ~10% Sales ~5% Architect ~5% Project Manager ~45% Specialists ~25% Enterprise Operations Project Work: 90% B2B – Business to Business 10% B2G – Business to Government (i.e., “Smarter Planet” projects)

50. The Big Trend: “The future is service 1 ” Physical: mostly interact with things Social: mostly interact with others Service 2 growth as IT-enabled division of labor Service 1 growth as intangible outputs -1000K -10K -100 -1 +100 Hunter Gatherer (physical) Agriculture (physical) Manufacturing (physical) Service (social) Human Labor 100% Time (years)

51. The Big Trend: “The future is service 2 ” More population (people & organizations) creates opportunity for specialization Specialization (division of labor – Adam Smith) can improve productive capacity More specialization (outsourcing) creates need for coordination mechanisms Local interactions become distributed across space, time, and scale (transaction costs – Coase) Local optimization may not lead to global performance improvements More coordination (IT can lower costs) creates service growth (value-cocreation) IT integrates across space, time, and scale improving global and local performance Increase the ratio of productive interactions to unproductive interactions with others Service Growth (Value-Cocreation) increase mutually beneficial interactions decrease unproductive interactions T-shaped people to lower coordination costs Population (People & Organizations) entities interacting Specialization (Outsourcing) space, time, scale distribution Coordination (Information Technology) space, time, scale integration Service 2 growth as IT-enabled division of labor

52. Thank-you! And… “ 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 “ Cities learning from cities learning from cities.” – Fundacion Metropoli “ Think global, act local.” – Geddes “ The future is born in universities.” – Kurilov “ The best way to predict the future is to create/invent it.” – Moliere/Kay “ The future is already here. It is just not evenly distributed.” – Gibbons “ Real-world problems may not respect discipline boundaries.” – Popper “ Today’s problems may come from yesterday’s solutions.” – Senge “ History is a race between education and catastrophe.” – H.G. Wells let’s focus smarter education on… … sustainable innovations for smarter cities … helping to build a smarter planet instrumented+interconnected+intelligent (http://www.ibm.com/think)

53. Service Science: Progress and Directions Dr. James (“Jim”) C. Spohrer Director, IBM University Programs (IBM UP) WW spohrer@us.ibm.com Porto, Portugal For: AMA ServSIG June 18, 2010 “ 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/invent it.” – Moliere/Kay “ Real-world problems may not respect discipline boundaries.” – Popper “ Today’s problems may come from yesterday’s solutions.” – Senge “ History is a race between education and catastrophe.” – H.G. Wells “ The future is born in universities.” – Kurilov “ Think global, act local.” – Geddes

54. http://www.ibm.com/think Dr. James (“Jim”) C. Spohrer Director of IBM University Programs (IBM UP) since 2009, Jim founded IBM's first Service Research group in 2003 at the Almaden Research Center with a focus on STEM (Science Technology Engineering and Math) for Service Sector innovations. He led this group to attain ten times return on investment with four IBM outstanding and eleven accomplishment awards over seven years. Working with service research pioneers from many academic disciplines, Jim advocates for Service Science, Management, Engineering, and Design (SSMED) as an integrative extended-STEM framework for global competency development, economic growth, and advancement of science. In 2000, Jim became the founding CTO of IBM’s first Venture Capital Relations group in Silicon Valley. In the mid 1990’s, he lead Apple Computer’s Learning Technologies group, where he was awarded DEST (Distinguished Engineer Scientist and Technologist) Jim received a Ph.D. in Computer Science/Artificial Intelligence from Yale University and a B.S. in Physics from MIT. Sustainable Innovation: Aligning Urban and University Service Systems Gibbons said “The future is already here. It's just not very evenly distributed.&quot;. What if walking onto a university campus was like walking into the future. In a way it is, because the students at universities will someday fill roles in business and society – they are the future doers in all systems. Also, some of the important ideas from university research centers will someday become commonplace. More and more universities, especially urban serving research universities, are like living labs for the cities that host them. Universities are in fact small cities within larger cities. Many universities today have more students than the populations of some cities in past centuries, and the students have much better technologies for sharing and building knowledge. There is more and more demand for Science Technology Engineering and Math (STEM) driven service innovations that can continuously improve the reliability of complex systems that serve customers in modern societies (UK Royal Society &quot;Hidden Wealth: Science in Service Innovations&quot; report, July 2009). Service innovations that improve reliability should also improve (a) the quality of service as judged by customers, (b) the productivity of provisioning service as judged by providers, and (c) the compliance as judged by regulatory or governing authorities as well as society as a whole. Furthermore, service innovations are what keep business systems competitive in a dynamic world characterized by globalization, driven in part by business model and technological change. Therefore, service innovations need to be sustainable innovations, both from an environmental perspective as well as an investment roadmap perspective that leads to continuous opportunities for individuals, businesses, and institutions. IBM University Programs (IBM UP) is working to align cities and universities on two important topics: Sustainability and Innovation. Service science is a global initiative to improve service system sustainable innovation tools and methods. Service science may someday lead to a Moore’s Law for service system improvement. This will require a Computer-Aided Design (CAD) tool that can be used by T-shaped professionals to plan and implement more service innovation projects. Improved service systems that continuously improve locally and globally can help achieve the vision of a Smarter Planet.

55. Most Wanted: A CAD for service systems (CAD = Computer Aided Design Tool) IEEE Computer, Jan 2007 CBM: Component Business Model WBM and RUP: Work Practices & Processes SOA: Technical Service-Oriented Architecture Key Performance Indicators (KPIs) IBM IBV: Component Business Models

56. How many entities to study? ~10B service systems - modular value creation systems Nations (~100) Regions (~1000) Cities (~10,000) Educational Institutions (~100,000) Healthcare Institutions (~100,000) Other Enterprises (~10,000,000) Largest 2000 >50% GDP WW Families (~1B) Persons (~10B) Balance/Improve Quality of Life GDP/Capita Quality of Service Customer Experience Quality of Jobs Sustainability GDP/Energy-Unit % Fossil % Renewable Nation Region (e.g., State) City Educational Institution Healthcare Institution Other Enterprises (job roles) Family (customers ) Person (providers)

57. How entities (service systems) learn and change over time History and future of Run-Transform-Innovate investment choices Diverse Types Persons (Individuals) Families Regional Entities Universities Hospitals Cities States/Provinces Nations Other Enterprises Businesses Non-profits Learning & Change Run = use existing knowledge or standard practices (use) Transform = adopt a new best practice (copy) Innovate = create a new best practice (invent) March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87. exploit explore Technology Technology Technology Technology Technology Technology Technology Technology Technology Technology Technology Technology Technology Technology Transform Innovate Invest in each type of change Ru n

58. How entities (service systems) interact Incentives & Rules Resources: People, Technology, Information, Organizations Stakeholders: Customers, Providers, Authorities, Competitors Measures: Quality, Productivity, Compliance, Sustainable Innovation Access Rights: Own, Lease, Shared, Privileged Ecology (Populations & Diversity) Entities (Service Systems) Interactions (Service Networks) Outcomes (Value Changes) Value Proposition Based Interactions (Incentives) Governance Mechanism Based Interactions (Rules) Access Rights (Relationships) Measures (Rankings of Entities) Resources (Roles in Processes) Stakeholders (Perspectives) win-win lose-lose win-lose lose-win Identity (Aspirations/Lifecycle) Reputation (Opportunities/Variety)

59. Reports: 3 Nations UK Royal Society Germany MARS US ASU CSL

60. Fitzsimmons & Fitzsimmons Graduate Students Schools of Engineering Teboul Undergraduates Schools of Business Busy execs (4 hour read) Ricketts Practitioners Manufacturers In Transition And 200 other books… Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs, Aquilano; Davis, Heineke; Heskett, Sasser, Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter; Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels, Warf; Checkland, Holwell; Cooper,Edgett; Hopp, Spearman; Womack, Jones; Johnston; Heizer, Render; Milgrom, Roberts; Norman; Pine, Gilmore; Sterman; Weinberg; Woods, Degramo; Wooldridge; Wright; etc. Teaching… Reaching the Goal: How Managers Improve a Services Business Using Goldratt’s Theory of Constraints By John Ricketts, IBM Service Management: Operations, Strategy, and Information Technology By Fitzsimmons and Fitzsimmons, UTexas Service Is Front Stage: Positioning services for value advantage By James Teboul, INSEAD For details: http://www.cob.sjsu.edu/ssme/refmenu.asp

61. Teaching: IBM SSME Website: Creating T-shaped people http://www.ibm.com/developerworks/spaces/ssme

62. Changing Nature of Jobs: Deep & Broad Levy, F, & Murnane, R. J. (2004). The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton University Press. Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT) Expert Thinking (deep) Complex Communication (broad) Routine Manual Non-routine Manual Routine Cognitive Increasing usage of job descriptive terms

63. A Service System Innovation Framework “ The Ten Types of Innovation” by Larry Keeley, Doblin Inc. Innovate (inside and outside) systems that create value

64. Many definitions of service Economics Service 1 = economic activities that are not agriculture or manufacturing Service 3 = a transformation that one economic entity performs with the permission of a second entity, that transforms the second entity or a possession of the second entity Service 4 = an exchange between economic entities that does not transfer ownership of a physical thing. Service Science Service 2 = value-cocreation phenomena, specifically a mutually beneficial outcome proposed, agreed to, and realized by two or more service system entities interacting. Service system entities can be people, businesses, nations, and any other economic entities with legal rights, such as the ability to own property, enter into binding contracts, etc. Quantifiable measures associated with service system entity interactions over the life-time of the entity, include quality, productivity, compliance, and sustainable innovation measures. Service system entities configure four types of resources, accessible by four types of access rights, and reason about four types of stakeholders when designing value-cocreation interactions, and evaluating them via their processes of valuing. Both collaboration and competition can both be/not be forms of value-cocreation, depending on context Operations Service 5 = a production process that requires inputs from a customer entity Computer Science Service 6 = a modular capability that can be computationally accessed and composed with others Systems Engineering Service 7 = a system (with inputs, outputs, capacity limits, and performance characteristics) which is interconnected with other systems that may seek to access its capabilities to create benefits, and in which local optimization of the system interactions may not lead to global performance improvements Design and Psychology Service 8 = an experience of a customer entity that results from that customer entity interacting with provider entities’ offerings Marketing Service 9 = the application of competence (e.g., resources, skills, capabilities) for the benefit of another entity Service 10 = a customer-provider interaction that creates mutual benefits