Future of Manufacturing a Service Science Perspective

1. The Future of Manufacturing:
A Service Science Perspective
Dr. James (“Jim”) C. Spohrer
Director, IBM University Programs
October 3, 2013
Thursday 2-5pm at San Jose State University
For SJSU Lecture to Executive Delegation

2. Welcome to the new age of
platform technologies and
smart service systems
for every sector,
including manufacturing

3. Who I am
• Education & Startups – First Quarter Century
– 1974-78 MIT Physics, Bachelor of Science
– 1978-82 Startup: Verbex (employee #60, bought by Exxon)
– 1982-89 Yale Computer Science, PhD
• Specializing in Artificial Intelligence and Cognitive Science
• Consultant for Intelligent Tutoring System startups
– 1989 University of Rome LaSapienza in Italy, visiting scholar
• Silicon Valley & Big Businesses – Second Quarter Century
– 1989-98 Apple Computer
• Distinguished Engineer Scientist Technologist
• Learning Technologies (e.g., EOE, E/W Authoring Tools, WorldBoard, etc.)
– 1998-Present IBM
• User Experience Research (1998-99)
• Founding CTO IBM Venture Capital Group (1999-2002)
• Founding Director IBM Service Science Research Group (2002-07)
• Innovation Champion & Director Global University Programs (Since 2007)
• ISSIP, non-profit Service Innovation Professionals, Board of Directors (Since 2012)

4. Today’s Talk
• Vision: MMaaRRSS
– Modular Manufacturing as a Regional Recirculation Service System
– XaaS = Everything as a Service (value co-creation processes)
– Near zero waste, everything is an input to some process
– Doubling size of economy requires not only higher productivity
construction, but higher productivity deconstruction
• Trends: What’s In The News
– McKinsey, Servitization, My Tweets and Summary
• Innovation Framework: To get us there… and beyond!!!
– Near Future: Platform Technologies and Smart Service Systems
– Far Future: Utility Fog
– More on Silicon Valley, IBM, Universities, and Smarter Planet
– More on Service Science, Service Innovation, and ISSIP.org

5. Vision: MMaaRRSS
• Modular Manufacturing as a Regional
Recirculation Service System
– “I am the stuff that will be made into product X for
customer Y.”
– Stuff = Material, Energy, and Information Flows
– Minimize transport costs (for products and waste)
• The Vision: Circular Economy (~4 minutes)

6. Tomorrow: “I am the block that will be
made into product X for customer Y.”
• McKinsey.com/Insights (June 2013)
– The “Internet of Things” and the future of manufacturing
• Industrial Revolutions: Manufacturing Tech Platforms
– 1. Steam Engine
– 2. Conveyor Belt
– 3. IT and Automation (Phase 1)
– 4. Internet of Things/Logistics (Phase 2)
• “After the fourth industrial revolution, there will no
longer be a difference between information and
materials, because products will be inextricably linked
to “their” information.”

7. Today: Servitization
• Rolls Royce: “Power By The Hour”

8. Servitization
• Start with ay traditional product that is sold to customers
• Make the product part of a smart service system
– Instrument it (sensors)
– Set-up an intelligent operation center to monitor all products’
performance across their life-cycles
– Use big data analytics to determine how to improve product
performance, efficiency, maintenance, etc.
– Offer customer the “product-performance-as-a-service” with
financing
– Customer benefits from cost-savings, predictability
– Provider benefits margin-improvements, predictability
• The product becomes a platform technology for innovative
university startups that teach about it, and research it

9. My tweets
• rethinking categories of manufacturing as service-like “@McKinsey_MGI: @TheEconomist on
#manufacturing http://t.co/ngsa19EO” Nov 22, 2012
• @auerswald pendulum swinging back now “@Forbes: Manufacturing may be coming back to the
U.S. - for the long term. http://t.co/2KcjdrCX” Sep 22, 2012
• Baxter the $22K manufacturing robot looks like a butler http://t.co/mbfAKtUn Building robots small
& medium-size companies, mini-computers? Sep 19, 2012
• Good read “@wadhwa: Forbes: The End of Chinese Manufacturing & Rebirth of US Industry
http://t.co/vVqD0jFW" watch this http://t.co/SE4uSkB2 Aug 17, 2012
• Automating clothing manufacture http://t.co/H9oOONIH Jul 21, 2012
• transforming manufacturing product and service innovation with people, process and technology
#cisco http://t.co/UYuxB5zz @SamMikhailCPE Jul 21, 2012
• RT @grapealope: "By 2020, everything will be personalized in the manufacturing field." Sophie
Vandebroek (hopefully in healthcare too!) ... Jul 19, 2012
• “@SamMikhailCPE: Apple wants U.S. #manufacturing, but it ain't that easy http://t.co/2ftMXejH”
deeper analysis please beyond dorms unions Jul 04, 2012
• RT @iftf: How Will Employment Change with the Expansion of New Technologies—like Robotics—in
Manufacturing? - http://t.co/24HeSPmV #Robots Jul 03, 2012
• RT @GreenbizStartup: RT @Richard_Florida Japanese revolutionized manufacturing by harnessing
workers' knowledge, now in service http://t ... Jun 27, 2012
• Manufacturing as local recycling service http://t.co/RrcLMipv key part of smarter communities
http://t.co/JmnngFDL Jun 20, 2012

10. My Tweets (Continued)
• RT @4byoung: Tech manufacturing: A disaster waiting to happen? http://t.co/CG3eSR3N Jun
19, 2012
• RT @timoreilly: 5% of manufacturing jobs went unfilled last year due to lack of skilled applicants
http://t.co/WNa3Bzol Jun 19, 2012
• America makes more today than ever. How&what have changed “@SamMikhailCPE: The Rebirth of
American #Manufacturing http://t.co/qVMoTo64” May 27, 2012
• RT @auerswald: RT @emeka_okafor: "Making things with a 3D printer changes the rules of
#manufacturing" http://t.co/ttUZLNYO #3dprinting Apr 20, 2012
• “@auerswald: RT @emeka_okafor: 'success of Local Motors, the first open source car?'
http://t.co/ROIoeQ4D...” manufacturing.” micro-factory Mar 14, 2012
• Fortune 50 original equipment manufacturers, access to powerful computer tools provides
competitive advantage http://t.co/opzhUU0y Mar 11, 2012
• MAKE: An Amercan Manufacturing Movement http://t.co/DjI8nhzr Mar 11, 2012
• RT @autodesk: Story by @wadhwa on future of America’s manufacturing sector & the
developments @carlbass sees in defining new jobs http:/ ... Mar 08, 2012
• @auerswald between 1995 and 2002 US lost 2M manufacturing jobs; during same period China
lost 15M; Weiner was right "The Coming Peosperity" Mar 06, 2012
• Re-industrialize the US? Yes, and here is how - manufacturing as a local recycling service
http://t.co/cIwA2hv7 Mar 05, 2012
• RT @HarvardBiz Manufacturing is being transformed - It's Time to Bring Manufacturing Back to the
U.S. http://t.co/oZOYumXT local recycling Feb 28, 2012

11. My Tweets (Continued)
• RT @KurzweilAINews: Redesigning people: how medtech could expand beyond the injured: The exoskeleton
manufactured by Ekso Bionics in... ... Feb 28, 2012
• @livingarchitect manufacturing jobs 8% 2010 to 7% 2020. Professional services health ed predicted to grow the
fastest http://t.co/Y9h3UHjs Feb 08, 2012
• @went1955 Historically manufacturing jobs seen as one of few sources of well-paying jobs for less-educated
workers http://t.co/KEFmHXZ3 Feb 05, 2012
• RT @went1955: Do Manufacturers Need Special Treatment? – Economist Christina Romer in New York Times –
http://t.co/gUUkYGcJ Feb 05, 2012
• RT @rossdawson: RT @DanyDeGrave: Crowdsourced Capital and On-Demand Digital Fabrication #3D
#manufacturing #crowdsourcing http://t.co/04 ... Feb 04, 2012
• @auerswald @wadhwa old-style manufacturing jobs going (off-shore to China) going (off-people to automation)
gone (3D printable automation) Feb 01, 2012
• RT @auerswald: RT @wadhwa: Over the next few years, we are going to see dramatic changes in manufacturing,
design. Even BYO cars! http:/ ... Feb 01, 2012
• RT @daviding: The structural shift from manufacturing economy to service economy can be denied or encouraged
by so... http://t.co/HlhkXf ... Feb 01, 2012
• RT @ShaanHurley: Watch @carlbass and @wadhwa discuss education, innovation, and future of manufacturing.
#whichwaynext http://t.co/2NbgiIKL Jan 30, 2012
• Future supply chains modular manufacturing with most parts coming from local recycling & a few high-tech
import parts http://t.co/XfuwWbH4 Jan 26, 2012
• Long and slow - but worth watching - return to local manufacturing as a service with mini-mills disruptive
innovation http://t.co/dXlfQYRS Jan 26, 2012

12. My Tweets (continued)
• RT @justinwolfers: Why will Obama single out "an economy built on American manufacturing" in the #SOTU?
What's wrong with those of us wi ... Jan 24, 2012
• RT @KurzweilAINews: Microreactors enable safer, more efficient manufacturing: Manufacturing products and
drugs will be safer and mor... ... Jan 23, 2012
• @timoreilly @johnmaeda @techreview @ydeologi US makes 19.4% world's manufactured goods—second to
China's 19.8% https://t.co/Uk2isnTj Jan 23, 2012
• RT @timoreilly: RT @johnmaeda On the relation between manufacturing & innovation. http://t.co/T5rnzIPv via
@techreview @ydeologi Jan 23, 2012
• RT @KurzweilAINews: Raspberry Pi starts manufacturing an ARM GNU/Linux box for $25: Raspberry Pi, a $25
computer, has gone into prod... ... Jan 16, 2012
• RT @masscustom: Interesting: Difficulties of established #3dprinting manufacturers to mimik disruptive user
innovation @MakerBot: http:/ ... Jan 15, 2012
• RT @auerswald: RT @trueventures: How AI and robotics will change manufacturing http://t.co/HHOqT4Fs from
@wadhwa and VentureBeat Jan 14, 2012
• Smart cities rethink mobility http://t.co/807F5KAY MIT Chin's vision local manufacturing of body, in wheel motor
battery grid Jan 08, 2012
• RT @Richard_Florida: US total compensation for manufacturing workers now 14th (BLS) abt same as Ireland/ Italy
- @erikbryn - http://t.co ... Dec 30, 2011
• RT @erikbryn: My MIT colleague Rod Brooks discusses how America can use robots to compete with China in
manufacturing: http://t.co/JRjx0 ... Dec 23, 2011
• @ireneclng good job! "And service systems are evolving. Future services include manufacturing, future of
manufacturing embedded in services" Dec 18, 2011

13. My Tweets (continued)
• The loss of manufacturing jobs often cited as a marker of America’s decline... Dr.
Atala printed a kidney on stage http://t.co/TQQdqM65 Dec 03, 2011
• RT @KurzweilAINews: Disruptions: the 3-D printing free-for-all: A 3-D printer at
home will not only change the nature of manufacturi... ... Nov 15, 2011
• Building Materials Reuse deconstruction curriculum for community colleges:
manufacturing as a local recycling service http://t.co/1lBuutm Jul 22, 2011 RT
@KurzweilAINews: Manufacturers turn to 3-D printing: This May, General Electric
announced it would “intensify focus” on additive ... ... Jul 22, 2011
• Manufacturing as a Local Recycling Service: Janet Unruh has the right idea in
Recycle Everything. See http://www... http://bit.ly/nxg0qw Jul 09, 2011
• Manufacturing as a Printing Service: Z Corp Burlington MA from National
Geographic on 3D printing of tools. See http://bit.ly/mYyU5m Jul 09, 2011
• Economist Debate: Manufacturing: Can a national economy thrive without a large
manufacturing sector? See the res... http://bit.ly/qfZ0iS Jul 09, 2011

14. My Tweets: Summary
• Renaissance of Regional Economic Development (RED)
• The Observatory of Economic Complexity

15. Innovation Framework
• Z2B = Zero to a Billion in Revenue in a under a Decade
– University startups (e.g., Google, Facebook, etc.)
– Challenge: Find a “Moore’s Law for Service System Scaling”
• Service Science Fundamentals
– Service is the application of knowledge for mutual benefit of
entities (value co-creation processes)
– Service innovations scale the benefits of new knowledge
globally, rapidly, and profitably
– Smart service systems include the customer, provider, and other
entities as sources of
capabilities, resources, demand, constraints, rights, responsibiliti
es in value co-creation processes
– Technology and organizational platforms support rapid scaling
processes (smart phones, franchises, etc.)

16. Innovation Framework: Structure
Universities &
Startups
Smart Service
Systems
Technology
Platforms
Integrators &
API Ecology
Customers
MIT, Stanford,
Berkeley, SJSU,
Purdue, UUtah,
UArizona
Tucson,
LinneausU
(Sweden),
Aalto (Finland),
and major
teaching,
research, and
startup
universities in
many nations
globally & their
startups
Smart Phone,
Devices,
Appliances,
Furniture
iPhone,
Android
Apple, Google,
Microsoft,
Samsung, IKEA
Individuals:
Personal and
Employee PSS
& DSS
Smart Vehicles,
Grid, Roads,
Stores, Homes,
Campuses
Driverless Car Google, Toyota,
Audi, Ford,
Deere, IKEA,
Starbucks, Tata
Individuals:
Personal &
Employee PSS
& DSS
Smart Schools,
Hospitals,
Businesses
Watson, CRM,
ERP, HCM,
SCM, PRM, EC2
IBM, HP, Cisco,
SAP, Amazon,
Salesforce
Institutions:
Enterprise PSS
& DSS
Smart Cities,
Regions, States,
Nations, Planet
Smarter City
Intelligent
Operation
Center
IBM, HP, Cisco,
Siemens,
Accenture
Institutions:
Enterprise PSS
& DSS

17. Innovation Framework: Funders
Source Motivation Mechanisms
Government Competitiveness, Close
knowledge gaps
Research and SBIR grants,
IRB’s and Offsets
Venture Capital ROI Equity Investments, Exits
(Go public, acquisitions)
Crowd-funding &
Prospective Customer-
funding
Outcomes Kickstarter.com, X-Prize,
Challenges, Kaggle.com,
Netflix
Industry Funding New Offerings, Platform &
Ecosystem Development
IP Agreements & Open
Innovation Grants
Foundations Social Benefits Grants
RED High Skill/High Pay Jobs Tax incentives, Property
discounts

18. Innovation Framework: Players
Role Supplies Benefits
University Faculty Course content/coaching Course improvements
University Students Learning labor Becomes more T-shaped
Industry Mentors Real-world challenges Talent pipeline
Professional Association Mentorship templates Members development
University Startups Offering for customers Potential customers
Platform Provider Potential to scale New users
Ecosystem & SI Provider Potential to scale New offerings
Customer Demand Outcomes
Funder Investment (See previous funder slide)
Service Science Faculty Orchestration & Expertise Close knowledge gaps

19. And Beyond… Utility Fog
• Ultimate vision of
material and energy
flows inseparable with
information flows
• Universal Building
Block
– Utility Fog:
Manufactured Things
– Cells:
Living Things

20. References
• The Circular Economy (Video) – Ellen MacArthur
Foundationhttp://www.youtube.com/watch?v=zCRKvDyyHmI
• The Internet of Things and the future of manufacturing (Interview)
– McKinsey
http://www.mckinsey.com/Insights/Business_Technology/The_
Internet_of_Things_and_the_future_of_manufacturing?cid=ot
her-eml-alt-mip-mck-oth-1306
• Changing the Dominant Logic: http://blog.egonl.com/?m=200902
• Rolls Royce: http://www.economist.com/node/18073351
• The Observatory of Economic Complexity
http://atlas.media.mit.edu
• Utility Fog: http://en.wikipedia.org/wiki/Utility_fog
• Utility Fog: The Stuff That Dreams Are Made Of:
http://www.kurzweilai.net/utility-fog-the-stuff-that-dreams-are-
made-of

21. Students For Smarter Planet:
”I have MET the future, and its students!”
Jim Spohrer
IBM UP Worldwide
PICMET 2013, San Jose, CA
August 1st, 2013
IBM Smarter Planet
IBM SSME Centennial Icon of Progress
Nano-Bio-Info-Cogno

22. Today’s Talk: S4SP
• Some statistics and brief discipline histories
• Some quotes
• Some strategy
– Sciences and Applied Arts: IBM UP Strategy
• Some possible futures

23. Some Short Histories:
Engineering Management Discipline
(service-science.info/archives/3138)
• 1950s & 1960s (Demand and Origins, Al Rubenstein et al.)
– World Events: Engineers promoted into management & executive ranks
– IEEE Transactions of Engineering Management
• 1970s & 1980s (Growth in many places, NSF Erik Block & Richie Henrick, et al.)
– World Events: Oil crisis and competitiveness concerns
– NSF adds engineering emphasis and computer science
– Industrial Engineering (IE) and Management Science (OR) degree programs
– World Events: Japan’s success and competitiveness concerns
– NSF Meeting, Textbooks, Growth in Degree programs and courses
• 1990s to present (Growth, Dundar Kocaoglu, Tarek Kahlil, et al.)
– World Events: Internet growth and business school minor
– PICMET, IAMOT, IRI, and others ( IEEE, IIE, etc.)
– Challenges going forward
• Academic Silos: Engineering (accreditation) and Management (minor)
• Hiring graduates into industry and industry participation in academic communities
– Opportunities going forward
• Strong interest in Asia

24. Information & Computer Science
• “The single strongest impulse for introducing
computers on campuses in the mid-1950s did
not come from the schools themselves or
from any federal agency, but instead from
IBM.”

25. Data Science
• “Data science incorporates varying elements
and builds on techniques and theories from
many fields… with the goal of extracting
meaning from data and creating data
products.”

26. By 2020, 35 Zettabytes per year
• What’s big today will look small in a decade
Google processes
> 24 Petabytes of data
in a single day
Facebook processes
10 Terabytes of data every
day
The Hadron Collider at CERN
generates 40 Terabytes
of data / sec
For every session, NY Stock
Exchange captures 1 Terabyte
of trade information
Twitter processes
7 Terabytes of data every day
250,000,000 tweets
2 Billion Internet users in 2011
By 2013, annual internet traffic
will reach 667 Exabytes

27. Urban Science
• Urban science is an interdisciplinary field that
studies diverse urban issues and problems

28. Service Science
• The transdisciplinary study of service, the
application of knowledge for mutual benefits
(value co-creation phenomena), in an ecology
of interacting many-to-many, nested,
networked viable service system entities.

29. Silicon Valley:
Past, Present, and Future
Steve Blank
www.steveblank.com
Twitter: sgblank

30. The Popular View of Silicon Valley
History
1910 1960 1970 1980 20001990
Innovation Networks
Fruit
Orchards
Personal
Computers
Integrated
Circuits
Internet
1930 1940 19501920
Fruit
Orchards
Fruit
Orchards
Steve Jobs
Moore/Noyce
Marc Andreessen
Hewlett & Packard

31. The Real Story of Silicon Valley
History
1910 1960 1970 1980 20001990
Innovation Networks
Microwaves/
Defense
Personal
Computers
Integrated
Circuits
Internet
1930 1940 19501920
Test
Equipment
Vacuum
Tubes

32. Terman and the Cold War
Silicon Valley’s 1st Engine of Entrepreneurship
Entrepreneurs
Military
Finance
Crisis ProfitMotivation
Cooperative
Culture Entrepreneurial
Outward-Facing
Tech Universities
Risk Capital
24/7 Utilities
Predictable
Economic System
Infrastructure Stable
Legal System
Technical
Labs/Universities
Steve Blank 23 Sept 2008
Free flow of
People/Information

33. Venture Capital
Silicon Valley’s 2nd Engine of Entrepreneurship
Crisis ProfitMotivation
Cooperative
Culture Entrepreneurial
Outward-Facing
Tech Universities
Risk Capital
24/7 Utilities
Predictable
Economic System
Infrastructure Stable
Legal System
Technical
Labs/Universities
Steve Blank 23 Sept 2008
Free flow of
People/Information
Entrepreneurs
Venture
Finance

34. Some Quotes
• The best way to predict the future is to inspire
the next generation of students to build it better
• The future is already here at universities it is just
not well distributed
• The core values of universities are learning,
discovery, and engagement
• All viable businesses and governments learn to
get smarter at scaling the benefits of new
knowledge to their customers and citizens.

35. Some Strategy

36. Some more strategy…
IBM Platforms for Entrepreneurs
• Smarter Cities Intelligent Operations Center Platform
• IBM helping university startups to scale up (growth)
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
36

37. 37
What’s UP at IBM?

38. 38
Those in-the-know say, “IBM is helping to build a Smarter Planet…”

39. 39
Smarter Planet = 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.
WORKFORCE
PRODUCTS
SUPPLY CHAIN
COMMUNICATIONS
TRANSPORTATION BUILDINGS
IT NETWORKS

40. 40
City challenges
Ryan Chin:
Smart Cities

41. 41
Smart Startup: Streetline

42. 42
Smart Neonatal ICU

43. 43
Land-population-energy-carbon
Carlo Ratti:
Senseable Cities

44. 44

45. 45

46. 46
Four commandments for cities of the future: Eduardo Paes at TED2012

47. 47
SC IOC as a Platform for Innovation

48. 48
48
 Identifies entrepreneurs developing
businesses aligning with our Smarter Planet
vision.
 SmartCamp finalists raised more than
$50m and received significant press in
Wall Street Journal, Forbes and
Bloomberg
in
Healthcare SmartCamp kickstart - Miami - May 15, 2012
Apply by April 27th
SmarterCities SmartCamp kickstart - New York - May 24, 2012
Apply by May 3rd
North America Regional SmartCamp - Boston - June 20 & 21, 2012
Apply by May 25th
apply now at www.ibm.com/isv/startup/smartcamp
Exclusive Networking and
Mentoring event
North America SmartCamp lead: Eric Apse, eapse@us.ibm.com
University Programs lead: Dawn Tew, dawn2@us.ibm.com

49. 49
What are the trends?
Digital Immigrant
Born: 1988
Graduated College: 2012
Digital Native
Born: 2012
Enters College: 2030

50. 50
Transportation: Self-driving cars
Steve Mahan:
Test “Driver”

51. 51
Water: Circular Economy

52. 52
Manufacturing: Circular Economy
Ryan Chin:
Urban Mobility
Baxter: Building the Future
Maker-Bot: Replicator 2

53. 53
Energy: Artificial Leaf

54. 54
Technology: Cognitive Computing

55. 55
55
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

56. 56
Buildings: Circular Economy
China Broad Group:
30 Stories in 15 Days

57. 57
Retail & Hospitality: Social Media

58. 58
Finance: Crowd Funding

59. 59
Health: Robotics & 3D Printing

60. 60
Education: Challenge-Based Sport

61. 61
Government: Parameterized Meta-Rules
• Innovativeness
• Equity
– Improve
weakest
link
• Sustainability
• Resiliency

62. 62
Competitive Parity – Achieved.
• The NFL touts parity—the idea
that any team can win on any
given Sunday. But this year,
parity has truly run wild.
• 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…

63. What is a T-shaped Student?
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
63
Many disciplines
Many sectors
Many regions/cultures
(understanding & communications)
Deepinonesector
Deepinoneregion/culture
Deepinonediscipline

64. Silicon Valley: How many places…?
• Help win a war? Terman
• Help launch new industries? Shockley
• Help launch many sub-industries? RAMAC
• Help improve improvement? Lean Startups
– Steve Blank: Why You Must Test Your Hypotheses
• http://www.youtube.com/watch?v=_w-NUOjwMto
• Boast so many great universities!
– Stanford, Berkeley, UCSC, UCSF, SJSU, etc.

65. IBM: How many companies…?
• 1. Make it to 100?
– IBM Centennial Film: 100 X 100 - A century of achievements that have changed the world
• http://www.youtube.com/watch?v=39jtNUGgmd4
• 2. Achieve #1 Patents > 20 yrs in a row?
– Twenty Years
• http://www-03.ibm.com/press/us/en/pressrelease/40070.wss
– Boy And His Atom
• http://www.youtube.com/watch?v=39jtNUGgmd4
• 3. Make computers smarter?
– Watson: Science Behind An Answer
• http://www.youtube.com/watch?v=DywO4zksfXw
– 5 in 5: New Capabilities
• http://www.youtube.com/watch?v=YwfJVwknvRo
• 4.Make ~100 acquisitions of big companies in a decade?
– Partnerworld
• http://www.youtube.com/watch?v=Iivc-7dLLhw
• 5. Help make a Smarter Planet?
– Nation by nation, state by state, city by city
• http://www.youtube.com/watch?v=2BadLt6XkyA
• http://www.youtube.com/watch?v=vuBBGYFonXM
– Internet of Thing
• http://www.youtube.com/watch?v=sfEbMV295Kk

66. The Future: My “Mentors”
• The future is already here at universities, it is
just not yet well distributed
– With apologies to Gibson
• The best way to predict the future is to
inspired the next generation of students to
build it better
– With apologies to Kay

67. 67
2030 and Beyond…. Government, Health, Education, Finance, etc.

68. 10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
68

69. Questions
• What is ISSIP?
• What is a service platform?
• What is service science?
• What is a T-shaped professional?
• How is this related to your work at IBM with universities?
• What are the important future trends you see?

70. What is ISSIP?
• Pronounced I-ZIP
• International Society
of Service Innovation
Professionals
• SIG Education &
Research
– T-shapes
– Service Science
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
70

71. What is a service platform?
• Access Places & Entities
– Scale benefits
– Of new knowledge
– Globally & rapidly
• Smart Phones & Watson
• Smarter City IOC
• Franchises
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
71

72. Service Science
• Emerging Discipline
– Service Science,
Management, and
Engineering (SSME)
• Service
– Not sector (ECON)
– Not capability (CS)
• Value Co-Creation
• Service System Entities
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
72
IBM SSME Centennial Icon of Progress

73. How do universities fit in?
• Best way to predict
the future is to inspire
the next generation to
build it better
• The future is already
here at universities it
is just not well
distributed
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
73

74. Growth
74

75. 75
Nesting
Matryoska dolls:
Origin Japanese

76. 76
I am nested in at least 10 systems
Level AKA ~No. People ~No. Entities Example
0. Individual Person 1 10,000,000,000 Jim
1. Family Household 10 1,000,000,000 Spohrer’s
2.Neighborhood Street 100 100,000,000 Kensington
3. Community Block 1000 10,000,000 Bird Land
4. Urban-Zone District 10,000 1,000,000 SC Unified
5. Urban-Center City 100,0000 100,000 Santa Clara
6.Metro-Region County 1,000,000 10,000 SC County
7. State Province 10,000,000 1,000 CA
8. Nation Country 100,000,000 100 USA
9. Continent Union 1,000,000,000 10 NAFTA
10. Planet World 10,000,000,000 1 UN

77. 77
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)200M
bees (social
division-of-labor)
60
transistor
(routine
cognitive work)
Evolution of Natural Systems & Service Systems
Unraveling the mystery of evolving hierarchical-complexity in new populations…
To discover the world’s architectures and mechanisms for computing non-zero-sum

78. 78
~100 years of US job transformations
Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis

79. 10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
79
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
Context: IBM 101

80. 80
Automobile
Technological Acceleration
0 25 50 100 125 15075
Years
25
50
100
TelephoneElectricity
Radio
Television
VCR
PC
Cellular
%Penetration
YEARS

81. 81
•iPhone/iPad app developer
•wireless marketing director
•microfinance infrastructure designer
•3D content developer for movies, TV
•social network manager
•deploying technology into the cloud
•organic solar cell development
•digital image management
Many top in-demand jobs in 2011 did not exist in 2005!
81

82. 82 82
U.S Department of Labor
estimates that today’s learner
will have 10-14 jobs…
by the age of 38!

83. 83
 Estimates are 85% of the jobs today’s learners will be doing
haven’t been invented yet
 they'll be using technologies that don't exist
 to solve problems we don't yet know are problems
83

84. 84
Five historical cycles …

85. 85
University: Four Missions
• Knowledge
– 1. Transfer (Teaching)
– 2. Creation (Research)
– 3. Application (Benefits)
• Commerce/Entrepreneurship
• Governance/Policymaking
– 4. Re-Integration (Challenge)
• Innovativeness, Equity
• Sustainability, Resilience
• Nested, Networked Holistic Service Systems
– Flows
– Development
– Governance
Nation
State/Province
City/Metro
University
College
K-12
Cultural &
Conference
Hotels
Hospital
Medical
Research
Worker
(professional)
Family
(household)
For-profits
Non-profits
U-BEE
Job Creator/Sustainer
Third Mission (Apply to Create Value)
is about U-BEEs =
University-Based
Entrepreneurial Ecosystems

86. Universities Matter #1
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
86
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)

87. Universities Matter #2
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
87
…But it can be costly, American student loan debt is over $900M

88. Universities Matter #3
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
88
“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.”

89. Universities Matter #4
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
89
What is a U-BEE? A local job creator/sustainer
Innovating “whole service” in all regions worldwide
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
Non-profits
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.”

90. On Campus IBMers
10/4/2013
© IBM 2013 IBM University Programs
worldwide accelerating regional
development (IBM UPward)
9090
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

91. 91
Measuring Quality-of-Life?
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)”

92. Data Science +
Urban Science +
Service Science =
Smarter Planet
Jim Spohrer
Director IBM University Programs
June 17, 2013

93. Sciences & Applied Arts
• All sciences study systems
– Physics, Chemistry, Biology, Information and
Computer Science, Service Science, etc.
• All applied arts change systems
– Management, Engineering, Design Arts, Public
Policy seek to apply rigorous scientific knowledge
to create better worlds to inhabit

94. 942013 ISSIP and/or its affiliates. All rights reserved.
ISSIPIntroductionto
CaliforniaCenterforServiceScience
Yassi Moghddam
Executive Director, ISSIP
yassi@ISSIP.org
twitter: @yassi_moghddam
(408) 318-0332
www.issip.org
September 13, 2013

95. Who….
Charlie Bess,
BOD Member, Vice
President, ISSIP;
HP Fellow, and VP
Ammar Rayes,
President, ISSIP;
Distinguished Engineer,
Cisco Services
Jim Spohrer
BOD Member, Secretary,
Treasure, ISSIP; Director
Global University
Programs, IBM
Yassi Moghaddam
Executive Director, ISSIP;
Formerly Bell Labs, AT&T, Lucent,
Wells Fargo, & several startups
Ana Pinczuk
BOD Member, ISSIP;
SVP Transformation, Cisco
Services
Haluk Demirkan
BOD Member, ISSIP;
Professor University of
Washington
Ralp Badinelli
BOD Member, ISSIP;
Professor Virginia Tech
Founded, July 2012
Jeff Welser
Vice President Elect, ISSIP;
Director Services Research, IBM

96. Why?
• Our world is becoming more
interconnected and complex
• Yet most organizations operate
is silos
• Most professional
organizations do a great job
of focusing on one discipline,
function, or industry sector
ISSIP is a professional society designed
to focus on the interconnected nature
of value co-creation for smart service
systems (tech, biz, social, etc.)
BREADTH
DEPTH
T-Shape
professionals can
innovate across
traditional
boundaries

97. • Professional Development
• Education
• Research
• Practices
• Policy Making
“To promote service
innovations for our
interconnected world.”
Through:
Special
Interest
groups
Committees Chapters
Students
Mentorship
Our Mission
Ambassadors
- Individual Members: > 360
- Institutional members: 3 and growing
- Service Systems: ICT, Education, Healthcare,
Transportation, Financials, Energy,
Government
- Universities: 55+
- Countries: 37+

98. ISSIP Special Interest Groups
• Existing SIGs
– Cloud Mobility
– Education & Research
– Energy and Power
– Service Futures
– Software Defined Networks
– User Experience
• Other topics: must relate to smart services….
Big Data & Analytics, IoT, Globalization,
Innovation Tools & Methods, and more…
• SIGs are proposed by members and
approved by the Board of Directors.
98
Outcomes
•White papers, journal
articles
•Influencing Standards
•Workshops
•Co-sponsoring or
presenting at conferences
•Surveys
•Research best practices for
smart service systems

99. ISSIP Ambassadors
• More than 15 Ambassadors and
growing…
• Link ISSIP to other professional
associations, research centers,
conferences, etc.
• Help ISSIP co-sponsor activities in
other conferences
more...
http://www.issip.org/learningcenter/valuenet
ork/

100. Academia-Industry-ISSIP Students Mentorship
• Goal: Co-create a superior mentorship expience
between ISSIP members including college students
academics, industry professionals, policy makers,
and members of other professional societies
• Focus: projects that address real business and
societal challenges
• Platform: pipeline of smart service projects of
mutual interest to:
• Students that make them more competitive for smart service
jobs
• Academicians, for smart services case development, and
research
• For industry partners to test a vetted pool of talent for hiring
• Participating Universities so far: Hult SF, SJSU
• Participating Companies so far: IBM, Cisco, HP
• Sample outcomes: http://www.issip.org/ISSIP-
student-mentorship-pilot-may to august-2013/
Regions 2.0
San Jose State University,
IBM, Cisco, HP, and ISSIP
now designing new
templates for regional
development through
service innovation!
Mentorship JobInternship

101. Professional Development
• ISSIP Certification, Badges, and Seals
– Certification Committee Chair: Professor Haluk
Demirkan, University of Washington,
– Committee Goals: Lead and define criteria for ISSIP
certifications and badges for
services, solutions, systems, courses and workshops,
– In the short term:
• “ISSIP Reviewed” already granted through Hult
International School of Business
– Courses, workshops, books, etc.
– In the long term:
• Develop BOK
• Develop testing, certification, and auditing criteria
• Offer professional certifications
• Professional Book Series – BEP, Co-editors: Dr. Jim
Spohrer, Dr. Haluk Demirkan
• Developing T-shape assessment instruments -
Professor Lou Freund, SJSU

102. Let’s work together…
1. Register at issip.org:
http://www.issip.org/join-the-
community
2. Inquire about becoming an
institutional member of ISSIP @
execdir@issip.org
3. Join or start a SIG:
www.issip.org/community/special-
interest-groups
4. Become an ISSIP Ambassador:
http://www.issip.org/community/a
mbassadors
5. Join a Committee:
http://www.issip.org/community/c
ommittees
6. Send ideas to execdir@issip.org
102

103. 1032013 ISSIP and/or its affiliates. All rights reserved.
Thank you!
Yassi Moghddam
Executive Director, ISSIP
yassi@issip.org
twitter: @yassi_moghddam
(408) 318-0332
www.issip.org

104. ISSIP Chapters
• Geographic chapters are
proposed by members and
approved by the Board of
Directors.
• First Chapter: ISSIP Germany
• Chapters for Switzerland, Japan,
UK, Italy, Jordan, Australia, and
others are planned.
104
ISSIP Germany

105. Committees
• Conferences Committee
– Oversee ISSIP Conference
activities
• Elections Committee
– Administers ISSIP Elections
• Nominating Committee:
– Administers ISSIP
nominations for various
elected positions
• Operations Committee
– Manages the tactical
operations of ISSIP
• Publications Committee:
– Set guidelines for and
manage ISSIP publications
• Certification Committee
– Leads and define criteria for
ISSIP certifications and badges
for services, solutions, systems,
courses and workshops, develop
BOK, develop testing and
auditing criteria
• Mentorship Committee
– Oversee ISSIP-industry-
academia Student Mentorship
Program
• New Members Committee
– Increase quantity of both Dues
Paying members and Individual
members