Accelerating Change 2004
Service Science, an emerging multidiscipline to
accelerate the coevolution of business-technology-work
innovations
Industry-AcademicGovernment
Collaboration Needed
November 6, 2004 | Contact Jim Spohrer (spohrer@us.ibm.com)
Director, Almaden Services Research
Open Office Hour: Wed 4-5pm PST, 408-927-1928
http://almaden.ibm.com/coevolution
http://www.almaden.ibm.com/asr
Accelerating Change 2004
Today’s Talk
 Part 1: Zooming in on accelerating change – what’s really changing?
12,000,000,000 year view – emergence of life and human culture
12,000 year view – rise in human population
200 year view – rise of the large managerial firm, and this thing called services –
what’s that all about?
 Part 2: Are services even the slightest bit interesting?
Adam Smith’s view – services are parasites on the rest of the economy
Colin Clark’s view – Smith, Marx, Stalin made the error of neglecting services
Dramatic growth of service sector – the intangible economy
Emergence of Service Science discipline
 Part 3: So what? What’s the big deal?
From loosely guided to designed evolution of capabilities… (maybe)
Work-capability evolution (collaboration, augmentation, delegation, automation)
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© 2004 IBM Corporation
Accelerating Change 2004
Part 1: Zooming in on accelerating change
 What’s really changing?
 12,000,000,000 year view – emergence of life and human culture
 12,000 year view – rise in human population
 200 year view – rise of the large managerial firm, and this thing
called services
– what’s that all about?
3
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
12B years of capability evolution & accelerating change
Billion Years Ago
Natural Capabilities
Generations Ago
Human Capabilities
12
Big Bang (EMST)
100,000
Speech
11.5
Milky Way (Atoms)
750
Agriculture
8
Sun (Energy)
500
Writing
4.5
Earth (Molecules)
400
Libraries
3.5
Bacteria (Cell)
40
Universities
2.5
Sponge (Body)
24
Printing
0.7
Clams (Nerves)
16
Accurate Clocks
0.5
Trilobites (Brains)
5
Telephone
0.2
Bees (Swarms)
4
Radio
0.065
Mass Extinctions
3
Television
0.002
Humans
Tools & Clans
Co-evolution
2
Computer
1
Internet/e-Mail
0
GPS, DVD, WDM
Global Brain: The Evolution of Mass Mind from the Big Bang to the 21st Century
by Howard Bloom
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© 2004 IBM Corporation
Accelerating Change 2004
12,000 years: Human population growth from 5M to 6B people
200 years: Rise of the modern managerial firm
Rise of the modern managerial firm
Effects of Agriculture,
Colonial Expansion & Economics,
Scientific Method, Industrialization
& Politics, Education, Healthcare &
Information Technologies, etc.
The Visible Hand: The Managerial Revolution in American Business
by Alfred Dupont Chandler
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© 2004 IBM Corporation
Accelerating Change 2004
Part 2: Are services even slightly interesting?
 Adam Smith’s view – parasites on the rest of the economy
 Colin Clark’s view – economic residual (but growing rapidly)
 Dramatic growth of service sector – the intangible economy
 Emergence of Service Science discipline
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© 2004 IBM Corporation
Accelerating Change 2004
200 year view: Services dominate
Top Ten Nations by Labor Force Size
(about 50% of world labor in just 10 nations)
A = Agriculture, G = Goods, S = Services
Nation
% WW %
Labor A
%
G
%
S
25 yr %
delta S
China
21.0
50 15
35
191
India
17.0
60 17
23
28
U.S.
4.8
3 27
70
21
Indonesia
3.9
45 16
39
35
Brazil
3.0
23 24
53
20
Russia
2.5
12 23
65
38
Japan
2.4
5 25
70
40
Nigeria
2.2
70 10
20
30
Banglad.
2.2
63 11
26
30
Germany
1.4
3 33
64
44
>50% (S) services, >33% (S) services
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2004
2004
United States
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Services:
Value from enhancing the
capabilities of things (customizing,
distributing, etc.) and interactions between things
The largest labor force migration
in human history is underway,
driven by urbanization,
global communications,
low cost labor, business growth
and technology innovation.
© 2004 IBM Corporation
Accelerating Change 2004
Services in an economy drive up human capability growth
Developing nations that invest in government services, health and education
services, financial and business services, transportation services, utility services,
communication services, and wholesale and retail services (growth of their service
economy) create large populations of service labor – removing “un-freedoms,” doing
valuable work for others. (see Amartya Sen, Development as Freedom)
Example: medical, legal,
and IT work in India
Business
Services
Financial & information
Professional & business
Extractive
Sector
Consumer
Infrastructure
Services
Trade
Services
Transportation & warehousing
Utilities & communication
Public
Administration
Government
Social/personal
Education & healthcare
Services
Manufacturing
Leisure & hospitality
Sector Source: Dorothy I. Riddle (1986) Service-Led Growth. Praeger, NY
Development as Freedom
by Amartya Sen
8
Wholesale & retail
http://www.almaden.ibm.com/coevolution
1998 Nobel Prize
Winner Economics
© 2004 IBM Corporation
Accelerating Change 2004
Business of production (Solow’s model)
 Production is measure of results or “goals achieved”
Production per capita (Y) as a function of output per worker (L) and capital assets per worker
(K) and investment per worker (I)
Investment drives technology progress and improves the efficiency of labor; accumulates
over time as capital assets
Today: Six billion people (L) with the capital assets created by one hundred billion people
throughout history (K) and innovation investments (I) to increase efficiency of L, K, and I
 Innovation impact will be realized in terms of…
More workers (L): Healthy – healthcare services
More capital assets (K): Wealthy – financial services, retail services, transportation services
More investment (I): Wise – education services, information services, financial services
Growth Theory: An Exposition
by Robert M. Solow
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© 2004 IBM Corporation
Accelerating Change 2004
IT investment drives up service sector productivity growth
 Worldwide IT spend
36% Financial and Information Services
13% Government
9% Retail and Wholesale
8% Professional and Business Services
(20% manufacturing)
 US CAGR in Labor Productivity
4.4% Financial and Information Services
3.8% Government
3.8% Retail and Wholesale
2.9% Professional and Business Services
(1.4% manufacturing)
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© 2004 IBM Corporation
Accelerating Change 2004
Economic Distinctions & Evolution of Value Growth
Economic
Offering
Commodity
Goods
Packaged
Goods
Commodity
Services
Consumer
Services++
Business
Services++
Economy
Agrarian
Industrial
Service
Experience
Transformation
Economic
Function
Extract
Make
Deliver
Stage
Co-create value
growth
Nature of
Offering
Fungible
Tangible
Intangible
Memorable
Effectual
Key
Attribute
Natural
Standard
Custom
Personal
Value growth
relationship
Method of
Supply
Stored in
Bulk
Inventory of
product
Delivered
On Demand
Reveal over
duration
Sustained over time
Seller
Trader
Manufacturer
Provider
Stager
Collaborator
Buyer
Market
Customer
Client
Guest
Collaborator
Factors of
Demand
Characteristics
Features
Benefits
Sensations
Capabilities
(Cultural Values)
Based on (Pine & Gilmore, 1999), Table 9-1, pg 170.
The Experience Economy
by B. Joseph Pine II, James H. Gilmore
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© 2004 IBM Corporation
Accelerating Change 2004
What you may not know… IBM led in the creation of
Computer Science departments at universities
Now IBM is working to
Establish Service Science
The biggest costs were in changing the organization.
One way to think about these changes is to treat the
Organizational costs as an investment in a new asset.
Firms make investments over time in developing a new
process, rebuilding their staff or designing a new
organizational structure, and the benefits from these
Investments are realized over a long period of time.”
Eric Brynjolfsson, “Beyond the Productivity Paradox”
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© 2004 IBM Corporation
Accelerating Change 2004
Relationship of Service Science to Existing Academic Areas:
The center balances three key factors: business value, IT process, organizational culture
1. Service Engineering
2. Service Operations
1990-2004
1900-1960 14. Computer &
Information Sciences
Process: Information Technology
15. Management of
Innovation
3. Service Management
4. Service Marketing
6. Agent-based computational economics
17. Operations Research
18. Systems Engineering
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7. Computational
Organization Theory
21 18
1 11
10
5
13
7
2 17
3
6
4
8 12
15
16 27
22
9 25
8. Human Capital
Management (HCM)
9. Experimental
Economics
10. AI & Games
11. Management of
Information Systems
12. Computer Supported
Collab. Work (CSCW)
13. Human Performance
Tech. & Measurement
13
16. Organization Theory
14
5. Social Complexity
People:
Organizational
Culture
1960-1990
http://www.almaden.ibm.com/coevolution
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26
19
20
19. Management Science
20. Game Theory
21. Industrial Engineering
22. Marketing
23. Managerial
Psychology
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Capital:
Business
Decisions
24. Business
Administration (MBA)
25. Economics
26. Law
27. Sociology
Before 1900 28. Education
© 2004 IBM Corporation
Accelerating Change 2004
Part 3: So what? What’s the big deal?
 From loosely guided to designed evolution of capabilities… (maybe)
 Work evolution
Improved collaboration (communications & coordination)
Improved augmentation (tools)
Improved delegation (outsourcing)
Improved automation (self service)
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© 2004 IBM Corporation
Accelerating Change 2004
From loosely guided to more designed evolution of capabilities…
Human System
Tool System
(maybe)
Service provider helps
the client by doing some
of it for them
(in a custom way)
Augment
(incentives)
(tool)
1
Service provider helps
the client by doing all
of it for them
(in a standard way)
Collaborate
Z
2
Delegate
Automate
(outsource)
(self-service)
3
4
Incent People
(Social systems with intentional agents)
The choice to
change work practices
requires answering
four key questions:
- Should we? (Business Value)
- Can we? (Technology)
- May we? (Governance)
- Will we? (Work Priorities)
Harness Nature
(Technology systems with stochastic parts)
Example: Call Centers
Collaborate
(1970)
Experts: High skill people on phones
Augment
(1980)
Tools: Less skill with FAQ tools
Delegate
(2000)
Market: Lower cost geography (India)
Automate
(2010)
Technology: Voice response system
Bootstrapping: Douglas Engelbart, Coevolution, and the Origins of Personal Computing
by Thierry Bardini
“Increasing our collective capabilities to address complex, urgent problems by improving improvement”
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© 2004 IBM Corporation
Accelerating Change 2004
Collaborate: Emergence of Collective IQ
 FOXP2 and the Evolution of
Language, by Alec MacAndrew
http://www.evolutionpages.com/FOXP2_language.htm
…Detective story from a family with
slurred speech to genes that influence
brain development and enable speech
(Speech pathology, linguistics, genetics,
embryogenesis, neurophysiology,
anthropology, primate evolution, etc.)
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 “With enough eyeballs, all bugs are
shallow”
 “With a large enough smart mob, all
inferences are shallow”
 Relationship oriented computing tools
Amazon – Recommendation system
E-Bay – Reputation system
Google – Relevancy ranking
The Symbolic Species:
The Co-Evolution of
Language and the Brain
by Terrence W. Deacon
Smart Mobs
by Howard Rheingold
Open Innovation
by Henry Chesbrough
The Cathedral &
the Bazaar
by Eric S. Raymond
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
WorldBoard
Collaborate (continued)
Connections
by James Burke
Six Degrees: The Science
of a Connected Age
by Duncan J. Watts
Emergence: The Connected
Lives of Ants, Brains, Cities,
and Software
by Steven Johnson
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© 2004 IBM Corporation
Accelerating Change 2004
Augment: Telerobotics
Doctor: United States
Patient: France
First transatlantic telesurgery – September 2001
Roundtrip 14,000 km, time lag 200 milliseconds
Flesh and Machines: How Robots Will Change Us
by Rodney Brooks
“The brains of people in poorer countries will be hired to control the physical-labor robots, the remotepresence robots, in richer countries. The good thing about this is that the persons in that poorer country will
not be doing the dirty, tiring work themselves. It will be relatively high-paying and desirable to work for
many places where the economy is poor. Furthermore, it will provide work in those places with poor
economies where no other work is available.” (146-147)
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© 2004 IBM Corporation
Accelerating Change 2004
http://www.cio.com/offshoremap/
Delegate: Outsourcing
Measure freedom
60 Minutes (1/11/04) : Out of India
Development as Freedom
by Amartya Sen
Measure money
The Lexus and the Olive Tree:
Understanding Globalization
by Thomas L. Friedman
1998 Nobel Prize
Winner Economics
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© 2004 IBM Corporation
Accelerating Change 2004
Automate: 3D Printing (a.k.a. stereolithography)
Printing Organs
BUILDING BONES. A rat's skull
regenerates better with a new
bone-promoting scaffold (left)
than with a less-sophisticated
scaffold (right).
F.E. Weber/University Hospital Zurich
“This Parker Hannifin emissions filter, a
crankcase vapor coalescer, is made out of
PPSF (polyphenylsulfone), a rapid prototyping
material from Stratasys. Parker Hannifin bolted
this filter onto a 6.0-liter V8 diesel engine block,
and then let the engine run for about 80 hours
to test filter-medium efficiency. The prototype
filter did just fine. It collected blow-by gases
containing 160°F oil, fuel, soot, and other
combustion by-products. It didn’t leak. And
except for some staining, the filter didn’t appear
to have degraded at all.” By Lawrence S. Gould
Printing Teeth & Bone
Printing 3D Gadgets
Printing 3D Electronics
Rapid Manufacturing: The Technologies and
Applications of Rapid Prototyping and Rapid Tooling
by S. S. Dimov, Duc Truon Pham
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© 2004 IBM Corporation
Accelerating Change 2004
In the past, work has changed relatively slowly…
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© 2004 IBM Corporation
Accelerating Change 2004
In the service economy, work changes rapidly…
Science-technology and business innovations constantly reconfigure work.
Service science seeks to understand and design improved reconfigurations.
Science
Social Science,
Economics,
Org. Behavior
Individual
(inside/outside)
Cognitive
Science
Brain (inside)
Neurophysiology
Cell (inside)
Proteomics
Gene (inside)
Genomics
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Science produces Data, drives Info Tech
Tech underlies new Products & Services
New Products & Services drive Business
Group (outside)
Technology
http://www.almaden.ibm.com/coevolution
Business
Financial
Services, Legal,
Insurance,
Government
Education,
Communication
Healthcare,
Public
Healthcare,
Industrial
Healthcare,
Distribution
© 2004 IBM Corporation
Accelerating Change 2004
Perhaps technology can help search for improvements in
the reconfigurations space…
Blue Gene, as its name suggests, is aimed at the drug-development market.
Scientists hope eventually to model how proteins fold – a process that is
important in designing drugs that can block cancer cells and other diseases.
Computational organization theory and agent-based computational economics
are potential future directions.
36.01 teraflops (Linpack benchmark)
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© 2004 IBM Corporation
Accelerating Change 2004
Emergence of Service Science
Understand service phenomena to better optimize across three levels impacted by rise of service economy

Economic goals at three levels
1. Nations: Maximize GDP / Capita per year
Note nations have many other goals, including environment, health, education, defense, quality of life for citizens, high-skill, high-pay jobs, etc.
2. Businesses: Maximize Revenue / Employee and Profits / Employee per year
Note increasingly businesses are adding additional values, such as sustainable environment, work-life balance, etc.
3. Individuals: Maximize Income / Time
Note in a survey of US information technology workers, base-pay rated fourth in overall goals, behind challenge, stability, and flexibility of
work experience.

Economic goals are achieved by four plans, productivity level is the key attribute
1. Follow demand: Migrate labor to high productivity industries/offerings/jobs where demand exceeds supply
2. Create demand/value innovation: Invent new high productivity industries/offerings/jobs
3. Repair supply: Invest to transform low productivity industries/offerings/jobs(skills); including leap-frog productivity strategy
4. Protect supply: Invest to protect low productivity industries/offerings/jobs(skills) in an effort to buy time, and if lucky catch next wave

The study of value innovation & labor productivity are important to service science
Historically, what has determined the rise in demand for particular types of services? What types of innovation have led to a rise in the demand for
particular types of services? What types of innovation have led to a rise in labor productivity in particular industries?
Already empirical evidence indicates that effective IT-enabled productivity gains requires aligning technology, business/value, and organizational
culture innovations. People can resist change or help accelerate change depending on the alignment of all three factors.
As economic goals are achieved, wealth increases, and increasingly other goals take priority, hence the value of economic transactions will not
simply be measured in financial terms, side-effects matter. Economic transactions will need to maximize value add beyond financial metrics.
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© 2004 IBM Corporation
Accelerating Change 2004
A Preliminary Definition of Service Science
 Service Science is the study of business methods to create
and capture value, technology tools to re-engineer processes,
and organizational culture practices to incent and align
people, and their collective impact on effectiveness and
efficiency in the performance of services work.
People
Human & Organizational
Performance
(PIP = 1.1 to 10)
Recent studies of IT Productivity Paradox indicate that
technology tools, business methods, and organizational
culture must align to achieve return on investment for IT.
The services industry must be viewed as a collection of
interacting systems, where the history of the systems
(legacy) matters as much as new events in understanding
what should, can, may, and will happen next.
Process
Business Optimization,
Professional Services Automation
(PIP = 1.1 to 4)
Effectiveness means working on the right things that matter to
the business and efficiency means doing the work according
to best practices. Productivity depends on both effective and
efficient performance.
Services are typically simultaneously produced (by the provider)
and consumed (by the client). The provider and the client
can each be individuals, organizations, or automated
systems.
Capital
Value Based Management
(PIP = 1.1 to 2)
PIP: Potential for Improvement of Performance
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© 2004 IBM Corporation
Accelerating Change 2004
Technology Projections
History of Technology
History of Work
Coevolution
History of Business
Work Projections
Business Projections
Service Science
Industry
Academic
Government
Collaboration
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© 2004 IBM Corporation
Accelerating Change 2004
EXTRA SLIDES
November 6, 2004 | Contact Jim Spohrer (spohrer@us.ibm.com)
Director, Almaden Services Research
Open Office Hour: Wed 4-5pm PST, 408-927-1928
http://almaden.ibm.com/coevolution
http://www.almaden.ibm.com/asr
Accelerating Change 2004
This talk…
 Is about accelerating innovation…
By improving technology and organizations and work
Service science to accelerate the coevolution of businesstechnology-work innovations
 Is not about assessing risks…
 Is not about betting on the future...
Things That Make Us Smart: Defending Human Attributes in
the Age of the Machine
by Donald A. Norman
Examples: Watch, Writing; Metric: Symbols & Models
Survival of the Smartest: Managing Information for Rapid
Action and World-Class Performance
by Haim Mendelson, Johannes Ziegler
Metric: Awareness, Decisions, Communication, Focus, Infrastr.
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© 2004 IBM Corporation
Accelerating Change 2004
Risks – not today’s talk








Privacy violations (social issues)
Unequal access (social issues)
Censorship (social issues)
Mischief and crime (social issues)
Environmental damage (systemic issues)
Glitches and out of control (systemic issues)
Overload (cognitive, social, and systemic issues)
Also alienation, narrowing, deceit, degradation,
intrusion, inequality, etc. (and many more issues
associated with new technologies of all sorts
throughout the history of humans which is also
(incidentally) the history of technology & organizations)
The Future Does Not Compute: Transcending the Machines in Our Midst
See NetFuture (http://www.netfuture.org/) by Steve Talbott (stevet@oreilly.com)
(also see Chapter 7of Andy Clark “Natural-Born Cyborgs” titled “Bad Borgs?”))
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© 2004 IBM Corporation
Accelerating Change 2004
Betting on the future – not today’s talk
 But if you want to bet, check out Longbets.org, one of a growing
number of websites dedicated to betting on the future
 Many bets such as Featured Bet on 20040208: Douglas C. Hewes
predicts: "By 2025 at least 50% of all U.S. citizens residing
within the United States will have some form of technology
embedded in their bodies for the purpose of tracking and
identification."
read the argument »
Stuart Brand, author of “The Clock of the Long Now”
Founder, Longbet.org
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© 2004 IBM Corporation
Accelerating Change 2004
What makes us smarter? Human system & Tool system
 Capability evolution = things that make us smart (our organizations & tools)
Growth of capabilities to create and achieve goals, intentionally and parsimoniously
Growth of win-win games over win-lose; higher payoffs; lower risks; lower maintenance (entropy)
Growth of capabilities to sense, communicate, decide, act; Growth of capabilities to bud and scale
 Slowly: In the past 12 billion years (2 million years), evolution has been
driving what has been making things (humans) smarter
Atoms, Molecules, Cell, Life, Body, Nerves, Brains, Swarms, Humanity…
 Rapidly: In the past 200 years, organizations have been driving what has
been making us smarter – business-technology-work coevolution
Citizen - 230 years ago it was government – rise of modern democracy (intangible - sustainable freedom)
Worker - 150 years ago it was business – rise of modern managerial firm (intangible - efficient value)
Consumer – 80 years ago buy more than make; Shareholder – 20 years ago; upside for growth of businesses
 Very Rapidly: In the past 50 years, information technology has been driving
what has been making us smarter – service economy dominates
Only in the last fifty years with the discovery of DNA (bio), creation of digital computing technology (info), ability to
manipulate matter at the atomic scale (nano), and rapid advancement of cognitive science to better understand
human thought processes (cogno) has information processing in natural, social, and technological substrates been
perceived as “converging” – discoveries in one area leading to advances/applications in the others
Shadows in the Sun, by Wade Davis
“Ethnosphere: It's really the sum total of all the thoughts, beliefs, myths, and institutions
brought into being by the human imagination. It is humanity's greatest legacy, embodying
everything we have produced as a curious and amazingly adaptive species.”
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© 2004 IBM Corporation
Accelerating Change 2004
Business Implications: Three examples
 Healthy: More healthy people to boost effective labor
Our Bodies & Our Environment
Someday Personalized Pharmaceuticals (nano for sensors, delivery, design)
 Wealthy: More capital assets per worker to boost effective labor
Our Material Goods (Sustainable, Cheaper, Stronger)
Someday On Demand Materials (nano for manufacturing materials)
 Wise: Better investment decisions to boost efficiency of labor
Our Thinking and Perception (Access to Information)
Someday Learning Conversations (nano for compute performance, interface)
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© 2004 IBM Corporation
Accelerating Change 2004
Healthy
Rational drug development requires managing enormous complexity. Pharmaceutical companies are beginning to differentiate themselves on the
power of their information technology platforms. IT Platform intellectual property is likely to be more valuable than content (gene sequences, metabolic
pathways, protein structures, etc.)
Personalized
Pharmaceuticals
alternative splicing turns
40,000 genes into 500,000
messages
DNA
RNA
Protein
e.g., Modafinil enhances
wakefulness and vigilance
1.5 million proteins
interacting in complex
networks create hundreds of
millions of metabolic
pathways
Pathways
Phenotype
hundreds of millions of
40,000 genes (approx.100 million
post translational
pathways influenced by the
bases) represent less than 3% of
modification turns
environment and stochastic
the genome (approx. 3 billion
500,000 messages
processes create 6 billion
bases). The function of the
into 1.5 million
different individuals
remaining 97% remains elusive.
proteins
Historically, 220 targets have generated $3trillion of value. Industrialized genome sequencing has created
a target rich, lead poor environment that will slowly reverse over the next several years as in-silico biology
drives the discovery of new lead compounds.
DNA to Phenotype = 300 terabytes per person x 6 billion persons = 1800 billion terabytes of data
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© 2004 IBM Corporation
Accelerating Change 2004
Wealthy
Material Goods










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Environmentally friendly, sustainable production
Cheaper, Stronger, Lighter, Durable, Active, etc.
Smart, polymorphic, chromatically active materials
Clothing and Textiles – stain resistant
Computing technologies – roll-to-roll manufacturing
Cars and Vehicles
Roads
Houses and Buildings
Furniture and Appliances
Foods
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© 2004 IBM Corporation
Accelerating Change 2004
Wise
Access to information & better investment decisions
Semantic Web and Natural Language Capabilities
Learning Conversations
Trillions of Calculations per Second
100,000
APPLICATIONS
---------------------Human Like Behavior
“HAL”
10,000
Predictive Modeling
1,000
Protein Folding
100
Nuclear Simulation
10
Chess Playing
1
1997
2000
2005
2010
2015
Peter Bernstein’s against the gods…
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© 2004 IBM Corporation
Accelerating Change 2004
50 Years: Information technology connecting islands of
information (created by people) into larger networks
Growth rates for:
3.00E+17
2.50E+17
Nano: Transistors made per second
2.00E+17
1.50E+17
transistors
1.00E+17
5.00E+16
Bio: Gene sequenced per second,
Cell divisions observed per second,
fMRI regions scanned per second
0.00E+00
1989
1991
1993
1995
1997
1999
About 10 billion transistors made per second
in 2004, doubling each 18 months
Worldwide Production of Transistors on all
ICs (Source: NSF)
Info: Bytes storage made per second
Cogno: Emails per second, IM per second
Google searchers per second
Converging Technologies for Improving Human Performance:
Nanotechnology, Biotechnology, Information Technology and
Cognitive Science
by Mihail C. Roco (Editor), William Sims Bainbridge (Editor)
36
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© 2004 IBM Corporation
Accelerating Change 2004
Model of capabilities: Outside-Inside Framework
Nature, Organizations, Technology: But where is the metric?
Relative Position
Capability Areas
External (outside the body; environmental)
Materials - Cost, Affordances, Dynamics
Agents – Organizations, Bots, Animals
Places – Real, Virtual, Mixed
Mediators - Tools
External (outside the body; personal)
Mediators – Wearables, Mobile Tools
Internal (inside the body; temporary)
Ingestibles – Medicines, Foods
Internal (inside the body; permanent)
Organs – Implants, Sensor & Effectors
Skills – Learning, New Uses of Old
Genes – New Species, Devel. Process
Outside-Inside Framework can be used to analyze the past, and speculate about futures.
37
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© 2004 IBM Corporation
Accelerating Change 2004
Outside-Inside Framework Applied: Past & Future
How much have cognitive capabilities been increasing?
 - 100,000 Generations: Speech
New Species (Kind of Agent)
New Use of Old Sense (sounds -> symbols: language)
 - 500 : Writing
New Mediator: Store symbols for later use (and New Skills = Scribes)
 - 400 : Libraries, 40 Universities, 24 Printing
New Mediator, Places: Communicate/Distribute (and Agents = Organizations)
 - 16 : Accurate Clocks for Navigation & More
New Mediator: Measure (and Agents = Organization)
 - 5 : Telephone, 4 - Radio, 3 - TV, 2 - Computers, 1 - Internet
New Mediator: Communicate/Distribute (and Agents = Organizations/Businesses)
New Use Old Sense: Stories (e.g., Why Honeymooners = Flintstones)

-0.5 :GPS/Sensors for Navigation & More
New Mediator: Measure (and Agents = Organizations/Businesses)
 +0.5 : On-Demand e-Business (?business on demand?)
New Agent (Businesses become more automated, adaptive, resilient, responsive)
 +1 : NBIC (?nano-bio-info-cogno convergence?)
New Material (Nanotechnology – first impact on materials, electronics, and life sciences)
New Sense (Bionics - neural & biochemical interfaces cure deafness, blindness, organ failure)
New Mediator (Information WorldBoard - planetary augmented reality system)
New Agents (Cognitive robots or Bots - natural language interface to all human knowledge)
 +5 : Utility Fog (?materials on demand?)
New Material (Utility Fog – billions of particles assemble on-demand to create macro-scale objects)
Nonzero : The Logic of Human Destiny by Robert Wright
38
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
The evolution of business towards a services economy
(jobs arise and decline; a rolling shift in needed jobs & skills)
U.S. Employment Percentages by Sector
100
90
80
70
60
50
40
30
20
10
0
1800
Services (Info)
Services (Other)
Industry (Goods)
Agriculture
1850
1900
1950
2000
2050
Estimations based on Porat, M. (1977) Info Economy: Definitions and Measurement
The Pursuit of Organizational Intelligence, by James G. March
Exploitation versus exploration; services adapt goods to demand
39
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© 2004 IBM Corporation
Accelerating Change 2004
The evolution of business towards “On Demand e-Business”
Technology and business innovations are coevolving.
Rapid business productivity improvements are driven by technology innovations.
Rapid technology improvements are driven by business investments.
Moore’s “law” is as much a law of business investment as of technological possibilities.
(see http://almaden.ibm.com/coevolution) – two systems ratchet each other up.
Characteristics of an on-demand e-business.
Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations
by Stephan H. Haeckel, Adrian J. Slywotzky
40
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© 2004 IBM Corporation
Accelerating Change 2004
On demand e-business is enabled by an on demand operating environment.
The on demand operating environment mirrors changing work practices
Autonomic
Virtualized
Integration
Open Standards
41
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
Evolving Complexity and Interconnections
Social
Technology
Edge Computing
eGovernment
Wireless Physician
Grid Computing
Telematics
IP WAN
P-M
Government
Metro
Operational Risk (FSS)
42
Rich Media
Wireless
ASP Hosted Platform
LAN
High Performance Computing
P-M-P
Storage Virtualization
eSourcing
Business
Data
Center
Multichannel
Wireless
Procurement Services
CPG/CRM
Managed
Storage
Services
Mgmt
M-M
Utility
Linux Clusters
Cluster
Unified
Communications
Division
Policy-based Automation
Video Area Networks
Mobile Notes
M-P-M
Autonomic Storage
Rack
eLiza
High Volume Linux
Interconnects
DB2 Everywhere
Department
Media Appliance
High end Intel
Server Appliance
Box
Pervasive/Mobile Computing
Autonomic Client
Server Blade
Devi ce Software
Workgroup
Board
Wireless Client
Broadband
Game
M-P
Knowledge Mgmt
Photonics
Advanced Personal Chip
Person
Identity Manager
Digital Video
eLearning
Wireless 3G
eBiz Mgmt
P-P
PLM
Distr and SAN-wide File System
SAN Mgmt
Life Sciences
Industry Groups
IP-based Network Storage
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
The New Environment and Human Activity: Where does our time go?
From the search for food to the search for information
Humans as Informavore (Miller, 1983)
Source: Pirolli (2002)
Information
Energy
Max
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[
Energy
Time
]
http://www.almaden.ibm.com/coevolution
[
]
Useful info
Max
Time
© 2004 IBM Corporation
Accelerating Change 2004
Cognitive Technologies: Where is the knowledge?
 Localized in a brain -- yours!
Remind: Capture history and augment memory
Remediate: Practice with simulation games
 Localized in a brain -- but someone else’s brain, soon to be yours too!
Receive: Training, for use in known context (exploitation)
Reconstruct: Education, for use in unknown context (exploration)
 In no one’s brain (yet) -- but someday localized in your brain and/or others.
Research: Answer question the first time
Reflect: Ask question the first time
 Distributed in the collective closure of brains, bodies, and technologies,
“no one’s brain”
44
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© 2004 IBM Corporation
Accelerating Change 2004
Cognitive capabilities: In pursuit of a metric




Knowledge in our minds is soft capability
Knowledge in our genes, body, brains is hard capability
Knowledge in our organizations is relationship capability
However, in human and social systems attitudes, incentives, and
games are an element of the cognitive capabilities of the system
 Given a goal: land and safely return humans on Mars, one can
estimate how many resources would be required to achieve this goal
given the cognitive capabilities of the system.
 How does one compare the complexity of achieving different goals?
 How does one compare sensing, communications, decision making,
and execution performance?
Natural-Born Cyborgs: Minds, Technologies, and the Future of Human
Intelligence
by Andy Clark
“…human cognitive evolution seems to involve the distinct way human brains
repeatedly create and exploit various species of cognitive technology.” (pg. 78)
45
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
Meta Trends: Exponential Growth

Moore's Law - Miniaturization - Continues
Processing, Storage, ...
Price/Performance 2X over 12-18 months

Metcalf's Law - Interconnection - Continues
Value of a network increases as the square of the number
connections

Gilder's Law - Quantization - Continues
Bandwidth increases 3X every 36 months

Negraponte's "Law - Digitization - Emerges
Superiority of "bits over atoms"
Profound impact felt in "Knowledge Economy" where
ideas are ultimate raw material
46
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
Key Megatrends Driving Venture Investment
Key Megashifts
Switching is shifting from circuits to packets.
Data, then voice; Backbone, then access
Transmission is shifting from electronic to photonic.
First long haul, then metro, then local access
Functions are moving from the enterprise to the Net.
IP universal protocol/ platform of choice is the Net
Offerings are moving from products to services.
"Utilitization" of processing, applications, storage, ... knowledge
Bioscience is moving from in vitro to in silico
First Genomics, then Proteomics, ... nanotechnologies
47
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
The science: nano-bio-cogno-socio-techno convergence:
It’s all about information – encoding, processing, replicating – in
different systems (ultimately all grounded in matter patterns)
Coevolution
System
Encoding
Processing
Replicating
Nano
Matter
(Nature)
Atoms &
Molecules
Universe to
Atoms
Galactic, Solar,
Planet Systems
Bio
Life
(Nature)
DNA
Cells to
Ecosystems
Evolution
Cogno
Thought
(Nature/Human)
Brains
Neural Nets
Evolution Culture
Socio
Culture
(Human)
People
Organizations
Evolution Culture
Techno
Technology
(Human)
Artifacts & Bits
Computers
DesignFactories
Rapidly increasing rates of advancement in each system area is creating cross pollination
Examples: FOXP2, Complex Adaptive Systems (CAS) – Variability, Interaction, Selection
48
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
Biocomplexity: Much prettier picture than my table!
Rita Colwell,
Former Director National Science Foundation (NSF)
49
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
IBM’s business is helping customers transform their
businesses. Services is now 50% of IBM, with rapid growth
from strategic outsourcing, help desk, business consulting.
•Services
(IGS)
•Sales
(S&D)
•Middleware/Software
(SWG)
•PartnerWorld
(Developer Relations)
•(DB2, WS, Rational, Tivoli, Lotus)
•Boxes/Hardware
(Servers, Storage, Personal)
•Finance (IGF)
•Chips/Technology
(IMD, TG)
•IBM Research
• IBM’s Industry Solutions
•IBM’s Platform
•Alternate vendors
•IBM’s Services
•Alternate providers
•IBM’s Customers
•IBM’s Partners
IBM 101 – The New (Post 1995) IBM Ecosystem
Revenue: $80+ Billion/Year
Employees: 320,000+, about 50% inside-US, 50% outside-US
IBM Global Services, approx. 170,000 people in 120 countries
50
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
November 6, 2004 | Contact Jim Spohrer (spohrer@us.ibm.com)
Director, Almaden Services Research
Open Office Hour: Wed 4-5pm PST, 408-927-1928
http://almaden.ibm.com/coevolution
http://www.almaden.ibm.com/asr
Accelerating Change 2004
ODIS 101: On-Demand Innovation Services (ODIS) sets the stage for the next
generation researcher – one that is closely tuned with real-world client issues to
drive and validate innovations, technological-organizational-business
perspectives. Requires new academic collaborations beyond technological.
1970’s-80’s
Research
Focus
Researchers
Centrally Determined
Corporate Issues
In the Lab
Centrally funded
80’s-90’s
Collaborative Agenda
Determined with Brands
Some Joint
Development with
Clients
Joint programs
90’s-00’s
Agenda Linked to
Client Issues
Create
business
advantage
for clients
Some
Researchers in
theResearch
Marketplace
in the
marketplace On Demand
Innovation
IBM
Offering
52
Hardware
http://www.almaden.ibm.com/coevolution
Software
Services
© 2004 IBM Corporation
Accelerating Change 2004
IBM Research Worldwide
53
http://www.almaden.ibm.com/coevolution
© 2004 IBM Corporation
Accelerating Change 2004
Thanks for your attention.
Suggestions and ideas are welcome.
E-mail spohrer@almaden.ibm.com or
Jim Spohrer/Almaden/IBM.
November 6, 2004 | Contact Jim Spohrer (spohrer@us.ibm.com)
Director, Almaden Services Research
Open Office Hour: Wed 4-5pm PST, 408-927-1928
http://almaden.ibm.com/coevolution
http://www.almaden.ibm.com/asr