2030 inspire students to build it better 20150113 v3

Thinking About Value
Jim Spohrer, IBM
Royal College of Art
1/13/2015 (c) 2014 IBM UP (University Programs) 1
Tuesday January 13, 2015

Todays Talks
• Service as value co-creation
– The application of knowledge for
mutual benefits (outcomes) when
entities interact
• Service innovations scale
benefits
– Role of platforms (tech, biz, social)
• Service experience
– Expectations, Interactions,
Outcomes

© 2011 IBM CorporationIBM University Programs worldwide, accelerating regional development (IBM UPward)
Basics
 Service science is the study of service systems and value-cocreation
interactions and outcomes, through the lens of a service-dominant logic
(SDL) worldview
– All economic interactions are direct or indirect service interactions
– Goods are vehicles for indirect service interactions
 SDL (Vargo & Lusch) defines service as…
– the application of competence (e.g., knowledge) for the benefit of another entity
– slightly more specific, easier to understand
 Service science (Spohrer & Maglio) defines service as…
– value-cocreation interactions among service system entities
– slightly more general, harder to understand

Service Systems Thinking: ABC’s
A. Service Provider
• Individual
• Institution
• Public or Private
C. Service Target: The reality to be
transformed or operated on by A,
for the sake of B
• Individuals or people, dimensions of
• Institutions or business and societal organizations,
organizational (role configuration) dimensions of
• Infrastructure/Product/Technology/Environment,
physical dimensions of
• Information or Knowledge, symbolic dimensions
B. Service Customer
• Individual
• Institution
• Public or Private
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.”
Example Provider: College (A)
Example Target: Student (C)
Discuss: Who is the Customer (B)?
- Student? They benefit…
- Parents? They often pay…
- Future Employers? They benefit…
- Professional Associations?
- Government, Society?
A B
C

Service Science: Conceptual Framework
 Resources: Individuals, Institutions, Infrastructure, Information
 Stakeholders: Customers, Providers, Authorities, Competitors
 Measures: Quality, Productivity, Compliance, Sustainable Innovation
 Access Rights: Own, Lease, Shared, Privileged
Ecology
(Populations & Diversity)
Entities
(Service Systems, both
Individuals & Institutions)
Interactions
(Service Networks,
link, nest, merge, divide)
Outcomes
(Value Changes, both
beneficial and non-beneficial)
Value Proposition
(Offers & Reconfigurations/
Incentives, Penalties & Risks)
Governance Mechanism
(Rules & Constraints/
Incentives, Penalties & Risks)
Access Rights
(Relationships of Entities)
Measures
(Rankings of Entities)
Resources
(Competences, Roles in Processes,
Specialized, Integrated/Holistic)
Stakeholders
(Processes of Valuing,
Perspectives, Engagement)
Identity
(Aspirations & Lifecycle/
History)
Reputation
(Opportunities & Variety/
History)
prefer sustainable
non-zero-sum
outcomes,
i.e., win-win
win-win
lose-lose win-lose
lose-win
Spohrer, JC (2011) On looking into Vargo and Lusch's concept of generic actors in markets, or
“It's all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201.

© 2012 IBM CorporationIBM UPward (University Programs worldwide – accelerating regional development)6
Service system entities configure four types of resources
 First foundational premise of
service science:
– Service system entities
dynamically configure
four types of resources
– Resources are the building
blocks of entity
architectures
 Named resources are:
– Physical or
– Not-Physical
– Physicist resolve disputes
 Named resources have:
– Rights or
– No Rights
– Judges resolve disputes
Spohrer, J & Maglio, P. P. (2009)
Service Science: Toward a Smarter Planet.
In Introduction to Service Engineering.
Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
Physical
Not-Physical
Rights No-Rights
2. Technology/
Environment
Infrastructure
4. Shared
Information/
Symbolic
Knowledge
1. People/
Individuals
3. Organizations/
Institutions
Formal service systems can contract to configure resources/apply competence
Informal service systems can promise to configure resources/apply competence
Trends & Countertrends (Balance Chaos & Order):
(Promise) Informal <> Formal (Contract)
(Relationships & Attention) Social <> Economic (Money & Capacity)
(Power) Political <> Legal (Rules)
(Evolved) Natural <> Artificial (Designed)
(Creativity) Cognitive Labor <> Information Technology (Routine)
(Dance) Physical Labor <> Mechanical Technology (Routine)
(Relationships) Social Labor <> Transaction Processing (Routine)
(Atoms) Transportation <> Communication (Bits)
(Tacit) Qualitative <> Quantitative (Explicit)
(Secret) Private <> Public (Shared)
(Anxiety-Risk) Challenge <> Routine (Boredom-Certainty)
(Mystery) Unknown <> Known (Justified True Belief)

Service system entities calculate value from multiple stakeholder
perspectives
 Second foundational premise of
service science
– Service system entities calculate
value from multiple stakeholder
perspectives
– Value propositions are the building
blocks of service networks
 A value propositions can be viewed as
a request from one service system to
another to run an algorithm (the value
proposition) from the perspectives of
multiple stakeholders according to
culturally determined value principles.
 The four primary stakeholder
perspectives are: customer, provider,
authority, and competitor
– Citizens: special customers
– Entrepreneurs: special providers
– Parents: special authority
– Criminals: special competitors
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In
Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
Model of competitor: Does
it put us ahead? Can we
stay ahead? Does it
differentiate us from the
competition?
Will we?
(invest to
make it so)
StrategicSustainable
Innovation
(Market
share)
4.Competitor
(Substitute)
Model of authority: Is it
legal? Does it compromise
our integrity in any way?
Does it create a moral
hazard?
May we?
(offer and
deliver it)
RegulatedCompliance
(Taxes and
Fines, Quality
of Life)
3.Authority
Model of self: Does it play
to our strengths? Can we
deliver it profitably to
customers? Can we
continue to improve?
Can we?
(deliver it)
Cost
Plus
Productivity
(Profit,
Mission,
Continuous
Improvement,
Sustainability)
2.Provider
Model of customer: Do
customers want it? Is there
a market? How large?
Growth rate?
Should we?
(offer it)
Value
Based
Quality
(Revenue)
1.Customer
Value
Proposition
Reasoning
Basic
Questions
Pricing
Decision
Measure
Impacted
Stakeholder
Perspective
(the players)
Value propositions coordinate & motivate resource access

Service system entities reconfigure access rights to resources by
mutually agreed to value propositions
 Third foundational premise of service
science
– Service system entities reconfigure
access rights to resources by mutually
agreed to value propositions
– Access rights are the building blocks of
the service ecology (culture and
information)
 Access rights
– Access to resources that are
owned outright (i.e., property)
– Access to resource that are
leased/contracted for (i.e., rental
car, home ownership via
mortgage, insurance policies, etc.)
– Shared access (i.e., roads, web
information, air, etc.)
– Privileged access (i.e., personal
thoughts, inalienable kinship
relationships, etc.)
service = value-cocreation
B2B
B2C
B2G
G2C
G2B
G2G
C2C
C2B
C2G
***
provider resources
Owned Outright
Leased/Contract
Shared Access
Privileged Access
customer resources
Owned Outright
Leased/Contract
Shared Access
Privileged Access
OO
SA
PA
LC
OO
LC
SA
PA
S AP C
Competitor Provider Customer Authority
value-proposition
change-experience
dynamic-configurations
(substitute)
time
Spohrer, J & Maglio, P. P. (2009)
Service Science: Toward a Smarter Planet.
In Introduction to Service Engineering.
Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..

Service system entities interact to create ten types of outcomes
 Four possible outcomes
from a two player game
 ISPAR generalizes to ten
possible outcomes
– win-win: 1,2,3
– lose-lose: 5,6, 7, maybe 4,8,10
– lose-win: 9, maybe 8, 10
– win-lose: maybe 4
lose-win
(coercion)
win-win
(value-cocreation)
lose-lose
(co-destruction)
win-lose
(loss-lead)
WinLose
Provider
Lose Win
Customer
ISPAR descriptive model
Maglio PP, SL Vargo, N Caswell, J Spohrer: (2009) The service system is the basic abstraction of service science. Inf. Syst. E-Business Management 7(4): 395-406 (2009)

Service system entities learn to systematically exploit technology:
Technology can perform routine manual, cognitive, transactional work
L
Learning Systems
(“Choice & Change”)
Exploitation
(James March)
Exploration
(James March)
Run/Practice-Reduce
(IBM)
Transform/Follow
(IBM)
Innovate/Lead
(IBM)
Operations Costs
Maintenance Costs
Incidence Planning &
Response Costs (Insure)
Incremental
Radical
Super-Radical
Internal
External
Interactions
“To be
the best,
learn from
the rest”
“Double
monetize,
internal win
and ‘sell’ to
external”
“Try to
operate
inside
the
comfort
zone”
March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.
Sanford, L.S. (2006) Let go to grow: Escaping the commodity trap. Prentice Hall. New York, NY.

Service system entities are physical-symbol systems
 Service is value
cocreation.
 Service system entities
reason about value.
 Value cocreation is a
kind of joint activity.
 Joint activity depends
on communication and
grounding.
 Reasoning about value
and communication are
(often) effective
symbolic processes.
Newell, A (1980) Physical symbol systems, Cognitive Science, 4, 135-183.
Newell, A & HA Simon(1976). Computer science as empirical inquiry: symbols and search. Communications of the ACM, 19, 113-126.

Summary
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..
Physical
Not-Physical
Rights No-Rights
2. Technology/
Infrastructure
4.. Shared
Information
1. People/
Individuals
3. Organizations/
Institutions
1. Dynamically configure resources (4 I’s)
Model of competitor:
Does it put us ahead?
Will we?StrategicSustainable
Innovation
4.Competitor/
Substitutes
Model of authority: Is
it legal?
May we?RegulatedCompliance3.Authority
Model of self: Does it
play to our strengths?
Can we?Cost
Plus
Productivity2.Provider
Model of customer:
Do customers want
it?
Should we?Value
Based
Quality1.Customer
ReasoningQuestionsPricingMeasure
Impacted
Stakeholder
Perspective
2. Value from stakeholder perspectives
S AP C
3. Reconfigure access rights
4. Ten types of outcomes (ISPAR)
5. Exploit information & technology
6. Physical-Symbol Systems

Learning More
About Service Systems…
 Fitzsimmons & Fitzsimmons
– Graduate Students
– Schools of Engineering & Businesses
 Teboul
– Undergraduates
– Schools of Business & Social Sciences
– Busy execs (4 hour read)
 Ricketts
– Practitioners
– Manufacturers In Transition
 And 200 other books…
– Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs,
Aquilano; Davis, Heineke; Heskett, Sasser,
Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter;
Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels,
Warf; Checkland, Holwell; Cooper,Edgett; Hopp,
Spearman; Womack, Jones; Johnston; Heizer, Render;
Milgrom, Roberts; Norman; Pine, Gilmore; Sterman;
Weinberg; Woods, Degramo; Wooldridge; Wright; etc.
 URL: http://www.cob.sjsu.edu/ssme/refmenu.asp
 More Textbooks:
http://service-science.info/archives/1931
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

ISSIP.org
Professional Development for Service Innovators
• 2015 Conferences
– HICSS, Honolulu, HI, Jan 5-8
– T Summit, E Lansing, MI, Mar 16-17
– ICSERV,San Jose, CA July 6-8
– Frontiers, San Jose, CA July 9-12
– AHFE HSSE,Las Vegas, NV July 23-27

From I to T-shape and Beyond!
IBMers with more depth and breadth for a Smarter Planet
1/13/2015
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
15
Many disciplines
Many sectors
Many regions/cultures
(understanding & communications)
Deepinonesector
Deepinoneregion/culture
Deepinonediscipline

Welcome to the new age of
platform technologies and
smarter service systems
for every sector of
business and society
nested, networks systems

18
What are the trends?
Digital Immigrant
Born: 1988
Graduated College: 2012
Digital Native
Born: 2012
Enters College: 2030

2030 Transportation: Self-driving cars
Steve Mahan:
Test “Driver”

2030 Water

2030 Manufacturing
Ryan Chin:
Urban Mobility
Baxter: Building the Future
Maker-Bot: Replicator 2

2030 Energy

2030 Buildings: Recycled to be stronger, safer, cleaner
China Broad Group:
30 Stories in 15 Days

2030 ICT

Example: Leading Through Connections with…
Universities Collaborate with IBM Research to Design
Watson for the Grand Challenge of Jeopardy !
Assisted in the development of the Open
Advancement of Question-Answering
Initiative (OAQA) architecture and
methodology
Pioneered an online natural language
question answering system called START,
which provided the ability to answer questions
with high precision using information from
semi-structured and structured information
repositories
Worked to extend the
capabilities of Watson, with a
focus on extensive common
sense knowledge
Focused on large-scale
information extraction,
parsing, and knowledge
inference technologies
Worked on a visualization component to
visually explain to external audiences the
massively parallel analytics skills it takes for
the Watson computing system to break down
a question and formulate a rapid and accurate
response to rival a human brain
 Provided technological advancement
enabling a computing system to remember the
full interaction, rather than treating every
question like the first one - simulating a real
dialogue
Explored advanced machine learning
techniques along with rich text
representations based on syntactic and
semantic structures for the Watson’s
optimization
Worked on information
retrieval and text search
technologies
http://w3.ibm.com/news/w3news/top_stories/2011/02/chq_watson_wrapup.html

2030 Retail & Hospitality

2030 Finance & Business

2030 Health

2030 Education: Watch one, do one, teach one…

2030 Government
Four measures
 Innovativeness
 Equity
– Improve
weakest
link
 Sustainability
 Resiliency

Competitive Parity – Achieved.
 The NFL has spent the last two
decades touting its parity—the
idea that any team can win on any
given Sunday (or Monday or
Thursday). But this year, parity
has truly run wild.
 … here's the wackiest thing:
Through six weeks, 11 of the
NFL's 32 teams are 3-3. The
Journal asked the statistical gurus
of Massey-Peabody Analytics to
run a coin-flip simulation…

2030 and Beyond…. Government, Health, Education, Finance, etc.

1/13/2015
33

Platforms for Entrepreneurs
• Smarter Cities Intelligent Operations Center Platform
• IBM Watson & Cognitive Computing Platform
• IBM UP helping university startups to scale-up (growth)
1/13/2015
35

36
Those in-the-know say, “IBM is helping to build a Smarter Planet…”

37
Smarter Planet = Smarter “Service” 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.
WORKFORCE
PRODUCTS
SUPPLY CHAIN
COMMUNICATIONS
TRANSPORTATION BUILDINGS
IT NETWORKS

38
Land-population-energy-carbon
Carlo Ratti:
Senseable Cities

1/13/2015
41

ISSIP.org
Professional Development for Service Innovators
• 2015 Conferences
– HICSS, Honolulu, HI, Jan 5-8
– T Summit, E Lansing, MI, Mar 16-17
– ICSERV,San Jose, CA July 6-8
– Frontiers, San Jose, CA July 9-12
– AHFE HSSE,Las Vegas, NV July 23-27

IBM University Programs
From I to T-shape and Beyond!
IBMers with more depth and breadth for a Smarter Planet
1/13/2015
© IBM 2013 IBM University Programs worldwide
accelerating regional development (IBM UPward)
43
Many disciplines
Many sectors
Deepinonesector
Deepinonediscipline

Systems-Disciplines Framework: Depth & Breadth
Systems that focus on flows of things Systems that governSystems that support people’s activities
transportation &
supply chain water &
waste
food &
products
energy
& electricity
building &
construction
healthcare
& family
retail &
hospitality banking
& finance
ICT &
cloud
education
&work
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)
Observe Stakeholders (As-Is)
Observe Resource Access (As-Is)
Imagine Possibilities (Has-Been & Might-Become)
Realize Value (To-Be)
disciplines
systems

Recent Report, Funding, etc.
http://california-center-for-service-science.org/nsf-workshop/
http://www.nsf.gov/pubs/2014/nsf14610/nsf14610.htm
https://www.linkedin.com/groups/NSF-Industry-Academe-Enabling-Smart-5109582
http://web.mit.edu/mitssrc/nsf/index.html

Journals
For more see: http://service-science.info/archives/2634
Paul Maglio, Editor Mary Jo Bitner, Editor

Readings & Textbooks
See http://service-science.info/archives/2708 http://service-science.info/archives/1931

A Moore’s-like Law for Smarter Service Systems?
Computational System
Smarter Technology
Requires investment roadmap
Service Systems: Stakeholders & Resources
1. People
2. Technology
3. Shared Information
4. Organizations
connected by win-win value propositions
Smarter Buildings, Universities, Cities
Requires investment roadmap

What improves Quality-of-Life? Service System Innovations
A. Systems that focus on flow of things that humans need (~15%*)
1. Transportation & supply chain
2. Water & waste recycling/Climate & Environment
3. Food & products manufacturing
4. Energy & electricity grid/Clean Tech
5. Information and Communication Technologies (ICT access)
B. Systems that focus on human activity and development (~70%*)
6. Buildings & construction (smart spaces) (5%*)
7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*)
8. Banking & finance/Business & consulting (wealthy) (21%*)
9. Healthcare & family life (healthy) (10%*)
10. Education & work life/Professions & entrepreneurship (wise) (9%*)
C. Systems that focus on human governance - security and opportunity (~15%*)
11. Cities & security for families and professionals (property tax)
12. States/regions & commercial development opportunities/investments (sales tax)
13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax)
0/19/02/7/4
2/1/1
7/6/1
1/1/0
5/17/27
1/0/2
24/24/1
2/20/24
7/10/3
5/2/2
3/3/1
0/0/0
1/2/2
Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities
* = US Labor % in 2009.
“61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”

Smarter Service Systems Workshop

National Science Foundation
A feature of a service system is the
participation and cooperation of the customer
in the service and its delivery. A service system
then requires an integration of knowledge and
technologies from a range of disciplines, often
including engineering, computer science, social
science, behavioral science, and cognitive
science, paired with market knowledge to
increase its social benefit.
Nano-Bio-Info-Cogno

Brief History
of AI
1956 – Dartmouth Conference
1956 – 1981 Micro-Worlds
1981 – Japanese 5th Generation
1988 – Expert Systems Peak
1990 – AI Winter
1997 – Deep Blue
1997 – 2011 Real-World
2011 – Jeopardy! & SIRI
2013 – Cognitive Systems Institute
2014 – Watson Business Unit
2015 – “Cognition as a Service”
1/13/2015 (c) IBM 201452

Vision: Augment & Scale Expertise
1/13/2015 (c) IBM 201453

Cognitive Assistants - Occupations
1/13/2015 (c) IBM 201454

Biochemist/Biochemical Engineer
1/13/2015 (c) IBM 201455

Occupations = Many Tasks
1/13/2015 (c) IBM 201456

Watson Discovery Advisor
1/13/2015 (c) IBM 201457
Simonite, T. 2014. Software Mines Science Papers to Make New Discoveries. MIT. November 25, 2014.
URL: http://m.technologyreview.com/news/520461/software-mines-science-papers-to-make-new-discoveries/

User Models
1/13/2015 (c) IBM 201458

New Era of Computing:
Cognitive Technologies & Componentry
59
 Natural Language
– Reasoning, Logic & Planning
– Symbolic Processing
– Natural Language Processing
– Ranking of Hypotheses
– Knowledge Representations
– Domain-Specific Ontologies
– Information Storage/Retrieval
– Machine Learning, Reasoning
– Von Neumann Componentry
– OpenPOWER Systems
 Pattern Recognition
– Recognition, Sensing & Acting
– Pattern Processing
– Image & Speech Processing
– Ranking of Hypotheses
– Pattern Representations
– Domain-Specific Neural Nets
– Information Storage/Retrieval
– Machine Learning, Perception
– Neuromorphic Componentry
– TrueNorth & Corelets Systems
AI for IA:
Intelligence
Augmentation
Cognitive Systems
(“Cogs”) that boost
learning,
discovery,
engagement,
transformation, and
long-range planning.
Cognition as a Service
1/13/2015 (c) IBM 201459

Watson Platform on BlueMix
1/13/2015 (c) IBM 201460

61
Cognitive Systems Institute
Engage with Universities on
Research, including Watson
Platform Next (“WatsNext?”)
Build a pipeline of university
skills by working with Faculty
on courses and curricula
Actively recruit best students
with skills that align to our
business needs
61

Academic Industry Partnerships
Research, Readiness, Recruiting, Revenue, Responsibility, Regions
Jim Spohrer, Director
IBM University Programs (IBM UP)
http://www.ibm.com/university
November 20, 2014
1/13/2015
62

Holistic Service Systems (HSS)
1/13/2015
63
http://www.service-science.info/archives/1056
Nation
State/Province
City/Region
University
College
K-12
Cultural &
Conference
Hotels
Hospital
Medical
Research
Worker
(professional)
Family
(household)
For-profits:
Business Entrepreneurship
Non-profits
Social Entrepreneurship
U-BEE
Job Creator/Sustainer
U-BEEs = University-Based Entrepreneurial Ecosystems
“The future is already
here (at universities),
it is just not evenly
distributed.”
“The best way to
predict the future
is to (inspire the next
generation of students
to) build it better.”
“Multilevel nested,
networked
holistic service
systems (HSS)
that provision
whole service (WS) to
the people inside them.
WS includes
flows (transportation,
water, food, energy, com
development (buildings,
retail ,finance, health,
education),
and governance (city,
state, nation). ”
University Four Missions
1. Learning
2. Discovery
3. Engagement
4. Convergence

Universities Matter #1
1/13/2015
64
Japan
China
Germany
France
United KingdomItaly
Russia SpainBrazil
Canada
India
Mexico AustraliaSouth Korea
NetherlandsTurkey
Sweden
y = 0,7489x+ 0,3534
R² = 0,719
0
1
2
3
4
5
6
7
8
9
0 1 2 3 4 5 6 7 8 9
%globalGDP
% top 500 universities
Nation’s % WW GDP and % Top 500 Universities (2009 Data)

1/13/2015
65
…But it can be costly, American student loan debt is over $900M

1/13/2015
66
“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.”

IBM University Programs 6 R’s
• Research (Collaborate)
• Readiness (Skills)
• Recruiting (Jobs)
• Revenue (Solutions)
• Responsibility (Volunteers)
• Regions (Smarter Cities, Startups & Workforce)
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WORKFORCE
PRODUCTS
SUPPLY CHAIN
COMMUNICATIONS
TRANSPORTATION BUILDINGS

Partnering for Skills
Marisa Viveros,
VP Cybersecurity
Innovation
Dianne Fodell,
Program Exec
Skills for 21st C
Nanci Knight,
Academic
Initiatives
(Western Region)

T-Shaped People:
Next Generation Adaptive Innovators
for a Smarter Planet
Many disciplines
Many sectors
Deepinonesector
Deepinonediscipline
“No one knows everything, but a well-chosen team of T-shapes has empathy to learn anything.”

http://tsummit2014.org
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Educating Service Innovators
Jim Spohrer, IBM
AHFE Human Side of Service Engineering
Krakow, Poland
July 22, 2014
This presentation with speaker notes is available for download at:
http://www.slideshare.net/spohrer/ahfe-hsse-20140722-v3

Economic Shift in National Economies
Daryl Pereira/Sunnyvale/IBM@IBMUS,
42%643331.4Germany
37%2611632.1Bangladesh
19%2010701.6Nigeria
45%672852.2Japan
64%6921102.4Russia
61%6614203.0Brazil
34%3916453.5Indonesia
23%762315.1U.S.
35%23176014.4India
142%29224925.7China
40yr Service
Growth
S
%
G
%
A
%
Labor
% WW
Nation
World’s Large Labor Forces
A = Agriculture, G = Goods, S = Service
2010
2010
NationMaster.com, International Labor Organization
Note: Pakistan, Vietnam, and Mexico now larger LF than Germany
US shift to service jobs
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Service:
Value from
IT augmented workers in smarter systems
that create benefits for customers
and sustainably improve quality of life.

Growth of Service Revenue at IBM
SOFTWARE
SYSTEMS
(AND FINANCING)
SERVICES
2010 Pretax Income Mix Revenue Growth by Segment
0
20
40
60
80
100
1982
1988
1994
1998
2004
2006
2007
2008
2009
2010
Year
Revenue($B)
Services
Software
Systems
44%
17%
39%
IBM Annual Reports
What do IBM Service Professionals Do? Run IT & enterprise systems for customers,
help Transform customer processes to best practices, and Innovate with customers.

Professionals Associations & T-Shapes
• ISSIP
• INFORMS
• IEEE
• ACM
• AMA (Marketing)
• AIS
• POMS
• TSIA
For more complete list of 24 see: http://service-science.info/archives/1982
http://tsummit2014.org

• Founded Jul 2012 by IBM, Cisco, HP, and several universities as an
umberella association to help institutions and individuals to grow and be
successful in our global service economy
• ISSIP members representing industry, research, academia, students,
NGOs, and government, collaborate to promote service innovation and
service innovators in research, education, practice, policy making, and
professional development.
• Special Interest Groups collaborate to produce papers, workshops,
webinars, reports, surveys; current SIGs:
– Research and Education,
– Service Innovation Framework in Practice,
– SDN,
– Service UE,
– IoT (currently recruiting SIG Chair)),
– Other of interest to members: Cognitive Computing, Big Data and analytics. Health IT, ….
• ISSIP Ambassadors connect ISSIP to over 30 professional association and
research centers globally to sponsor conferences and awards
• ISSIP-BEP Service Innovation Books Series: 7 published, 12 in the
pipeline
• Grand Challenges, members collaborate to solve pressing problems in
Mission: to
“promote service
innovations for our
interconnected
world”.
Please join us!
www.issip.org

Conferences
• HICSS
– January 5-8, Hawaii
• ICSERV, July
– July 7-9, San Jose
• Frontiers, July
– July 9-12, San Jose
– Deadline Nov 20th
• AHFE HSSE, July
– July 26-30, Las Vegas

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)

California Human Development Report 2011:
Measuring quality-of-life….
http://www.measureofamerica.org/docs/APortraitOfCA.pdf

IBM University Programs On Campus IBMers
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Up-Skill
Cycle
University-Region1
University-Region2
= New Venture
= Acquisition
= High-Growth
Acquisition/
New IBM BU
(Growing)
= High-Productivity/
Mature IBM BU
(Shrinking)
= IBMer moving from
mature BU to acquisition
= IBMer moving into
On Campus IBMer role
(help create graduates
with Smarter-Planet skills,
help create Smarter Planet
oriented new ventures;
Refresh skills
= Graduates with
Smarter Planet skills
IBM

A Framework for Global Civil Society
 Daniel Patrick Moynihan said nearly 50 years ago: "If you want to
build a world class city, build a great university and wait 200
years." His insight is true today – except 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.
– John Sexton, President NYU

Thank-You! Questions?
Dr. James (“Jim”) C. Spohrer
Innovation Champion &
Director, IBM University Programs worldwide accelerating regional development (IBM UPward)
spohrer@us.ibm.com
“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM
“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org
“Universities are major employers in cities and key to urban sustainability.” – Coalition of USU
“Cities learning from cities learning from cities.” – Fundacion Metropoli
“The future is already here… It is just not evenly distributed.” – Gibson
“The best way to predict the future is to create it/invent it.” – Moliere/Kay
“Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer
“Today’s problems may come from yesterday’s solutions.” – Senge
“History is a race between education and catastrophe.” – H.G. Wells
“The future is born in universities.” – Kurilov
“Think global, act local.” – Geddes

What is more important than this?
• “To our children and
children’s children, to whom
we elders owe an
explanation of the world that
is understandable, realistic,
forward-looking, and whole.”
– Stephen Jay Kline (1922-1997)
– From the dedication of “The Conceptual
Foundations of Multidisciplinary Thinking,”
Stanford University Press, 1995.

Service Innovators
 ISSIP = International
Society of
Service Innovation
Professionals
 T-shaped Professionals
– Depth
– Breadth
 Register at:
– ISSIP.org

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IBM operates in 170 countries
around the globe
Acquisitions contribute significantly
to IBM’s growth ; ~120 acquisitions in
last decade
2012 Financials
Revenue - $ 104.5B
Net Income - $ 17.6B
EPS - $ 15.25 (10 yrs of
EPS d/digit growth)
 Net Cash - $18.2B
24% of IBMs revenue in
Growth Market countries;
growing at 7% ( @cc) in
2012
Number 1 in patent
generation for 20
consecutive years ;
6,478 US patents
awarded in 2012
More than 40% of IBMs
workforce does
business away from an
office
5 Nobel Laureates10 time winner of the
President’s National
Medal of Technology &
Innovation – latest for
LASIK laser refractive
surgical techniques
The Smartest Machine On Earth
100 Years of Business &
Innovation in 2011
New Era in IBM’s Leadership
IBM Growth Initiatives
IBM has
~425,000
employees
worldwide

Jim Spohrer, IBM
• Dr. James (“Jim”) C. Spohrer is IBM Innovation
Champion and Director of IBM University Programs
(IBM UP). Jim works to align IBM and universities
globally for innovation amplification. Previously, Jim
helped to found IBM’s first Service Research group,
the global Service Science community, and was
founding CTO of IBM’s Venture Capital Relations
Group in Silicon Valley. During the 1990’s while at
Apple Computer, he was awarded Apple’s
Distinguished Engineer Scientist and Technology title
for his work on next generation learning
platforms. Jim has a PhD in Computer
Science/Artificial Intelligence from Yale, and BS in
Physics from MIT. His current research priorities
include applying service science to study nested,
networked holistic service systems, such as cities
and universities. He has more than ninety
publications and been awarded nine patents.

Measuring Impact
 SSME: IBM Icon of Progress & IBM Research Outstanding Accomplishment
– Internal 10x return: CBM, IDG, SDM Pricing & Costing, BIW COBRA, SIMPLE, IoFT, Fringe, VCR
• Key was tools to model customers & IBM better
• Also tools to shift routine physical, mental, interactional & identify synergistic new ventures
• Alignment with Smarter Planet & Analytics (instrumented, interconnected, intelligent)
• Alignment with Smarter Cities, Smarter Campus, Smarter Buildings (Holistic Service Systems)
– External: More than $1B in national investments in Service Innovation activities
– External: Increase conferences, journals, and publications
– External: Service Science SIGs in Professional Associations
– External: Course & Program Guidelines for T-shaped Professionals, 500+ institutions
– External: National Service Science Institutions, Books & Case Studies (Open Services Innovation)
 Service Research, a Portfolio Approach
– 1. Improve existing offerings (value propositions that can move the needle on KPI’s)
– 2. Create new offerings (for old and new customers)
– 3. Improve outcomes insourcing, outsourcing, acquisitions, divestitures (interconnect-fission-fusion)
– 4. For all three of the above, improve customer/partner capabilities (ratchet each other up)
– 5. For all four of the above, increase patents and service IP assets (some donated to open forums)
– 6. For all five of the above, increase publications and body-of-knowledge (professional associations)

Who I am (http://www.service-science.info/archives/2233)
 Director IBM Global University Programs since 2009
– Global team works with 5000 university world wide (http://www.ibm.com/university)
– 6 R’s: Research (Awards), Readiness (Skills), Recruiting, Revenue, Responsibility, Regions
– Transform “IBM on Campus” brand awareness (“Smarter Planet/Smarter Cities”)
– Create “Urban Service System” Research Centers & U-BEEs
 Founding Director of IBM's first Service Research group from 2003-2009
– Almaden Research Center, San Jose, CA
– 10x ROI with four IBM outstanding and eleven accomplishment awards
– Improve existing offerings, create new, portfolio synergies, partners, patents, publications
– I know/work with service research pioneers from many academic disciplines
• I advocate for Service Science, Management, Engineering, and Design (SSME+D)
– Short-term: Curriculum (T-shaped people, deep in an existing discipline)
– Long-term: New transdiscipline and profession (awaiting CAD tool)
• I advocate for ISSIP (“one of the founding fathers”)
• Co-editor of the “Handbook of Service Science” (Springer 2010)
 Other background (late 90’s and before)
– Founding CTO of IBM’s Venture Capital Relations group in Silicon Valley
– Apple Computer’s (Distinguished Engineer Scientist and Technologist) award (90’s)
– Ph.D. Computer Science/Artificial Intelligence from Yale University (80’s)
– B.S. in Physics from MIT (70’s)

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