Holistic Service Engineering for a Smarter Planet

1. Holistic Service Engineering for a Smarter Planet Dr. James (“Jim”) C. Spohrer, spohrer@us.ibm.com Innovation Champion and Director IBM UPward (University Programs worldwide - accelerating regional development) UTEP Engineering in the Conceptual Age Thursday September 15, 2011 Working Together to Build a Smarter Planet

2. “Let’s Build a Smarter Planet" Outline • Introduction: History & Future • History of Engineering • IBM: History & Future • Predicting the Future • Holistic Service Engineering • Evolution:Smarter Planet • What are Smarter Service Systems? • How to measure Quality-of-Life? • How to visualize Service Science? • What’s the Skills Goal? Hint: T-Shaped People • Where are the Opportunities? • Where is the “Real Science” in SSME+D?

3. Antiquity Weapons & Defense Military Engineering 1852 Buildings, Roads & Bridges Civil Engineering (ASCE) 1880 Steam Engines & Machinery Mechanical Engineering (ASME) 1884 Electric Grid & Appliances Electrical Engineering (AIEE/IEEE) 1907 Better Farms & Crops Agriculture & Biological Engineering (ASAE/ASABE) 1908 Fuels, Fertilizers,etc. Chemical Engineering (AICE) 1948 Better Factories & Automation Industrial Engineering (ASIE/IIE) 1948 Computers Computing Machinery (ACM) 1954 Power Plants Nuclear Engineering (ANS) 1955 Sustainable Construction Environmental Engineering (AAEE) 1963 Jets and Rockets Aerospace Engineering (AIAA) 1968 Medical Instruments Biomedical Engineering (BMES) 1985 Better Plants & Animals Genetic Technologists (AGT) 1992 Financial Instruments Financial Engineering (IAFE) 1993 Applications & Web Sites Software Engineering (JCESEP) 2007 Holistic Service Systems Service Research & Innovation Initiative (theSRII.org) Service Science, Management, and Engineering + Design (SSME+D) Service Enterprise Engineering (SEE) Service Systems Engineering (SSE) A new engineering discipline about every decade…

4. IBM Centennial: 100 Years of Innovation

5. “Let’s Build a Smarter Planet" IBM has 426,000 employees worldwide • 2010 Financials • Revenue - $ 99.9B • Net Income - $ 14.8B • EPS - $ 11.52 • Net Cash - $11.7B 21% of IBM’s revenue in growth market countries; growing at 13% in late 2010 More than 40% of IBM’s workforce conducts business away from an office IBM operates in 170 countries around the globe Number 1 in patent generation for 18 consecutive years ; 5,896 US patents awarded in 2010 100 Years of Business & Innovation The Smartest Machine On Earth 5 Nobel Laureates 9 time winner of the President’s National Medal of Technology & Innovation - latest award for Blue Gene Supercomputer

6. What’s the best way to predict the future? • The best way to predict the future is…. • To create it. (Moliere) • To invent it. (Kay) • To engineer it. (I am sure many have said this) • To inspire each generation (of students) to build it better (Spohrer) • holistically engineer, finance, deploy, and responsibly recycle it • Holistically concerns both technology and people • Addresses “whole service” to improve quality-of-life measures • Across multiple generations of technology and people...

7. Crash The Industrial Revolution Irruption Frenzy Synergy Maturity Installation Deployment Panic 1797 1 Age of Steam and Railways • Formation of Mfg. industry • Repeal of Corn Laws opening trade 1771 1829 Age of Steel, Electricity and Heavy Engineering Panic 1847 1829 2 • Standards on gauge, time • Catalog sales companies • Economies of scale 1873 Depression 1893 Age of Oil, Automobiles and Mass Production • Urban development • Support for interventionism 3 1875 1920 Age of Information and Telecommunications • Build-out of Interstate highways • IMF, World Bank, BIS 4 1908 1974 Crash 1929 Credit Crisis 2008 5 Coming period of Institutional Adjustment and Production Capital 1971 Five waves of infrastructure transformation Source: Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages; (Edward Elar Publishers, 2003).

8. ~Up-Skilling Adjustment Period: A Decade-Level Phenomenon Source: US Bureau of Economic Analysis; McKinsey Global Institute Analysis

9. An example human-side issue: Higher value skills & jobs(What are the benefits of more education? Of higher skills?) …But it can be costly, American student loan debt is over $900M

10. World’s Large Labor Forces A = Agriculture, G = Goods, S = Service US shift to service jobs 2010 2010 (A) Agriculture: Value from harvesting nature Nation Labor % WW A % G % S % 40yr Service Growth China 25.7 49 22 29 142% India 14.4 60 17 23 35% (G) Goods: Value from making products U.S. 5.1 1 23 76 23% Indonesia 3.5 45 16 39 34% (S) Service: Value from IT augmented workers in smarter systems that create benefits for customers and sustainably improve quality of life. Brazil 3.0 20 14 66 61% Russia 2.4 10 21 69 64% 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 Germany Growth of Service in National Economies Daryl Pereira/Sunnyvale/IBM@IBMUS, Parallels the growth of cities, universities, and the digital knowledge economy High Talent Individuals High Tech Infrastructure

11. 2010 Pretax Income Mix Revenue Growth by Segment SYSTEMS(AND FINANCING) SOFTWARE Services 17% 44% Software 39% Systems SERVICES IBM Annual Reports Growth of Service Revenue at IBM What do IBM Service Professionals Do? Run IT & enterprise systems for customers, help Transform customer processes to best practices, and Innovate with customers.

12. 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) 1. Emerging demand 5. Call for actions 2. Define the domain 3. Vision and gaps 4. Bridge the gaps Service Innovation Growth in service GDP and jobs Service quality & productivity Environmental friendly & sustainable Urbanisation & aging population Globalisation & technology drivers Opportunities for businesses, governments and individuals Service Systems Customer-provider interactions that enable value cocreation Dynamic configurations of resources: people, technologies, organisations and information Increasing scale, complexity and connectedness of service systems B2B, B2C, C2C, B2G, G2C, G2G service networks Stakeholder Priorities Education Research Business Government The white paper offers a starting point to - Service Science To discover the underlying principles of complex service systems Systematically create, scale and improve systems Foundations laid by existing disciplines Progress in academic studies and practical tools Gaps in knowledge and skills Develop programmes & qualifications Skills & Mindset Encourage an interdisciplinary approach Knowledge & Tools Develop and improve service innovation roadmaps, leading to a doubling of investment in service education and research by 2015 Employment & Collaboration Policies & Investment Glossary of definitions, history and outlook of service research, global trends, and ongoing debate

13. Pervasive Force: Leveraging Technology to Advance Service Strategy Priorities Development Priorities Execution Priorities Stimulating Service Innovation Fostering Service Infusion and Growth Effectively Branding and Selling Services Enhancing Service Design Improving Well-Being through Transformative Service Enhancing the Service Experience through Cocreation Creating and Maintaining a Service Culture Optimizing Service Networks and Value Chains Measuring and Optimizing the Value of Service Priorities: Research Framework for the Science of Service Source: Global Survey of Service Research Leaders (Ostrom et al 2010)

14. IBM Centennial: Icon of Progress

15. “service science is the transdisciplinary study of service systems & value-cocreation” The ABC’s: The provider (A) and a customer (B) transform a target (C) What is service science? A service system? The ABC’s? Design/ Cognitive Science Systems Engineering “a service system is a human-made system to improve provider-customer interactions and value-cocreation outcomes, by dynamically configuring resource access via value propositions, most often studied by many disciplines, one piece at a time.” Marketing Computer Science/ Artificial Intelligence Operations Economics & Law

16. COMMUNICATIONS PRODUCTS WORKFORCE TRANSPORTATION SUPPLY CHAIN BUILDINGS Evolution: Smarter Planet Infrastructure (3 I’s) INSTRUMENTED We now have the ability to measure, sense and see the exact condition of practically everything. INTERCONNECTED People, systems and objects can communicate and interact with each other in entirely new ways. INTELLIGENT We can respond to changes quickly and accurately, and get better results by predicting and optimizing for future events. IT NETWORKS

17. Our planet is a complex, dynamic, highly interconnected $54 Trillion system-of-systems (OECD-based analysis)  Our planet is a complex system-of-systems Transportation $ 6.95 Tn Communication $ 3.96 Tn This chart shows ‘systems‘ (not ‘industries‘) Education $ 1.36 Tn Water $ 0.13 Tn Leisure / Recreation / Clothing $ 7.80 Tn Electricity $ 2.94 Tn Global system-of-systems $54 Trillion (100% of WW 2008 GDP) Healthcare $ 4.27 Tn Infrastructure $ 12.54 Tn Legend for system inputs Same IndustryBusiness SupportIT SystemsEnergy ResourcesMachineryMaterials Trade Note: 1. Size of bubbles represents systems’ economic values 2. Arrows represent the strength of systems’ interaction 1 Tn Govt. & Safety$ 5.21 Tn Finance $ 4.58 Tn Food $ 4.89 Tn Source: IBV analysis based on OECD

18. This chart shows ‘systems‘ (not ‘industries‘) Analysis of inefficiencies in the planet‘s system-of-systems Healthcare 4,270 Building & Transport Infrastructure12,540 34% Education 1,360 Financial4,580 42% Electricity2,940 Improvement potential as % of system inefficiency Food & Water4,890 Communication3,960 Government & Safety 5,210 Transportation (Goods & Passenger)6,950 Leisure / Recreation / Clothing7,800 Note: Size of the bubble indicate absolute value of the system in USD Billions System inefficiency as % of total economic value  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 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%). Source: IBM economists survey 2009; n= 480

19. Quality-of-Life: How to measure? 20/10/10 * = US Labor % in 2009. A. Systems that focus on flow of things that humans need (~15%*) 1. Transportation & supply chain 2. Water & waste recycling/Climate & Environment 3. Food & products manufacturing 4. Energy & electricity grid/Clean Tech 5. Information and Communication Technologies (ICT access) B. Systems that focus on human activity and development (~70%*) 6. Buildings & construction (smart spaces) (5%*) 7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*) 8. Banking & finance/Business & consulting (wealthy) (21%*) 9. Healthcare & family life (healthy) (10%*) 10. Education & work life/Professions & entrepreneurship (wise) (9%*) C. Systems that focus on human governance - security and opportunity (~15%*) 11. Cities & security for families and professionals (property tax) 12. States/regions & commercial development opportunities/investments (sales tax) 13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) 2/7/4 2/1/1 7/6/1 1/1/0 5/17/27 1/0/2 24/24/1 2/20/24 7/10/3 5/2/2 3/3/1 0/0/0 0/19/0 1/2/2 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)”

20. Urban-Age.Net Currently, the world’s top 30 cities generate 80% of the world’s wealth. The Urban Age For the first time in history more than 50% the earth’s population live in cities - by 2050 it will be 75% The Endless City

21. In addition to providing students and faculty with IBM products, we also provide interactive tools to help improve our cities by putting data into the hands of people : • Understand the connections between systems • Share ideas among citizens • Spark conversations http://cityforward.org/wps/wcm/connect/CityForward_en_US/City+Forward/Home

22. Serious Games to teach problem solving for real world issues in key industries, helping companies to learn how to work smarter. Energy, Water, Banking, Retail.... http://www-01.ibm.com/software/solutions/soa/innov8/cityone/index.html

23. Our 21st Century World:Nested, Networked Holistic Service Systemshttp://www.service-science.info/archives/1056 Holistic Service Systems provide access to “Whole Service” to people inside, including Transportation, Water, Food, Energy, Communications, Buildings, Retail, Finance, Health, Education, Governance, etc. Examples: Nations, States, Cities, Universities, Hotels, Hospitals, Homes Definition: An holistic service system is a service system that can provide “whole service” to its primary population of people, independent of all external service systems, for an extended period of time, balancing independence with interdependence (outsourcing limits, re-cycle to sustain, etc.) University-Based Entrepreneurial Ecosystems (U-BEE’s): Universities are usually in the “top five” job creators of regions, when they have associated incubators & science-technology parks, super-computing data centers, hospitals, cultural & conference hotels, K-12 schools, etc. Nation State/Province City/Region Hospital Medical Research Cultural & Conference Hotels University College K-12 Worker (professional) Family (household) For-profits U-BEE Job Creators Non-profits SaaS PaaS IaaS ~25-50% of start-ups are new IT-enabled service offerings http://www.thesrii.org

24. Questions leaders of every nation, state, city, etc. ask • How to create more and better jobs (meaningful activities) for citizens? • higher skill & higher pay • higher participation rate, opportunities for ALL people • How to shift work towards high-skill, high-value activities? • away from low-skill, low-value routine physical, mental, interactional activities • toward high-value innovation (inventing best-practices, often from new ventures) • toward high-value transformation (implementing best-practices) • toward operations, maintenance, and incident-planning for modern infrastructure • How to invest in progress? • continuously improve infrastructure, talent, and ability to invest wisely • “true value of automation cannot be assessed until we know where people land” • Upward spiral or downward spiral? (e.g., “Robot Nation”) • How to improve quality-of-life? • sustainably, with less environmental impact, more recycling and less imports • equal access to opportunity & justice, generation after generation, for the long-run

25. k fuels collaborative innovation http://www.ibm.com/isv/startup Learn more about our Global Entrepreneur initiative: • Opens our doors and resources to entrepreneurs looking to bring the next big idea to market • Brings together investors, mentors and entrepreneurs – 25 thought leaders in each city • Focused on startups with 2-5 employees • Supports cities building smart city solutions Learn more about our results to date: • 513 Global Entrepreneur participants • 177 referrals to IBM Innovation Centers • 119 builds or ports to IBM technologies • 8 SmartCamp events in 2010, 9 more in 2011 25

26. Streetline gets $15M for smart parking VatorNews CareCloud Raises $5 Million in Second Angel Investor Round HealthPlanNews Parking-Technology Startup Streetline Backed by Bill Ford’s Firm Bloomberg Sproxil wins $10,000 People’s Choice Award at Accelerate Michigan Xconomy Acumen Fund Invests in Sproxil, Inc. to Combat Counterfeit Medicine Using Mobile Technology PRWeb Panoramic Power Announces $4.5 Million Funding Globes Israel SmartCamp winners attract venture capital funding 26

27. IBM SmartCamps generate global media interest SmartCamp Bangalore: IBM’s Adoption Plan Forbes India How IBM is Helping Entrepreneurs Build a Smarter Planet GlobalKnowledgeEconomy blog With SmartCamp, IBM supports five French start-ups for Smarter Planet Le Monde Informatique IBM SmartCamp: A Green Future in Sensors GreenTech IBM’s Innovative Approach to Venture CapitalThe Street Big Blue’s bear hug for Silicon Valley startups VentureBeat IBM’s SmartCamp Rewards Entrepreneurs for Good Intentions and Presentations Building a Smarter Planet blog IBM Announces Silicon Valley’s Smartest Green SMB StartupsInformationWeek IBM’s “Global Entrepreneur of the Year” Streetline: A silver bullet for urban traffic problems CNN Money 27

28. 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 yesterday's 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 NYU

29. University as Complex Enterprise (City Within City) • Universities can be the innovation centers for Smarter Cities (U-BEE)University-Based Entrepreneurial Ecosystems • Cities can be living labs for University research • Universitiesproduce the skilled workforce for cities. • Universities are among the largest employers (top 10) in a city. • Universities faculty, deans, provosts, presidents are often well connected & influential in city governments. • IBM and Tulane University Usher in a New Era for Smarter Buildings in New Orleans As the largest private employer in the City of New Orleans, Tulane University has made significant advances in rebuilding in more environmentally sustainable ways both the community at large and its campus The IBM project is helping to transform the home of Tulane's School of Architecture, the century-old Richardson Memorial Hall, into a "smarter buildingliving laboratory," using IBM Intelligent Building Management while maintaining respect for its historic status http://www-03.ibm.com/press/us/en/pressrelease/34694.wss

30. What are the benefits of top-ranked universities?% WW GDP and % WW Top-500-Universities Strong Correlation (2009 Data): National GDP and University Rankings http://www.upload-it.fr/files/1513639149/graph.html

31. 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.”

32. CITIES/METRO REGIONS: Universities Key to Long-Term Economic Development UNIVERSITIES: Research Centers & Real-World Systems U-BEEs: University-Based Entrepreneurial EcosystemsUniversities as “Living Labs” for Host Cities

33. Engineering School Business School D transportation water & waste D D I-School Design D health food & supply chain energy/grid e-government Science & Mathematics Social Sciences, Humanities D Professional Studies D University Trend: Shift to e-Learning and IC U-BEEs • University sub-systems • Disciplines in Schools (circles) • Innovation Centers (squares) • E.g., CMU Website (2009) • “Research Centers:where it all happens – to solve real-world problems” • Disciplines in Schools • Award degrees • Single-discipline focus • Research discipline problems • More e-Learning • Innovation Centers (ICs) • Industry/government sponsors • Multi-disciplinary teams • Research real-world systems • U-BEEs: • University-Based Entrepreneurial Ecosystems

34. Developed Market Nations (> $20K GDP/Capita) Emerging Market Nations (< $20K GDP/Capita) Universities connect innovation flows between Regions (“High Speed Bus”) • 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 • 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 WW: Tandem Awards: Increasing university linkages (knowledge exchange interactions)

35. Governance Governance Flows Human Development Stakeholders Resources Change Value Systems-Disciplines Matrix: Visualizing the Scope of Service Science • Systems • Flows • E.g., Transportation • Human Development • E.g., Health • Governance • E.g., City-level-security • Disciplines • Stakeholder-focus • E.g., Customer = marketing • Resource-focus • E.g., Technology = engineering • Change-focus • E.g., Future = design • Value-focus • E.g., Innovation = entrepreneurship

36. Systems that govern Systems that focus on flows of things Systems that support people’s activities transportation & supply chain ICT & cloud retail & hospitality healthcare & family city secure food & products education &work state scale nation laws energy & electricity water & waste building & construction banking & finance behavioral sciences People Technology Information Organizations Customer Provider Authority Competitors resources stakeholders e.g., marketing management sciences Starting Point 1: Observe the Stakeholders (As-Is) e.g., operations political sciences e.g., public policy learning sciences e.g., game theory and strategy cognitive sciences e.g., psychology system sciences Starting Point 2: Observe their Resource Access (As-Is) e.g., industrial eng. information sciences e.g., computer sci organization sciences e.g., knowledge mgmt social sciences History (Data Analytics) Future (Roadmap) change Change Potential: Think It! (Has-Been & Might-Become & To-Be) e.g., econ & law decision sciences e.g., stats & design run professions Run Transform (Copy) Innovate (Invent) e.g., knowledge worker value Value Realization: Do It Together! (New As-Is) transform professions e.g., consultant innovate professions e.g., entrepreneur systems Systems-Discipline Matrix: More Detail disciplines

37. Many multi-cultural-team service projects completed (resume: outcomes, accomplishments & awards) Many disciplines (understanding & communications) Many systems (understanding & communications) Deep in one discipline (analyticthinking & problem solving) Deep in one system (analytic thinking & problem solving) BREADTH DEPTH What are T-shaped professionals? Ready for Life-Long-Learning Ready for T-eamwork Ready to Help Build a Smarter Planet SSME+D = Service Science, Management, Engineering + Design

38. Expert Thinking Complex Communication Routine Manual Non-routine Manual Routine Cognitive How are advanced technologies changing the mix of jobs? Levy, F, & Murnane, R. J. (2004). The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton University Press.

39. Interactions are Key As more 21st century companies come to specialize in core activities and outsource the rest, they have greater need for workers who can interact with other companies, their customers, and their suppliers. Raising the productivity of employees whose jobs can’t be automated is the next great performance challenge – and the stakes are high. Companies that get that right will build complex talent-based competitive advantages that competitors won’t be able to duplicate easily – if at all. Johnson, B., Manyika, J., & Yee, L. (2005). The next revolution in interactions. McKinsey Quarterly, 4, 20-33.

40. Where are the opportunities? Everywhere!

41. 14B Big Bang (Natural World) 10K Cities (Human-Made World) bees (social division-of-labor) transistor (routine cognitive work) 60 200M Where is the “Real Science” - mysteries to explain? In the many sciences that study the natural and human-made worlds… Unraveling the mystery of evolving hierarchical-complexity in new populations… To discover the world’s architectures and mechanisms for computing non-zero-sum Entity Architectures (ЄN) of nested, networked Holistic-Product-Service-Systems (HPSS) Time writing (symbols and scribes, stored memory and knowledge) ECOLOGY written laws (governance and stored control) money (governed transportable value stored value, “economic energy”) sun (energy) earth (molecules & stored energy) bacteria (single-cell life) sponges (multi-cell life) universities (knowledge workers) clams (neurons) printing press (books) trilobites (brains) steam engine (work)

42. Service Systems: Stakeholders & Resources 1. Individuals (People) 2. Infrastructure (Technology) 3. Shared Information (QoL Decision-Making) 4. Societal Institutions (Acad., Industry, Gov.) connected by win-win value propositions Computational System Smarter Technology Requires investment roadmap Smarter Buildings, Universities, Cities Requires investment roadmap A Science of Smarter Service Systems

43. Come visit IBM Almaden Research Center, San Jose, CA • Upcoming Conferences • Sept 27th, 2011 • Future Technologies,Skills & Jobs • July 2012 • ISSS & SRII 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. 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.” – Geddes • Dr. James (“Jim”) C. Spohrer • Innovation Champion & • Director, IBM University Programs & open worldwide entrepreneurship research (IBM UPower) WW • spohrer@us.ibm.com

45. Information, Quality-of-Life Demographics (Careers) Information, Quality-of-Life Demographics (Careers) Information, Quality-of-Life Demographics (Careers) Information, Quality-of-Life Demographics (Careers) Information, Quality-of-Life Demographics (Careers) Information, Quality-of-Life Demographics (Careers) Individuals & Certified Competences (Skills) Individuals & Certified Competences (Skills) Individuals & Certified Competences (Skills) Individuals & Certified Competences (Skills) Individuals & Certified Competences (Skills) Individuals & Certified Competences (Skills) Institutions & Roles (Jobs) Institutions & Roles (Jobs) Institutions & Roles (Jobs) Institutions & Roles (Jobs) Institutions & Roles (Jobs) Institutions & Roles (Jobs) Information, Quality-of-Life & Demographics (Careers) Infrastructure (Technologies Deployed) Infrastructure (Technologies Deployed) Infrastructure (Technologies Deployed) Infrastructure (Technologies Deployed) Infrastructure (Technologies Deployed) Infrastructure (Technologies Deployed) Future Individuals & Certified Competences (Skills) Institutions & Roles (Jobs) Policies & Investments Run-Transform-Innovate Governance Policies & Investments Run-Transform-Innovate Governance Infrastructure & Environment (Technologies Deployed) Present Policies & Investments Run-Transform-Innovate Governance Policies & Investments Run-Transform-Innovate Governance History Region 1 Region 2 Overview: Elements of Interest Frameworks Theories Models Policies & Investments Run-Transform-Innovate Governance Sept 27th Workshop at IBM Almaden

46. Laws of Service? • Computational power doubles at a predictable rate. • Are there analogous capability-doubling laws that apply in services? • Suppose that traces of human activity in particular service systems double at some rate, and that these human activity data lead to specific opportunities for improved or increased service productivity or quality. • Consider Amazon.com: The quality of recommendations depends on accurate statistics – the more purchases made, the better the statistics for recommendations. • Three improvement “laws” that might be applicable in services: • The more an activity is performed (time period doubling, demand doubling), the more opportunities to improve • The better an activity can be measured (sensor deployment doubling, sensor precision doubling, relevant measurement variables doubling) and modeled, the more opportunities to improve. • The more activities that depend on a common sub-step or process (doubling potential demand points), the more likely investment can be raised to improve the sub-step.

47. 2011 Priorities

48. Vision for the Educational Continuum: Individuals & Institutions Learning TECHNOLOGY IMMERSION Primary School Any Device Learning Secondary School PERSONAL LEARNING PATHS Workforce Skills Individuals Learning Continuum Student-Centered Processes Higher Education Continuing Education KNOWLEDGE SKILLS Learning Communities Intelligent • Aligned Data • Outcomes Insight GLOBAL INTEGRATION Economic Sustainability Instrumented • Student-centric • Integrated Assessment Services Specialization Institutions Learning Continuum Interconnected • Shared Services • Interoperable Processes ECONOMIC ALIGNMENT Systemic View of Education The Educational Continuum http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html 48

49. Population Challenges Opportunities Careers Complex Buildings: Modern Cities 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 Example: Singapore

50. Also see: Symbolic Species, Deacon Company of Strangers, Seabright Sciences of the Artificial, Simon Understanding the Human-Made World See Paul Romer’s Charter Cities Video: http://www.ted.com/talks/paul_romer.html