Service Growth

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Urban Systems and Service Innovation:
Cities and Universities Partnering to Enhance Sustainability
“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
“Cities learning from cities learning from cities.” – Fundacion Metropoli
“Think global, act local.” – Geddes
“The future is born in universities.” – Kurilov
“The best way to predict the future is to build it.” – Kay
“The future is already here… It is just not evenly distributed.” – Gibbons
“Real-world problems do not respect discipline boundaries.” – Popper
“Today’s problems come from yesterday’s solutions.” – Senge
“History is a race between education and catastrophe.” – H.G. Wells
Dr. James (“Jim”) C. Spohrer
Director, IBM University Programs (IBM UP)
spohrer@us.ibm.com
IBM Almaden Research Center, San Jose, CA 95120 USA
For: Definitions Discussions
April 17, 2010
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IBM UP (University Programs)
© 2010 IBM Corporation
Outline
1. Quality of life: Everyday we depend on systems…
2. The world’s system of systems ($54 trillion value, $4 trillion waste)
3. Grand challenges: The race between education and catastrophe
4. A vital partnerships: Cities and universities (get these building blocks right)
5. IBM University Programs: Doing our part (2010 key directions, 5 R’s)
6. Trend: Growing importance of service systems (IT-enabled division-of-labor)
7. Future skill needs: T-shaped (deep & broad) service system experts
8. Smarter = Sustainable innovation (reduce waste, expand capabilities)
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IBM UP (University Programs)
© 2010 IBM Corporation
Quality of life: Everyday we depend on systems…
A. Systems that focus on flow of things that humans need (~15%)
1. Transportation & supply chain
2. Water & waste recycling/Climate & green tech
3. Food & products manufacturing
4. Energy & electricity grid
5. Information and Communication Technologies (ICT access)
B. Systems that focus on human activity and development (~70%)
6. Buildings & construction (smart spaces) (5%)
7. Retail & hospitality/Media & entertainment (tourism) (23%)
8. Banking & finance/Business & consulting (wealthy) (21%)
9. Healthcare & family life (healthy) (10%)
10. Education & work life/Professional jobs & entrepreneurship (wise) (9%)
C. Systems that focus on human governance - security and opportunity (~15%)
11. Cities & security for families and professionals (property tax)
12. States/regions & development opportunities/investments (sales tax)
13. Nations/NGOs & rights/rules/incentives/policies/laws (income tax)
(Quality of Service & Jobs) + Returns + Security + Sustainability
Measure -> Quality, Productivity, Compliance, “Smarter”
“Smarter” = Sustainable Innovation (continuously reduce waste, expand capabilities)
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
 Our planet is a complex system-of-systems
Our planet is a complex, dynamic, highly interconnected
$54 Trillion system-of-systems (OECD-based analysis)
This chart shows ‘systems‘ (not ‘industries‘)
Communication
Transportation
$ 3.96 Tn
$ 6.95 Tn
Education
$ 1.36 Tn
Water
$ 0.13 Tn
Electricity
Leisure / Recreation /
Clothing
$ 2.94 Tn
$ 7.80 Tn
Global system-of-systems
$54 Trillion
(100% of WW 2008 GDP)
Healthcare
$ 4.27 Tn
Infrastructure
Legend for system inputs
$ 12.54 Tn
Note:
1. Size of bubbles represents
systems’ economic values
2. Arrows represent the strength of
systems’ interaction
Source: IBV analysis based on OECD
4
Finance
$ 4.58 Tn
IBM University Programs (IBM UP)
Food
$ 4.89 Tn
Govt. & Safety
$ 5.21 Tn
1 Tn
Same Industry
Business Support
IT Systems
Energy Resources
Machinery
Materials
Trade
© 2010 IBM Corporation
 We now have the capabilities to manage a system-of-systems planet
Economists estimate, that all systems carry inefficiencies
of up to $15 Tn, of which $4 Tn could be eliminated
This chart shows ‘systems‘ (not ‘industries‘)
Analysis of inefficiencies in the
planet‘s system-of-systems
Improvement potential as
% of system inefficiency
40%
35%
Electricity
2,940
30%
Building & Transport
34%
Infrastructure Education
12,540
1,360
Financial
4,580
System-ofsystems
42%
Inefficiencies
Food & Water
4,890
25%
20%
Communication
3,960
Transportation (Goods
& Passenger)
6,950
Leisure / Recreation
/ Clothing
7,800
15%
15%
20%
25%
Improvement
potential
Government & Safety
5,210
$54 Trillion
100% of WW 2008
GDP
$15 Trillion
28% of WW 2008
GDP
$4 Trillion
7% of WW 2008 GDP
Note: Size of the bubble indicate absolute
value of the system in USD Billions
30%
35%
40%
System inefficiency as % of total
economic value
Source: IBM economists survey 2009; n= 480
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Global economic value of
Healthcare
4,270
IBM University Programs (IBM UP)
45%
How to read the chart:
For example, the Healthcare system‘s
value is $4,270B. It carries an estimated
inefficiency of 42%. From that level of 42%
inefficiency, economists estimate that
~34% can be eliminated (= 34% x 42%).
© 2010 IBM Corporation
How do we involve universities?
How do weave a “total solution” that includes universities?
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
IBM’s Smarter Planet Grand Challenge: Smarter Systems
A. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
Traffic, Rail
2. Water & Waste/Climate & Green tech
Water
3. Food & Products
Food, Products
4. Energy & Electricity
Energy, Oil
5. Information & Communication Technology
Intelligence, Telecom, Cloud Computing
B. Systems that focus on human activity & development
6. Buildings & Construction (smart spaces)
Buildings, Infrastructure
7. Retail & Hospitality/Media & Entertainment (tourism)
Retail
8. Banking & Finance/Business & Consulting
Banking, Stimulus
9. Healthcare & Family Life
Healthcare
10. Education & Work Life/Jobs & Entrepreneurship
Education, Work
C. Systems that focus on human governance
11. City & Security
Cites, Public Safety, Infrastructure
12. State/Region & Development
13. Nation & Rights
Government, Stimulus
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
NAE’s Engineering Grand Challenges: Smarter Systems
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 & Rights
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Nations’ Grand Challenge: Quality of Life (how to define?)
Smarter Systems = (Quality of Service & Jobs) + Returns + Security + Sustainability
A. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
2. Water & Waste/Climate & Green tech
Climate and geography
3. Food & Products
4. Energy & Electricity
5. Information & Communication Technology
Material well being
B. Systems that focus on human activity & development
6. Buildings & Construction (smart spaces)
Material well-being
7. Retail & Hospitality/Media & Entertainment (tourism)
Material well-being
8. Banking & Finance/Business & Consulting
Material well-being
9. Healthcare & Family Life
Health & Family Life
10. Education & Work Life/Jobs & Entrepreneurship
Job security
Gender equality
C. Systems that focus on human governance
11. City & Security
Community Life
Political stability and security
12. State/Region & Development
Climate and geography
13. Nation & Rights
Political freedom
Gender equality
Political stability and security
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Cities: System of Systems (Mini-Nations)
A. Flow of things
1. Transportation: Traffic congestion; accidents and injury
2. Water: Access to clean water; waste disposal costs
3. Food: Safety of food supply; toxins in toys, products, etc.
4. Energy: Energy shortage, pollution
5. Information: Equitable access to info and comm resources
B. Human activity & development
6. Buildings: Inefficient buildings, environmental stress (noise, etc.)
7. Retail: Access to recreational resources
8. Banking: Boom and bust business cycles, investment bubbles
9. Healthcare: Pandemic threats; cost of healthcare
10. Education: High school drop out rate; cost of education
C. Governing
11. Cities: Security and tax burden
12. States: Infrastructure maintenance and tax burden
13. Nations: Justice system overburdened and tax burden
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Universities: System of Systems (Mini-Cities)
A. Flow of things
1. Transportation: Traffic congestion; parking shortages.
2. Water: Access costs; reduce waste
3. Food: Safety; reduce waste.
4. Energy: Access costs; reduce waste
5. Information: Cost of keeping up best practices.
B. Human activity & development
6. Buildings: Housing shortages; Inefficient buildings
7. Retail: Access and boundaries. Marketing.
8. Banking: Endowment growth; Cost controls
9. Healthcare: Pandemic threat. Operations.
10. Education: Cost of keeping up best practices..
C. Governing
11. Cities: Town & gown relationship.
12. States: Development partnerships..
13. Nations: Compliance and alignment.
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IBM UP (University Programs)
© 2010 IBM Corporation
A Vital Partnership: Cities and universities
Citizens are demanding more urban services
Larson & Odonoi (MIT) Urban Operations Research.
Citizens are demanding more urban services, by type, quantity, and quality. Yet the ability of most
cities in the United States and elsewhere to pay for additional services has been severely
strained… For our purposes, a decision is an irrevocable allocation of resources. Thus, this
book will deal with the allocation or deployment of the resources of urban service systems,
including personnel, equipment, and various service-improving technologies. From this
viewpoint, urban operations research can be thought of as a decision-aiding technology, one to
assist urban managers in improving the deployment of their resources. Most deployments
occur spatially throughout the city, so much of our work will have a strong spatial component.
Higher education can respond
Urban Serving University Coalition (USU) A Vital Partnership: Great Cities, Great Universities
Higher education can respond to the challenges facing our cities and metropolitan regions,
becoming the R&D partners of cities that evaluate and deploy potential innovations. Never
before has this agenda had greater urgency for our nation. For example, demographic changes
within the United States have been dramatic, with nearly eight in ten Americans now living in
cities. According to the Brookings Institution, while the top 100 metropolitan areas make up
only 12% of the land mass, they produce fully 75% of the gross domestic product, generate
78% of competitive patents, and account for 68% of the nation’s jobs. Increasingly, the
prosperity of our cities and metro areas is inextricably linked to our national prosperity.
Demographic projection: By 2050 over 70% of the world’s population will live in cities
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IBM UP (University Programs)
© 2010 IBM Corporation
Universities Evolving Urban Innovation Centers
University sub-systems
Disciplines in Schools (circles)
Innovation Centers (squares)
D
transportation
water & waste
D
D
D
health
food &
supply chain
E.g., CMU Website (2009)
“Research Centers:
where it all happens –
to solve real-world
problems”
energy/grid
Disciplines in Schools
e-government
Award degrees
Single-discipline focus
Research discipline problems
Innovation Centers (ICs)
Industry/government sponsors
Multi-disciplinary teams
Research real-world systems
D
D
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“Act Local”: Connect to Home City
let’s work towards smarter cities
let’s start with smarter education
CITIES:
UNIVERSITIES:
THE LIVING LABS FOR UNIVERSITIES
THE INNOVATION CENTERS OF GREAT CITIES
IBM UP
Connect
Universities
To Their
Cities
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“Think Global”: Connect to Sister Cities
World as System of Systems
World (light blue - largest)
Nations (green - large)
Regions (dark blue - medium)
Cities (yellow - small)
Universities (red - smallest)
Developed Market
Nations
(> $20K GDP/Capita)
Emerging Market
Nations
(< $20K GDP/Capita)
Cities as System of Systems
-Transportation & Supply Chain
-Water & Waste Recycling
-Food & Products ((Nano)
-Energy & Electricity
-Information/ICT & Cloud (Info)
-Buildings & Construction
-Retail & Hospitality/Media & Entertainment
-Banking & Finance
-Healthcare & Family (Bio)
-Education & Professions (Cogno)
-Government (City, State, Nation)
Nations: Innovation Opportunities
- GDP/Capita (level and growth rate)
- Energy/Capita (fossil and renewable)
IBM UP: Tandem Awards: Increasing university linkages (knowledge exchange interactions)
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IBM University Programs (IBM UP): 2010 Focus “30 cities”
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
IBM University Programs (IBM UP): 2010 Focus “5 R’s”
1. Research
Awards that connect university and IBM researchers/professionals to work on grand challenges
https://www.ibm.com/developerworks/university/research/index.html
2. Readiness
Access to IBM tools, methods, and course materials to develop skills
https://www.ibm.com/developerworks/university/academicinitiative/
3. Recruiting
Jobs on global teams working to build a smarter planet - nation by nation, system by system
http://www.ibm.com/jobs
4. Revenue
Public-private partnerships that build great universities, great cities, and improve quality of life
http://www.ibm.com/services/us/gbs/bus/html/bcs_education.html
5. Responsibility
IBM employees share their expertise, time, and resources with universities in community service
http://www.ibm.com/ibm/ibmgives/
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
IBM University Programs (IBM UP): 2010 Focus “6 Priorities”
1. Smarter Cities (A Vital Partnership: Great Cities & Great Universities)
A. Holistic Modeling & Analytics, B. STEM Education Pipeline, C. Jobs & Entrepreneurship
Establish Urban Sustainability and Innovation Centers (start with http://cityforward.org)
2. Cloud Computing
IBM Cloud Academy, IBM Academic Cloud, Massive Analytics
3. Ecosystem Alignment
Internal and external coordination and collaborations (win-win relationships)
4. IBM on Campus
IBM Centers for Advanced Study, IBM Innovation Centers, IBM Research Collaboratories
5. Growth Markets
Enablement, Twin Cities, Sister Cities
6. Awards Programs
Shared University Research, Open Collaborative Research, Faculty Awards, PhD Fellowships
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Priority 1: Urban Sustainability & Innovation Centers at Universities
A. Holistic Modeling & Analytics (Urban Service Systems)
Modeling and simulating cities will push state-of-the-art capabilities for planning
interventions in complex system of systems
Provides an interdisciplinary integration point for many other university research
centers that study one specialized type of system
Real-world data and advanced analytic tools are increasingly available
B. STEM Education Pipeline (Science Tech Engineering Math)
City simulation and intervention planning tools can engage high school students and
build STEM skills
Role-playing games can prepare students for real-world projects
C. Entrepreneurship & Job Creation
City modeling and intervention planning tools can engage university students and
build entrepreneurial skills
Grand challenge competitions can lead to new enterprises
Note: Universities are mini-cities within cities (building blocks to get right).
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
A. Holistic Modeling & Analytics
Example: FIU’s Terrafly
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IBM UP (University Programs)
© 2010 IBM Corporation
B. K-12 STEM Education Pipeline

Challenge-based Project to Design Improved Systems
– K - Transportation & Supply Chain
Systems
–
1 - Water & Waste Recycling
–
2 - Food & Products (Nano)
–
3 - Energy & Electric Grid
–
4 – Information/ICT & Cloud (Info)
–
5 - Buildings & Construction
–
6 – Retail & Hospitality/Media &
–
7 – Banking & Finance/Business & Consulting
–
8 – Healthcare & Family Life (Bio)
–
9 - Education & Work Life/Jobs & Entrepreneurship (Cogno)
–
10 – City (Government)
–
11 – State/Region (Government)
–
12 – Nation (Government)
–
Higher Ed – T-shaped teamwork, deep & broad education
–
Professional Life – T-shaped teamwork, series of projects
that focus on
Flow of things
Systems
that focus on
Human
Activities and
Entertainment
(tourism)
Development
Systems
that focus on
Governing
“Imagine a better system, and use STEM language to explain why it is better”
STEM = Science, Technology, Engineering, and Mathematics
See NAE K-12 engineering report: http://www.nap.edu/catalog.php?record_id=12635
See Challenge-Based Learning: http://www.nmc.org/news/nmc/nmc-study-confirms-effectiveness-challenge-based-learning
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IBM UP (University Programs)
© 2010 IBM Corporation
C. Entrepreneurship & Job Creation
Research
General
to improve systems
fuels
Methods
& Techniques
Sales
Jobs
Architect
Model Systems
2.
Connect/capture Data
3.
Analyze, Improve
4.
Optimize, Automate
5.
Discipline Specialists
1.
Synapsense,
SensorTronics
Specific
2.
Infosphere Streams,
ILOG, COGNOS, SPSS
Technologies
3.
WS, Tivoli, Rational,
DB2, etc.
4.
BAO, Green Sigma
Consultant
Project
Manager
Systems Engineering/
Analytics/BAO/SSME
1.
Cross Industry
Competencies
•Transportation
Specialists
Specific
Systems
Operations
•Water and waste
•Energy and electricity
•Buildings
•Healthcare/Education
Industry Specific
Competencies
•Cities/Government
Run
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IBM University Programs (IBM UP)
Transform
Innovate
© 2010 IBM Corporation
IBM Jobs: Project teams focus on customer needs
IBM Employees
1.
2.
3.
4.
5.
6.
Project Work:
~10% Consultant
~10% Sales
~5% Architect
~5% Project Manager
~45% Specialists
~25% Enterprise Operations
~10%
1. Consultant
(trusted advisor to customer)
- a value proposition to address
problems or opportunities and
enhance value co-creation
relationships
~5%
3. Architect
~10%
2. Sales
- a signed contract that
defines work, outcomes, solution,
rewards and risks
for all parties
~25%
6. Enterprise Operations
Administrative Services, Other,
Marketing & Communications
Finance, Supply Chain, Manufacturing,
Human Resources, Legal,
General Executive Management
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90% B2B – Business to Business
10% B2G – Business to Government
(i.e., “Smarter Planet” projects)
(systems engineer, IT & enterprise architect)
-An elegant solution design that satisfies
functional and non-functional
constraints across the
system life-cycle
(often with co-PM from customer side)
a detailed project plan that
balances time, costs, skills availability,
and other resources, as well as
adaptive realization of plan
~5%
4. Project Manager
~45%
5. Specialists
(systems engineer, Research, engineer,
Industry specialist, application, technician,
data, analyst, professional, agent)
-a compelling working system
(leading-edge prototype systems
from Research)
IBM University Programs (IBM UP)
© 2010 IBM Corporation
The Big Trend: “The future is service1”
Human Labor
100%
Physical:
mostly interact
with things
Agriculture
(physical)
Hunter
Gatherer
(physical)
-10K
-1000K
Service1 growth as
intangible outputs
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Global University Programs
-100
Time (years)
Service
(social)
Manufacturing
(physical)
-1
Social:
mostly interact
with others
+100
Service2 growth as
IT-enabled
division of labor
© 2009 IBM Corporation
The Big Trend: “The future is service2”
Service Growth (Value-Cocreation)
Service2 growth as
IT-enabled
division of labor
increase mutually beneficial interactions
decrease unproductive interactions
T-shaped people to lower coordination costs
Coordination (Information Technology)
space, time, scale integration
Specialization (Outsourcing)
space, time, scale distribution
Population (People & Organizations)
entities interacting
 More population (people & organizations) creates opportunity for specialization
–
Specialization (division of labor – Adam Smith) can improve productive capacity
–
–
Local interactions become distributed across space, time, and scale (transaction costs – Coase)
Local optimization may not lead to global performance improvements
–
–
IT integrates across space, time, and scale improving global and local performance
Increase the ratio of productive interactions to unproductive interactions with others
 More specialization (outsourcing) creates need for coordination mechanisms
 More coordination (IT can lower costs) creates service growth (value-cocreation)
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Global University Programs
© 2009 IBM Corporation
T-Shaped Professionals: Ready for T-eamwork!
Many team-oriented service projects completed
(resume: outcomes, accomplishments & awards)
Many disciplines
Many systems
(understanding & communications)
(understanding & communications)
Deep in one system
(analytic thinking & problem solving)
Deep in one discipline
(analytic thinking & problem solving)
SSMED = Service Science, Management, Engineering & Design
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Service Science: Transdisciplinary System-of-Systems Framework
Systems that focus on flows of things
transportation &
ICT &
food &
energy
supply chain water &
cloud
products & electricity
waste
Customer
Systems that support people’s activities
Systems that govern
retail &
healthcare
education city
state nation
building & hospitality banking & family
secure scale laws
&work
construction
& finance
behavioral sciences
stakeholders
e.g., marketing
Provider
management sciences
Stakeholders (As Is)
e.g., operations
Authority
Competitors
People
political sciences
e.g., public policy
learning sciences
e.g., game theory
and strategy
cognitive sciences
e.g., psychology
resources
Technology
system sciences
Resources (As Is)
e.g., industrial eng.
information sciences
Information
e.g., computer sci
organization sciences
Organizations
change
History
(Data Analytics)
Future
(Roadmap)
Run
value
Transform
(Copy)
Innovate
(Invent)
e.g., knowledge mgmt
social sciences
e.g., econ & law
decision sciences
e.g., statistics
Change (Has Been & Might Become)
run professions
e.g., knowledge worker
transform professions
e.g., consultant
Value (To Be – Investment Opportunities)
innovate professions
e.g., entrepreneur
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Smarter = Sustainable Innovation (reduce waste, expand capabilities)
Service Systems: Stakeholders & Resources
Computational System
Building Smarter Technologies
Requires investment roadmap
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IBM UP (University Programs)
1. People
2. Technology
3. Shared Information
4. Organizations
connected by win-win value propositions
Building Smarter Universities & Cities
Requires investment roadmap
© 2010 IBM Corporation
Thank-you! And…
let’s focus smarter education on…
…sustainable innovations for smarter cities
“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
“Cities learning from cities learning from cities.” – Fundacion Metropoli
“Think global, act local.” – Geddes
“The future is born in universities.” – Kurilov
“The best way to predict the future is to build it.” – Kay
“The future is already here. It is just not evenly distributed.” – Gibbons
“Real-world problems do not respect discipline boundaries.” – Popper
“Today’s problems come from yesterday’s solutions.” – Senge
“History is a race between education and catastrophe.” – H.G. Wells
…helping to build a smarter planet
instrumented+interconnected+intelligent
(http://www.ibm.com/think)
29
IBM University Programs (IBM UP)
© 2010 IBM Corporation
IBM University Programs (IBM)
Gibbons said “The future is already here. It's just not very evenly distributed.". What if walking onto a university campus was like walking into
the future. In a way it is, because the students at universities will someday fill roles in business and society – they are the future doers in all
systems. Also, some of the important ideas from university research centers will someday become commonplace. More and more
universities, especially urban serving research universities, are like living labs for the cities that host them. Universities are in fact small
cities within larger cities. Many universities today have more students than the populations of some cities in past centuries, and the students
have much better technologies for sharing and building knowledge.
There is more and more demand for Science Technology Engineering and Math (STEM) driven service innovations that can continuously
improve the reliability of complex systems that serve customers in modern societies (UK Royal Society "Hidden Wealth: Science in Service
Innovations" report, July 2009). Service innovations that improve reliability should also improve (a) the quality of service as judged by
customers, (b) the productivity of provisioning service as judged by providers, and (c) the compliance as judged by regulatory or governing
authorities as well as society as a whole. Furthermore, service innovations are what keep business systems competitive in a dynamic world
characterized by globalization, driven in part by business model and technological change. Therefore, service innovations need to be
sustainable innovations, both from an environmental perspective as well as an investment roadmap perspective that leads to continuous
opportunities for individuals, businesses, and institutions.
Service science is a global initiative to improve service system innovation tools and methods. Service science may someday lead to a
Moore’s Law for service system improvement. This will require a Computer-Aided Design (CAD) tool that can be used by T-shaped
professionals to plan and implement more service innovation projects. Improved service systems that continuously improve locally and
globally can help achieve the vision of a Smarter Planet.
Dr. James (“Jim”) C. Spohrer
Director of IBM University Programs (IBM UP) since 2009, Jim founded IBM's first Service Research group in 2003 at the Almaden Research
Center with a focus on STEM (Science Technology Engineering and Math) for Service Sector innovations. He led this group to attain ten
times return on investment with four IBM outstanding and eleven accomplishment awards over seven years. Working with service research
pioneers from many academic disciplines, Jim advocates for Service Science, Management, Engineering, and Design (SSMED) as an
integrative extended-STEM framework for global competency development, economic growth, and advancement of science. In 2000, Jim
became the founding CTO of IBM’s first Venture Capital Relations group in Silicon Valley. In the mid 1990’s, he lead Apple Computer’s
Learning Technologies group, where he was awarded DEST (Distinguished Engineer Scientist and Technologist) Jim received a Ph.D. in
Computer Science/Artificial Intelligence from Yale University and a B.S. in Physics from MIT.
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Evolving Service2: Specializations, Technologies, and Rules
Show Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html
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IBM University Programs (IBM UP)
© 2010 IBM Corporation
Most Wanted: A CAD for service systems
(CAD = Computer Aided Design Tool)
CBM: Component Business Model
WBM and RUP: Work Practices & Processes
SOA: Technical Service-Oriented Architecture
IEEE Computer, Jan 2007
Key Performance Indicators (KPIs)
IBM IBV: Component Business Models
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How many entities to study?
~10B service systems - modular value creation systems
•
Nations (~100)
– Regions (~1000)
• Cities (~10,000)
Nation
– Educational Institutions
(~100,000)
– Healthcare Institutions
(~100,000)
– Other Enterprises
(~10,000,000)
» Largest 2000
» >50% GDP WW
– Families (~1B)
– Persons (~10B)
Region
(e.g., State)
City
Educational
Institution
Healthcare
Institution
Family
(customers)
Other
Enterprises
(job roles)
Person
(providers)
•
Balance/Improve
– Quality of Life
• GDP/Capita
– Quality of Service
» Customer
Experience
– Quality of Jobs
– Sustainability
• GDP/Energy-Unit
– % Fossil
– % Renewable
33
How entities (service systems) learn and change over time
History and future of Run-Transform-Innovate investment choices
•
Diverse Types
– Persons (Individuals)
• Families
– Regional Entities
•
•
•
•
•
Universities
Hospitals
Cities
States/Provinces
Nations
– Other Enterprises
• Businesses
• Non-profits
•
Invest in each
type of change
Learning & Change
exploit explore
– Run = use existing
knowledge or standard
practices (use)
– Transform = adopt a new
best practice (copy)
– Innovate = create a new
best practice (invent)
March, J.G. (1991) Exploration and exploitation in organizational learning. Organizational Science. 2(1).71-87.
Innovate
34
How entities (service systems) interact
Incentives & Rules
Ecology
(Populations & Diversity)
Entities
(Service Systems)
Identity
(Aspirations/Lifecycle)
Interactions
(Service Networks)
Value Proposition
Governance Mechanism
Based Interactions (Incentives)
Based Interactions (Rules)
Access Rights
(Relationships)
Resources
(Roles in Processes)
Outcomes
(Value Changes)
Reputation
(Opportunities/Variety)
Measures
(Rankings of Entities)
Stakeholders
(Perspectives)
lose-win
win-win
lose-lose
win-lose
Resources: People, Technology, Information, Organizations
Stakeholders: Customers, Providers, Authorities, Competitors
Measures: Quality, Productivity, Compliance, Sustainable Innovation
Access Rights: Own, Lease, Shared, Privileged
35
Reports: 3 Nations
 UK Royal Society
 Germany MARS
 US ASU CSL
36
IBM University Programs (IBM UP)
© 2010 IBM Corporation
Teaching…
•
Fitzsimmons & Fitzsimmons
–
–
•
Undergraduates
Schools of Business
Busy execs (4 hour read)
Ricketts
–
–
•
By Fitzsimmons and
Fitzsimmons, UTexas
Teboul
–
–
–
•
Graduate Students
Schools of Engineering
Service Management:
Operations, Strategy,
and Information
Technology
Practitioners
Manufacturers In Transition
And 200 other books…
–
Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs,
Aquilano; Davis, Heineke; Heskett, Sasser,
Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter;
Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels,
Warf; Checkland, Holwell; Cooper,Edgett; Hopp,
Spearman; Womack, Jones; Johnston; Heizer, Render;
Milgrom, Roberts; Norman; Pine, Gilmore; Sterman;
Weinberg; Woods, Degramo; Wooldridge; Wright; etc.
For details: http://www.cob.sjsu.edu/ssme/refmenu.asp
Service Is Front Stage:
Positioning services for
value advantage
By James Teboul, INSEAD
Reaching the Goal:
How Managers Improve
a Services Business
Using Goldratt’s
Theory of Constraints
By John Ricketts, IBM
37
Teaching: IBM SSME Website: Creating T-shaped people
http://www.ibm.com/developerworks/spaces/ssme
38
Changing Nature of Jobs: Deep & Broad
Increasing usage of job descriptive terms
15
10
Expert Thinking
(deep)
5
Complex Communication
(broad)
0
Routine Manual
Non-routine Manual
-5
Routine Cognitive
-10
1969 1974 1979 1984 1989 1994 1999
Based on U.S. Department of Labor’ Dictionary of Occupational Titles (DOT)
Levy, F, & Murnane, R. J. (2004). The New Division of Labor:
How Computers Are Creating the Next Job Market. Princeton University Press.
39
A Service System Innovation Framework
Innovate (inside and outside) systems that create value
“The Ten Types of Innovation” by Larry Keeley, Doblin Inc.
40
Many definitions of service
•
Economics
–
–
–
•
Service Science
–
•
Service7 = a system (with inputs, outputs, and capacity limits) which is interconnected with other systems
that may seek to access its capabilities to create benefits, and in which local optimization of the system
interactions may not lead to global performance improvements
Design and Psychology
–
•
Service6 = a modular capability that can be computationally accessed and composed with others
Systems Engineering
–
•
Service5 = a production process that requires inputs from a customer entity
Computer Science
–
•
Service2 = value-cocreation phenomena, specifically a mutually beneficial outcome proposed,
agreed to, and realized by two or more service system entities interacting. Service system entities can
be people, businesses, nations, and any other economic entities with legal rights, such as the ability to own
property, enter into binding contracts, etc. Quantifiable measures associated with service system entity
interactions over the life-time of the entity, include quality, productivity, compliance, and sustainable
innovation measures. Service system entities configure four types of resources, accessible by four types of
access rights, and reason about four types of stakeholders when designing value-cocreation interactions,
and evaluating them via their processes of valuing.
Operations
–
•
Service1 = economic activities that are not agriculture or manufacturing
Service3 = a transformation that one economic entity performs with the permission of a second entity, that
transforms the second entity or a possession of the second entity
Service4 = an exchange between economic entities that does not transfer ownership of a physical thing.
Service8 = an experience of a customer entity that results from that entity interacting with a provider entities
offering
Marketing
–
–
Service9 = the application of competence for the benefit of another entity
Service10 = a customer-provider interaction that creates mutual benefits
41
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