The document discusses the evolution of technology and its impact on business and design. It describes three ages: the age of physical machines, smart machines, and generative machines. The age of generative machines is driven by digital technology and is characterized by immaterial and ubiquitous assets, the separation of form and function, and an ecosystem of open platforms. Design must reconstruct products and services in this environment, focusing on experiences, generativity, and delayed specifications. The future of business involves designing ecosystems, experiences, and ongoing value creation through digital means.

1. digital & design

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“the future is already
here, but it is not very
evenly distributed.”
- William Gibson

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1.0

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two stories

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st story
1

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Harry and Charlie

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May 2007

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56 seconds long

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uploaded
by their father
for their godfather

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250 millions views
(as of June 2010)

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5,740 re-mix
(as of July 2010)

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nd story
2

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API
API API
The WordPress network
Plug'in
WordPress0Platform
A hypothetical website with three plug-ins with 1-3
Application Programming Interfaces (APIs) per plug-in
API
API
Plug'in API
Plug'in
API0
(internal)API0
(internal)
API0
(internal)

18. Number of Plug-ins: 13,491
Number of APIs: 288
(internal: 93)
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19. Color
Number of
Plug-ins
2939 2633 1992 1698 1051 1000 821 814
Average API
usage
7.29 4.22 5.71 8.81 1.27 6.98 2.93 3.68
Minimum
API usage
1 1 2 3 1 3 2 2
Maximum
API usage
93 12 16 24 5 21 9 10
Standard
Deviation
5.58 1.57 2.31 2.88 0.61 2.34 1.26 1.54

20. 11,0630Plug'ins0in0December02012

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Circos0Diagram

22. Number'of'plug-ins'in'each'year
0
7500
15000
22500
30000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Number'of'APIs'in'each'year
0
100
200
300
400
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
#0of0APIs
#0of0Plug'ins
79
325
115
21,100

23. 01/01/20080
660APIs,03980Plug'ins
01/01/20090
990APIs,012460Plug'ins
0Plug'in0Network0(2008'2009)

24. 01/01/20100
1420APIs,029400Plug'ins
01/01/20110
1640APIs,054880Plug'ins
0Plug'in0Network0(2010'2011)

25. 01/01/20120
2610APIs,094120Plug'ins
0Plug'in0Network0(2012)
12/01/20120
2880APIs,0134910Plug'ins

26. © copyright, youngjin yoocenter for design + innovation
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2.0

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evolution of the
industrial economy

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2.1

29. the age of
physical machine

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fire

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automation

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capital intensive

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managerial challenge
maximizing asset
utilization

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vertical integration
diversification

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managerial logic
economy of size and scale

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organizational forms
m-form hierarchy

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management tools
scientific management

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design
graphic design
industrial design

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2.2

40. the age of
smart machine

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managerial challenge
complexity
information overload

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management logic
modularization (design rules)
horizontal coordination

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organizational forms
network of distributed org.

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management tools
outsourcing
virtualization

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design
interaction design
organization design

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2.3

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the age of
generative machine

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digital technology

49. technology is no longer the main
obstacle for human imaginations

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digitization of tools and
works

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digitization of products

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digitization of contents

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digitization of time & space

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digitization of relationship

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digitization of triviality

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familiar images of
computing

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new images of
computing experiences

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73. what’s unique about
digital technology

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2.3.1

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it is immaterial

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physical machine

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physical products

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the economy of
scarcity

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digital assets

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digital products

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near zero, if not 0,
marginal cost

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the economy of
ubiquity

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this is why business
model became critical

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2.3.2

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separation of
form & function
(reprogrammable von Neumann computing architecture)

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separation of
contents & media
(general IP network)

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deconstruction of
products and industry

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walled garden of products
hardware
network0'00
distribuLon
contents
soMware
TV phone book music
hardware
network0'00
distribuLon
contents
soMware
hardware
network0'00
distribuLon
contents
soMware
hardware
network0'00
distribuLon
contents
soMware

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re-configuration of
new products
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents

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2.3.4

91. race against the machine
anyone can learn it

92. all you need is a $300 netbook

93. digital natives

94. infrastructure is here

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2.3.5

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a perfect storm for
generativity

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technology constantly
evolves beyond the
original design

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value is co-created with
users through (digital)
symbols and signs

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managerial challenge
deconstruction of products
reconfiguration of value system
convergence

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managerial logic
mutation
recombination
open innovation

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organizational forms
ecosystem of open
platform

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management + design
ecosystem design
experiential design
procrastinated binding

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Physical
machine
Smart
machine
Generative
machine
strategic use of
information
strategic use of
ecosystems
deconstruction of
traditional organizations
deconstruction of traditional
industrial systems
products
noun
platform
verb
things experiences
creativity generativity
craftsmanship procrastinated binding

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3.0

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design

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3.1

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what is desirable?

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value comes from
meeting unmet needs
there are only few basic
human needs

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110. Internet of
things
Mobile
Internet
Big Data
Analytics
Cloud Service
A Big Picture
place
time
things peopleexperiences
atoms bits
B2BB2C
(c) Youngjin Yoo, 2014

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computed experience
“value is created through algorithmic reality”

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3.2

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production of
signs & symbols

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which one is real?

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which one is real?

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which one is real?

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3D printing

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flipping the value
proposition

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physical product as
avatar of “real” digital
products

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3.3

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liquidification of
categories

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re-configuration of
new products
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents

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digital deconstructs

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design reconstructs

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properties of
digital artifacts
7

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programmable

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addressable

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sensible

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communicable

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memorizable

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traceable

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associabile

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re-configuring
products and services

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the problems of
digital artifacts

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Smart TV
TV = an idiot box
Smart TV = Smart Idiot Box

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smart
TV
TV PC
lean
forward
lean
backward

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re-imagining
meaning and value

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by
DESIGN

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who’s your
competition?

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the Tyranny of
Noun

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are you
a noun company
or
a verb company?

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procrastinated
binding
“value is created after the product was purchased”

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4.0

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next generation
business cannot be
discovered

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it must be designed
and built

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so stop looking!

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start designing!