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Japan may 11 future of cities and universities 20120511 v3

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this is a talk about the future of cities and universities and their innovativeness, equity, sustainability, and resiliency

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Japan may 11 future of cities and universities 20120511 v3

  1. 1. IBM University Programs worldwide, accelerating regional development (IBM Upward) Future of Cities & Universities: A Service Science PerspectiveDr. James (“Jim”) C. Spohrer, spohrer@us.ibm.comInnovation Champion and Director IBM UPward(University Programs worldwide, accelerating regional development)The 4th Symposium on Systems InnovationUniversity of Tokyo, Tokyo, Japan, Friday May 11, 2012 © 2012 IBM Corporation
  2. 2. What is the future? We can imagine many possibilities… Kurzweilai.net2 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  3. 3. California Human Development Report 2011:From meaning-of-life to quality-of-life…. http://www.measureofamerica.org/docs/APortraitOfCA.pdf3 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  4. 4. Imagining quality-of-life innovations…4 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  5. 5. Innovation as Game/Sport:Players, interactions, outcomes  Competition  Cooperation  Value-cocreation5 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  6. 6. AEIOU of sciences – service science  Abstract Entities – service systems – Learning to apply knowledge to compete & cooperate  Interactions – value propositions  Outcome Universals – value-cocreation (or not) – Increasing capabilities and quality-of-life for individuals Cities compete & cooperate Universities compete & cooperate6 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  7. 7. Nations compete and cooperate: Universities important% WW GDP and % WW Top-500-Universities (2009 Data) 9 Japan 8 7 y = 0,7489x + 0,3534 R² = 0,719 China 6 Germany 5 France 4 United Kingdom Italy % G D o b P a g l 3 Russia Brazil Spain Canada 2 India Mexico South Korea Australia Turkey Netherlands 1 Sweden 0 0 1 2 3 4 5 6 7 8 9 % top 500 universities7 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  8. 8. Universities Worldwide Accelerating Regional Development “When we combined the impact of Harvard’s direct spending on payroll, purchasing and construction – the indirect impact of University spending – and the direct and indirect impact of off-campus spending by Harvard students – we can estimate that Harvard directly and indirectly accounted for nearly $4.8 billion in economic activity in the Boston area in fiscal year 2008, and more than 44,000 jobs.”8 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  9. 9. Universities key to regions Nation  Three Streams State/Province City/Metro – Transfer knowledge For-profits U-BEE Job Creator/Sustainer – Create knowledge Cultural & Conference University Hospital Medical College Hotels Research K-12 – Apply knowledge to co-create value Non-profits Worker (professional) Family (household)  Nested Holistic Systems – Flows – Development Third Stream is about U-BEEs = – Governance University-Based Entrepreneurial Ecosystems9 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  10. 10. Abstract entities (service systems): Individuals & Institutions Learning TECHNOLOGY IMMERSION Any Device Learning Primary School In div idu Secondary al s PERSONAL LEARNING PATHS School Le ar Workforce Student-Centered Processes Higher nin Skills g Education Co nt Continuing inu KNOWLEDGE SKILLS Education um The Learning Communities Educational Intelligent Continuum • Aligned Data u m GLOBAL INTEGRATION • Outcomes Insight t inu n Services Specialization Instrumented Co Economic in g Sustainability • Student-centric rn • Integrated Assessment L ea ECONOMIC ALIGNMENT Interconnected io ns • Shared Services t ut ti ns Systemic View of Education • Interoperable Processes I http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html 10 10 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  11. 11. Four measures  Innovativeness  Equity  Sustainability  Resiliency11 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  12. 12. Resiliency: Capability to rebuild (and recycle) rapidly China Broad Group: 30 Stories in 15 Days12 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  13. 13. Societal resiliency includes all levels Matryoska dolls: Origin Japanese13 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  14. 14. Eleven levels of systemsLevel AKA ~No. People ~No. Entities Example0. Individual Person 1 10,000,000,000 Jim1. Family Household 10 1,000,000,000 Spohrer’s2.Neighborhood Street 100 100,000,000 Kensington3. Community Block 1000 10,000,000 Bird Land4. Urban-Zone District 10,000 1,000,000 SC Unified5. Urban-Center City 100,0000 100,000 Santa Clara6.Metro-Region County 1,000,000 10,000 SC County7. State Province 10,000,000 1,000 CA8. Nation Country 100,000,000 100 USA9. Continent Union 1,000,000,000 10 NAFTA10. Planet World 10,000,000,000 1 UN14 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  15. 15. Cities: land-population-energy-carbon Carlo Ratti: Senseable Cities15 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  16. 16. “Back-up” Tokyo  Resort  Tourism  Business  Backup City16 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  17. 17. City challenge: buildings and transportation Ryan Chin: Smart Cities17 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  18. 18. Manufacturing as a local recycling & assembly service Ryan Chin: Urban Mobility18 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  19. 19. Self-driving cars Steve Mahan: Test “Driver”19 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  20. 20. Technology has a cost  “The burden of knowledge” Cesar Hidalgo: Societal Knowledge20 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  21. 21. The limits of our individual knowledge21 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  22. 22. Societal and individual knowledge Herbert Simon: Ben Jones: Bounded Rationality Burden of Knowledge22 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  23. 23. Specialization has benefits Adam Smith: David Ricardo: Division of Labor Comparative Advantage23 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  24. 24. T-shaped professionalsdepth & breadth Many cultures Many disciplines Many systems (understanding & communications) BREADTH Deep in one discipline Deep in one system Deep in one culture DEPTH (analytic thinking & problem solving)2424 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  25. 25. What improves Quality-of-Life? Service System Innovations * = US Labor % in 2009. A. Systems that focus on flow of things that humans need (~15%*) 20/10/10 1. Transportation & supply chain 2/7/4 2. Water & waste recycling/Climate & Environment2/1/1 7/6/1 3. Food & products manufacturing 1/1/0 4. Energy & electricity grid/Clean Tech 5/17/27 5. Information and Communication Technologies (ICT access) B. Systems that focus on human activity and development (~70%*) 1/0/2 6. Buildings & construction (smart spaces) (5%*) 24/24/1 7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*) 2/20/24 7/10/3 (wealthy) (21%*) 8. Banking & finance/Business & consulting 5/2/2 9. Healthcare & family life (healthy) (10%*) 10. Education & work life/Professions & entrepreneurship (wise) (9%*) 3/3/1 C. Systems that focus on human governance - security and opportunity (~15%*) 0/0/0 11. Cities & security for families and professionals (property tax) 1/2/2 12. States/regions & commercial development opportunities/investments (sales tax) 0/19/0 13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities “61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”25 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  26. 26. Systems-Disciplines Framework: Depth & Breadth systems Systems that focus on flows of things Systems that support people’s activities Systems that govern transportation & ICT & retail & healthcare food & education city state nation disciplines supply chain water & energy products & electricity cloud building & hospitality banking & family &work secure scale laws waste construction & finance behavioral sciences Customerstakeholders e.g., marketing Provider management sciences e.g., operations Observe Stakeholders (As-Is) political sciences Authority e.g., public policy learning sciences Competitors e.g., game theory and strategy cognitive sciences People e.g., psychologyresources system sciences Technology e.g., industrial eng. information sciences Observe Resource Access (As-Is) Information e.g., computer sci organization sciences Organizations e.g., knowledge mgmt History social scienceschange e.g., econ & law (Data Analytics) decision sciences Imagine Possibilities (Has-Been & Might-Become) Future e.g., stats & design (Roadmap) run professions Run e.g., knowledge worker Transformvalue (Copy) transform professions e.g., consultant Realize Value (To-Be) Innovate innovate professions (Invent) e.g., entrepreneur 26 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  27. 27. What is service science? A service system? The ABC’s? Design/ Cognitive Science Systems Engineering “service science is “a service system is athe transdisciplinary study of human-made system to improve service systems & provider-customer interactions value-cocreation” and value-cocreation outcomes, by dynamically configuring resource Marketing access via value propositions, most often studied by many disciplines, one piece at a time.” The ABC’s: The provider (A) and a customer (B) transform a target (C) Computer Science/ Artificial Intelligence Economics & Law Operations 27 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  28. 28. Recombination (integration) has benefits Joseph Schumpeter: Brian Arthur: Creative Destruction Nature of Technology28 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  29. 29.  Identifies entrepreneurs developing businesses aligning with our Smarter Planet vision.  SmartCamp finalists raised more than $50m and received significant press inExclusive Networking and Wall Street Journal, Forbes and BloombergMentoring event - 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 29 North America SmartCamp lead: Eric Apse, eapse@us.ibm.com University Programs lead: Dawn Tew, dawn2@us.ibm.com29 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  30. 30. US National Academy of 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 & Rights30 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  31. 31. Students for a Smarter Planet  YouTube - animated!! – http://www.youtube.com/watch?v =P7bEyPrtFHM  and another – http://www.youtube.com/watch?v=WklJujtIip4  Tweet comments to… – @wendywolfie  Continuously Improving Product-Service Systems = Smarter Systems – Simplify the message – Provide advanced organizers31 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  32. 32. IBM’s Leadership Changes IBM has 426,000 employees worldwide 2011 Financials 22% of IBM’s revenue  Revenue - $ 106.9B in Growth Market  Net Income - $ 15.9B countries; growing at 11% in 2011  EPS - $ 13.44  Net Cash - $16.6B More than 40% of IBM’s workforce conducts business away from an office 55% of IBM’s WorkforceIBM operates in 170 is New to the company incountries around the globe the last 5 years Number 1 in patent generation for 19100 Years of Business consecutive years ;& Innovation in 2011 6,180 US patents awarded in 2011 The Smartest Machine On Earth 9 time winner of the 5 Nobel President’s National Laureates Medal of Technology & Innovation - latest “Let’s Build a Smarter award for Blue Gene Planet" Supercomputer 32 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  33. 33. Up-Skill = New Venture = Graduates with Smarter Planet skills = High-GrowthCycle = Acquisition = IBMer moving from Acquisition/ New IBM BU mature BU to acquisition (Growing) = IBMer moving into IBMer on Campus role (help create graduates = High-Productivity/University-Region1 with Smarter-Planet skills, Mature IBM BU help create Smarter Planet oriented new ventures; (Shrinking) Refresh skillsUniversity-Region2 IBM33 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  34. 34. Regional Competitiveness and U-BEEs:Where imagined possible worlds become observable real worldshttp://www.service-science.info/archives/1056Innovations NationUniversities/ “The future is already State/Province here (at universities),Regions City/RegionCalculus (Cambridge/UK) For-profits it is just not evenlyPhysics (Cambridge/UK) U-BEEComputer Science (Columbia/NY) distributed.”Microsoft (Harvard/WA) Job Creator/SustainerYahoo (Stanford/CA) Hospital Cultural & UniversityGoogle (Stanford/CA) Medical Conference CollegeFacebook (Harvard/CA) Research Hotels K-12 “The best way to Non-profits Worker (professional) Family (household) predict the future is to (inspire the next generation of students to) build it better.” U-BEEs = University-Based Entrepreneurial Ecosystems, City Within City 34 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  35. 35. Sustainability/Resilience & Innovation: Local-p global-i supply chains World as System of Systems World (light blue - largest) Nations (green - large) States (dark blue - medium) Cities (yellow - small) Universities (red - smallest) Cities as System of Systems Developed Market -Transportation & Supply Chain Nations -Water & Waste Recycling (> $20K GDP/Capita) -Food & Products ((Nano) -Energy & Electricity -Information/ICT & Cloud (Info) -Buildings & Construction Emerging Market -Retail & Hospitality/Media & Entertainment Nations -Banking & Finance (< $20K GDP/Capita) -Healthcare & Family (Bio) -Education & Professions (Cogno) -Government (City, State, Nation) Nations: Innovation Opportunities - GDP/Capita (level and growth rate) - Energy/Capita (fossil and renewable)35 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  36. 36. ~250 years of infrastructure transformations Installation Crash Deployment Irruption Frenzy Synergy Maturity • Formation of Mfg. industry 1 The I ndust r i al 1771 Panic • Repeal of Corn Laws 1829 Revol ut i on 1797 opening trade • Standards on gauge, time A ge of St eam Panic 2 and Rai l ways 1829 1847 • Catalog sales companies 1873 • Economies of scale A ge of St eel , Depressio • Urban development 3 El ect r i ci t y 1875 n • Support for interventionism 1920 1893 and Heavy Engi neer i ng • Build-out of Interstate A ge of Oi l , Crash 4 A ut omobi l es 1908 1929 highways 1974 • IMF, World Bank, BIS and Mass Pr oduct i on Coming period of A ge of I nf or mat i on Credit Crisis 5 and 1971 2008 Institutional Adjustment and Production Capital Tel ecommuni cat i ons Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages; (Edward Elar Publishers, 2003).36 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  37. 37. ~100 years of US job transformations Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis37 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  38. 38. We need better frameworks, theories, and models of… Four I’s Cultural Information – Infrastructure (Quality-of-Life Measures) – Individuals – Institutions – Information Individuals Institutions Four Measures (Skills) (Rules, Jobs) – Innovativeness – Equity – Sustainability Societal Infrastructure – Resiliency (Technologies & Environment)38 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  39. 39. Service systems entities learn to apply knowledge Learning To Apply Knowledge Do It Invent It Exploitation Exploration Run Transform Innovate Operations L Internal Incremental Maintenance Copy It External Radical Insurance Interaction Super-Radical 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.39 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  40. 40. 14B Where is the “Real Science” - wonders to appreciate? 10KBig Bang In the many sciences that study the natural and human-made worlds… Cities (Natural Unraveling the mystery of evolving hierarchical-complexity in new populations… (Human-Made Time World) To discover the world’s architectures and mechanisms for computing non-zero-sum Entity Architectures (ЄN) of nested, networked Holistic-Product-Service-Systems (HPSS) World) writing (symbols and scribes, stored memory and knowledge) written laws ECOLOGY (governance and stored control) sun (energy) money earth (governed (molecules & transportable valuestored energy) stored value, “economic energy”) bacteria(single-cell life) bees (social sponges transistor division-of-labor)(multi-cell life) (routine cognitive work) universities (knowledge workersclams (neurons) printing press (books 40 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporationtrilobites (brains) 200M 60 steam engine (work)
  41. 41. What is the role of the university? Donald Clark: Pedagogic Change41 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  42. 42. 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 yesterdays 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 NYU42 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  43. 43. Service Science: Conceptual Framework Ecology (Populations & Diversity) Entities Interactions Outcomes (Service Systems, both (Service Networks, (Value Changes, bothIndividuals & Institutions) link, nest, merge, divide) beneficial and non-beneficial) Identity Value Proposition Governance Mechanism Reputation (Aspirations & Lifecycle/ (Offers & Reconfigurations/ (Rules & Constraints/ (Opportunities & Variety/ History) Incentives, Penalties & Risks) Incentives, Penalties & Risks) History) Access Rights Measures (Relationships of Entities) (Rankings of Entities) lose-win win-win prefer sustainable lose-lose win-lose non-zero-sum Resources Stakeholders outcomes, (Competences, Roles in Processes, (Processes of Valuing, i.e., win-win Specialized, Integrated/Holistic) Perspectives, Engagement)  Resources: People, Organizations, Technology, Shared Information  Resources: Individuals, Institutions, Infrastructure, Information  Stakeholders: Customers, Providers, Authorities, Competitors  Measures: Quality, Productivity, Compliance, Sustainable Innovation  Access Rights: Own, Lease, Shared, Privileged Spohrer, JC (2011) On looking into Vargo and Luschs concept of generic actors in markets, or “Its all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201. 43 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  44. 44. Visit IBM Almaden Research Center, San Jose, CA Upcoming Conferences – July 2012 • ISSS San Jose • HSSE San Francisco More Information – Blog • www.service-science.info – Twitter • @JimSpohrer – Presentations • www.slideshare.net/spohrer – Email • spohrer@us.ibm.com 44 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  45. 45. Thank-You! Questions? “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.” – GeddesDr. James (“Jim”) C. SpohrerInnovation Champion &Director, IBM University Programs & open worldwide entrepreneurship research (IBM UPower) WWspohrer@us.ibm.com 45 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  46. 46. building smarter systems isnt simply a proposal or theory, but a practical reality, with clear steps, quantifiable benefits and best practices - Sam Palmisano Where are the opportunities? Every city and region!46 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  47. 47. IBM Centennial: Icon of Progress47 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  48. 48. NPR: Out of Economic Chaos, A New Order May Be Rising  HAWLEY: The grand total of U.S. automotive fatalities from 1975 to the present, about one and a half million people. Now, the grand total of U.S. fatalities from 1775 to the present in every military conflict weve had is 1.3 million. So in other words, in the last roughly 35 years weve killed more people with cars than we have in more than 300 years of warfare.  I think if you step back and look at cars from a sort of 35,000 foot level, youve got to wonder why were doing this to ourselves. And theres a tremendous amount of industry and employment built up around it. But suppose it all changed.  One way it could change is if human werent allowed to drive cars anymore. Or let me put it differently. If cars were much more appealing because they drove themselves and did it safely.  And this isnt just Jetson stuff. Theres a brilliant computer scientist, artificial intelligence researcher at Stanford, named Sebastian Thrun. Hes invented a car that drives itself. You can hop in the car and you never touch the wheel or the pedals. It navigates through all the traffic snarls. It wont run over little old ladies in Pasadena. It wont even run over a squirrel.  If you could eliminate the seven million accidents per year, the 2.9 million injuries, the 40,000 fatalities, that would be enormous boon. But if you think about what would happen in the short term. Lets suppose in the next five or ten years this idea comes to fruition.  Think about all the disruption that could cause. You might not have to own a car. Well, that might be good. Youd have a garage that you could use to start up a company instead of storing a couple of rusting hulks of metal in it. Youd never have to call Tom and Ray Magliozzi again, because you wouldnt have to fix your car.  There wouldnt be a parking problem, because youd push a little button on your iPhone, a smart car would zip up, pick you up, drop you off where you need to go. That means no more valets, no more taxi drivers, no more meter maids, no more traffic cops. Youd never hear a car horn, because why would a robot car honk at another robot car. Makes no sense.  But thats an example of the sort of change that in the short term can cause immense of amounts of anxiety and upheaval. http://www.npr.org/2011/09/24/140766796/out-of-economic-chaos-a-new-order-may-be-rising48 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  49. 49. What are the benefits of more education? Of higher skills? …But it can be costly, American student loan debt is over $900M49 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  50. 50. ~30 years of skill transformations: depth & breadth 15 10 Expert Thinking 5 Complex Communication 0 Routine Manual Non-routine Manual -5 Routine Cognitive -10 1969 1974 1979 1984 1989 1994 1999 Levy, F, & Murnane, R. J. (2004). The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton University Press.50 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  51. 51. From Work Done By the Institute for the Future (IFTF.org) Transdisciplinary = T-Shaped People (Breadth & Depth)51 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  52. 52. A major societal transformation is underway…  Driven by “The Death of Distance” - Cairncross, Economist (1997)  Manifesting in new forms of “Global Competition” – Friedman, The World is Flat (2005)  Characterized as a “Gathering Storm” by Americans – US National Academies (2005, 2007, 2011)52 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  53. 53. The Gathering Storm Report  The Gathering Storm report is focused upon the ability of Americans to compete for employment in a job market that increasingly knows no geographic boundaries.  “The United States takes deserved pride in the vitality of its economy, which forms the foundation of our high quality of life, our national security, and out hope that our children and grandchildren will inherit every greater opportunities.”  “The possession of quality jobs is the foundation of a high quality life for the nations citizenry.”  “While only four percent of the nations workforce is composed of scientists and engineers, this group disproportionately creates jobs for the other 96 percent.”  “Further, the pace of creation of new knowledge appears by almost all measures to be accelerating”  “While this progress by other nations is to be both encouraged and welcomed, so too is the notion that Americans wish to continue to be among those people who do prosper.”  “The Gathering Storm committee contends that it is strongly in America’s interest for all nations to prosper. Aside from its humanistic merit this outcome should produce a safer world for everyone…”53 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  54. 54. The Gathering Storm Recommendations“It would be impossible not to recognize the great difficulty of carrying out Gathering Storm recommendations, such asdoubling the research budget, in today’s fiscal environment… However… One seemingly relevant analogy is that anon-solution to make an over-weight aircraft flight-worthy is to remove an engine.” – Gathering Storm Revisited“The fate of empires depends on how they educate their children.” – Aristotle“The best way to predict the future is to inspire & enable the next generation to build it better.” –IBM UPward  I. Improve inputs to universities – Fix “broken” K-12 system (invest in K-12)  III. Improve outputs from universities – Fix “broken” University system (invest in Higher Education)  II. Improve transitions from university to first R&D job – Fix “broken” Employment system (increase R&D funding)  IV. Improve speed of regional innovation – Fix “broken” Governance system (align visa, tax, etc. regulations)54 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  55. 55. Rising Above The Gathering Storm, Revisited for All Regions  Regions are entities that must learn to learn better – Regions = Nations, States, Cities, etc… – Learning = Improving global competitiveness – “History is a race between education and catastrophe” – H.G. Wells  Regional entities = “Holistic product-service systems” – that provision access to high-quality “whole service” to the people in them – that also provision access to high quality products & services globally – to contribute to a higher quality-of-life, both inside and outside their region – service science studies product-service systems & customer-provider interactions (value-cocreation)  Regional innovation = “Entities learning”55 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  56. 56. Societal Transformation Changes How Regions Compete  From Value-Creation Model: …Against Each Other (Zero-Sum Mindset) – During different time intervals some regions pull far ahead, and some fall far behind… eventually the people in lagging regions migrate to leading regions, eventually lagging regions “collapse” and are absorbed into other regions… human capital is wasted in lagging regions, and human suffering grows in lagging regions as they fall further behind everyone else…. disenfranchised populations create a security threat for all….  To Value-CoCreation Model: …With/For Each Other (Non-Zero-Sum Mindset) – The gains of innovators are “taxed” based on geography of their customers as well as home location of provider (providers cannot succeed without customers)… as innovators seek to expand their markets into other regions successfully the “governments” of both provider and customer regions see tax revenues increase… accelerating both “transform” and “innovate” capabilities… accelerating entities learning and regional innovation. – Innovator regions benefit the most, but the incentive is not to pull so far ahead that other regions collapse, but to improve the quality of customers over time as well, wealthier customers buy more, and regions compete in cycles of progress that move everyone forward…  A Simple Example: “The Huppenthal Method” Style of Competition – Students compete, but “winning” is for everyone to complete the work, and beat their previous best time – Leaders help those lagging behind catch-up, peer-mentoring and win-win NZS mindset – Demonstrated accelerated learning times and elevated student engagement levels56 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  57. 57. In Sum….  Gathering Storm reflects a major societal transformation underway – Driven by “The Death of Distance” and manifesting in new forms of “Global Competition”  The very nature of regional competition is being transformed … – From Value Creation Model: “Competition Against” Worldview, Zero-Sum Mindset – To Value CoCreation Model: “Competition With/For” Worldview: Non-Zero-Sum Mindset  The transformation depends on increasing “trust” … a hard thing to do – However, increasing interconnectedness suggests there is no other viable alternative – Cascade failures in globally interconnected economies  Increasing trust can only be earned by performance against a shared innovation roadmap, or vision for a better future for all… – For example, climate change and sustainable environment – For example, increased global security and financial stability  It is time to get our priorities straight and focus on what matters most… – ”You can always depend on the Americans to do the right thing, after exhausting all other possibilities.” – Sir Winston Churchill57 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  58. 58. Pegasus Global Holdings $200M Smart City Living Lab  7 September 2011  The Center for Innovation, Testing and Evaluation will cover 20 square miles in New Mexico, and will resemble a mid-sized American city, including urban canyons, suburban neighborhoods, rural communities and distant localities.  Potentially be able to house up to 35,000 people and will operate as if people are actually living there  The facility will allow technology companies, university and urban planners to test the "positive and negative impacts emerging technologies - Smart Grid, intelligent traffic systems, cyber security and more  estimated cost $200 million to build/launch (or ~$6K per person for infrastructure) – Economy Hotel Projects ~$30K per person to build/launch – Highest Priced Luxury Resort Hotels ~$600K per person to build/launch58 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  59. 59. What We Do: The “6 R’s” (not to be confused with 3 R’s) 1. Research Research awards focus on grand challenge problems and big bets https://www.ibm.com/developerworks/university/research 2. Readiness Access to IBM tools, methods, and course materials to develop skills https://www.ibm.com/developerworks/university/academicinitiative 3. Recruiting Internships and full-time positions working to build a smarter planet http://www.ibm.com/jobs 4. Revenue Improve performance, the university as a complex enterprise (city within city) http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html 5. Responsibility Community service provides access to IBMers expertise/resources http://www.ibm.com/ibm/ibmgives/ 6. Regions Regional innovation ecosystems – incubators, entrepreneurship, jobs http://www.ibm.com/ibm/governmentalprograms/innovissue.html59 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  60. 60. Human Activities: Sociotechnical System Evolution Estimated world (pre-1800) and then U.S. Labor Percentages by Sector 120 100 Services (Info) 80 Services (Other) 60 Industry (Goods) Agriculture 40 Hunter-Gatherer 20 0 A A A A 50 00 50 00 00 50 Y Y Y Y 18 18 19 19 0 20 20 0 0 00 00 00 00 20 00 10 20 20 Estimations based on Porat, M. (1977) Info Economy: Definitions and Measurement The Company of The Pursuit of Strangers : A Natural Organizational History of Economic Intelligence, Life by James G. March by Paul Seabright Exploitation vs exploration60 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  61. 61. Human Population: Sociotechnical System Evolution Information Technologies, etc. Scientific Method, Industrialization Colonial Expansion & Economics, Rise of the modern managerial firm & Politics, Education, Healthcare & Effects of Agriculture, Shadows in the Sun, The Visible Hand: The by Wade Davis Managerial Revolution in “Ethnosphere. sum total of all the thoughts, beliefs, myths, and American Business institutions brought into being by the by Alfred Dupont Chandler human imagination”61 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  62. 62. Evolution: SSME+D (for Design) for a Smarter PlanetWhat is Smarter Planet? Harmonized smarter systems. INSTRUMENTED INTERCONNECTED INTELLIGENT We now have the ability People, systems and We can respond to changes to measure, sense and objects can communicate quickly and accurately, see the exact condition and interact with each and get better results of practically everything. other in entirely new by predicting and optimizing PRODUCTS ways. IT NETWORKS COMMUNICATIONS for future events.WORKFORCE SUPPLY CHAIN TRANSPORTATION BUILDINGS62 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  63. 63. Growth of Service in National Economies World’s Large Labor Forces US shift to service jobs A = Agriculture, G = Goods, S = Service 2010 2010 Nation Labor % WW A % G % S % 40yr Service Growth (A) Agriculture: Value from China 25.7 49 22 29 142% harvesting nature India 14.4 60 17 23 35% (G) Goods: U.S. 5.1 1 23 76 23% Value from making products Indonesia 3.5 45 16 39 34% (S) Service: Brazil 3.0 20 14 Daryl Pereira/Sunnyvale/IBM@IBMUS, 66 61% Value from IT augmented workers in smarter systems Russia 2.4 10 21 69 64% that create benefits for customers and sustainably improve quality of life. Japan 2.2 5 28 67 45% Nigeria 1.6 70 10 20 19% Bangladesh 2.1 63 11 26 37% Germany 1.4 3 33 64 42% NationMaster.com, International Labor Organization Note: Pakistan, Vietnam, and Mexico now larger LF than Germany63 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  64. 64. Growth of Service Revenue at IBM 2010 Pretax Income Mix Revenue Growth by Segment SYSTEMS (AND FINANCING)SOFTWARE 17% Services 44% Software 39% Systems SERVICES IBM Annual ReportsWhat do IBM Service Professionals Do? Run IT & enterprise systems for customers,help Transform customer processes to best practices, and Innovate with customers.64 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  65. 65. Priorities: Succeeding through Service Innovation - A Framework for Progress (http://www.ifm.eng.cam.ac.uk/ssme/) Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008) IBM University Programs worldwide, accelerating regional development (IBM Upward) 1. Emerging demand 2. Define the domain 3. Vision and gaps 4. Bridge the gaps 5. Call for actions Service Service Service Stakeholder The white paper offers a starting point to - Innovation Systems Science Priorities Growth in service Customer-provider To discover the Education GDP and jobs interactions that underlying enable value principles of Skills Develop programmes Service quality cocreation complex service & Mindset & qualifications & productivity systems Dynamic Research Environmental configurations of Systematically Encourage an Knowledge friendly & resources: people, create, scale and interdisciplinary & Tools approach sustainable technologies, improve systems organisations and Urbanisation & information Foundations laid Business aging population by existing Employment Increasing scale, disciplines Develop and improve & Collaboration Globalisation & complexity and service innovation technology drivers connectedness of Progress in Government roadmaps, leading to a service systems academic studies doubling of investment Opportunities for and practical tools Policies in service education businesses, B2B, B2C, C2C, & Investment and research by 2015 governments and B2G, G2C, G2G Gaps in knowledge individuals service networks and skills Glossary of definitions, history and outlook of service research, global trends, and ongoing debate © 2012 IBM Corporation
  66. 66. Priorities: Research Framework for the Science of Service Pervasive Force: Leveraging Technology to Advance Service Strategy Development Execution Priorities Priorities Priorities Fostering Service Stimulating Effectively Branding Infusion and Growth Service Innovation and Selling Services Improving Well-Being Enhancing the Service Enhancing through Experience through Service Design Transformative Service Cocreation Optimizing Measuring and Creating and Maintaining Service Networks Optimizing the Value of a Service Culture and Value Chains Service Source: Global Survey of Service Research Leaders (Ostrom et al 2010)66 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  67. 67. Service Science: Conceptual Framework Ecology (Populations & Diversity) Entities Interactions Outcomes (Service Systems, both (Service Networks, (Value Changes, bothIndividuals & Institutions) link, nest, merge, divide) beneficial and non-beneficial) Identity Value Proposition Governance Mechanism Reputation (Aspirations & Lifecycle/ (Offers & Reconfigurations/ (Rules & Constraints/ (Opportunities & Variety/ History) Incentives, Penalties & Risks) Incentives, Penalties & Risks) History) Access Rights Measures (Relationships of Entities) (Rankings of Entities) lose-win win-win prefer sustainable lose-lose win-lose non-zero-sum Resources Stakeholders outcomes, (Competences, Roles in Processes, (Processes of Valuing, i.e., win-win Specialized, Integrated/Holistic) Perspectives, Engagement)  Resources: Individuals, Institutions, Infrastructure, Information  Resources: People, Organizations, Technology, Information  Stakeholders: Customers, Providers, Authorities, Competitors  Measures: Quality, Productivity, Compliance, Sustainable Innovation  Access Rights: Own, Lease, Shared, Privileged Spohrer, JC (2011) On looking into Vargo and Luschs concept of generic actors in markets, or “Its all B2B …and beyond!” Industrial Marketing Management, 40(2), 199–201. 67 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  68. 68. Service system entities configure four types of resources Rights No-Rights  First foundational premise of 2. Technology/ • People/ service science: Physical Environment Individuals – Infrastructure Service system entities dynamically configure four types of resources 4. Shared – Resources are the building Not-Physical 3. Organizations/ Information/ blocks of entity Institutions Symbolic architectures Knowledge  Named resources are: – Physical or Formal service systems can contract to configure resources/apply competence – Not-Physical Informal service systems can promise to configure resources/apply competence – Physicist resolve disputes Trends & Countertrends (Balance Chaos & Order):  Named resources have: (Promise) Informal <> Formal (Contract) – Rights or (Relationships & Attention) Social <> Economic (Money & Capacity) – No Rights (Power) Political <> Legal (Rules) – Judges resolve disputes (Evolved) Natural <> Artificial (Designed) (Creativity) Cognitive Labor <> Information Technology (Routine) (Dance) Physical Labor <> Mechanical Technology (Routine)Spohrer, J & Maglio, P. P. (2009) (Relationships) Social Labor <> Transaction Processing (Routine)Service Science: Toward a Smarter Planet. (Atoms) Transportation <> Communication (Bits)In Introduction to Service Engineering. (Tacit) Qualitative <> Quantitative (Explicit)Editors Karwowski & Salvendy. Wiley. Hoboken, NJ.. (Secret) Private <> Public (Shared) (Anxiety-Risk) Challenge <> Routine (Boredom-Certainty) (Mystery) Unknown <> Known (Justified True Belief)68 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  69. 69. Service system entities calculate value from multiple stakeholderperspectives Value propositions coordinate & motivate resource access  Second foundational premise of service science Stakeholder Measure Pricing Basic Value Perspective Impacted Decision Questions Proposition – Service system entities calculate (the players) Reasoning value from multiple stakeholder perspectives – Value propositions are the building 1.Customer Quality Value Should we? Model of customer: Do blocks of service networks (Revenue) Based (offer it) customers want it? Is there a market? How large? Growth rate?  A value propositions can be viewed as a request from one service system to another to run an algorithm (the value Productivity Cost Model of self: Does it play to 2.Provider Can we? proposition) from the perspectives of (Profit, Mission, Plus our strengths? Can we deliver (deliver it) multiple stakeholders according to Continuous it profitably to customers? culturally determined value principles. Improvement, Can we continue to improve? Sustainability)  The four primary stakeholder perspectives are: customer, provider, 3.Authority Compliance Regulated May we? Model of authority: Is it legal? authority, and competitor (Taxes and (offer and Does it compromise our Fines, Quality integrity in any way? Does it – Citizens: special customers deliver it) of Life) create a moral hazard? – Entrepreneurs: special providers – Parents: special authority – 4.Competitor Sustainable Strategic Will we? Model of competitor: Does it Criminals: special competitors Innovation (invest to put us ahead? Can we stay (Substitute) (Market make it so) ahead? Does it differentiate share) us from the competition? Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley. Hoboken, NJ..69 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  70. 70. Service system entities reconfigure access rights to resources by mutually agreed to value propositions  Third foundational premise of service Competitor Provider Customer Authority science S P C A – Service system entities reconfigure access rights to resources by mutually agreed to value propositions (substitute) OO OO – Access rights are the building blocks of LC LC the service ecology (culture and information) SA SA  Access rights PA PA value-proposition – Access to resources that are change-experience owned outright (i.e., property) dynamic-configurations – Access to resource that are time leased/contracted for (i.e., rental car, home ownership via mortgage, insurance policies, etc.) – Shared access (i.e., roads, web service = value-cocreation information, air, etc.) B2B B2C – Privileged access (i.e., personal thoughts, inalienable kinship B2G relationships, etc.) G2C provider resources G2B customer resources Owned Outright G2G Owned Outright C2C Leased/Contract C2B Leased/ContractSpohrer, J & Maglio, P. P. (2009)Service Science: Toward a Smarter Planet. Shared Access C2G Shared AccessIn Introduction to Service Engineering. Privileged Access *** Privileged AccessEditors Karwowski & Salvendy. Wiley. Hoboken, NJ..70 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation
  71. 71. Service system entities interact to create ten types of outcomes ISPAR descriptive model  Four possible outcomes from a two player game lose-win win-win Win (coercion) (value-cocreation) Provider lose-lose win-lose Lose (co-destruction) (loss-lead) Lose Win Customer  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 4Maglio 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)71 IBM UPward (University Programs worldwide – accelerating regional development) © 2012 IBM Corporation

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