Happy New Year 2011 to you and the other pioneers in the service science community world wide!
Let’s start the new year right by introducing “whole service” as an ambitious and exciting new frontier area.
Everyone knows what self service is, and some have even heard of super service, but what is “whole service?”
To begin to get a feel for what “whole service” is, imagine creating whole new cities and nations from scratch… if you keep reading, you’ll see some very serious people are working on practical approaches to creating new cities and nations from scratch. But why would anyone want to do that, you ask? Two simple reasons, first,, changing an existing city or nation is really HARD WORK, too much inertia, and second, some cities and nations are failing many of their citizens, and so within them, its an unnecessarily HARD LIFE for too many. Furthermore, as you will also see, we are beginning to have the technology to do large scale projects quickly and cost-effectively that provide a good return on investment. So starting fresh, tabula rasa, opening up new frontiers, letting people “vote with their feet” to try new social and political experiments more quickly and accelerate progress for millions is the core idea behind Paul Romer’s Charter Cities and Patri Friedman’s Seasteading Nations… but before exploring these, let’s introduce two new service science concepts: “whole service” and “holistic service systems”…
Whole Service: Some service systems provide “whole service” to the people within them. For example, a city provides “whole service” for its citizens and visitors, including flow of things people need (e.g., transportation, water, food, energy, communications), development activities for people (e.g., buildings, retail, finance, health, education), and governance (e.g., laws, security, dispute resolution, etc.). To a lesser degree, but similar in kind, a luxury cruise-ship provides “whole service” to its passengers. Even old-time homestead farms and ranches, because they had to sustain families and hired hands sometimes over multiple generations with minimal external inputs, are to some degree providing “whole service” to those people living within them.
Holistic Service Systems: To first approximation, the study of holistic service systems is concerned with how well these entities provide “whole service” to the people within them. Whole service deals with a conjunction of three types of service, namely (1) flow of things people need, (2) development activities for people, and (3) governance for individuals and institutions. A holistic service system is defined as “a service system that can support the people within it, with some level of (1) completeness (quality of life associated with whole service – flows, development, and governance), (2) independence (from all external service systems),and (3) extended duration (longer than a month if necessary and in some cases indefinitely).” Noteworthy levels of completeness, independence, and extended duration of “whole service” are the three defining properties of holistic service systems.
Starting new nations has been done hundreds of times in human history. My forefathers did it, and so did yours. Starting a new city has been done tens of thousands of times in human history. While starting new nations and cities has not been done as many times as starting new businesses (hundreds of millions of times at least), nevertheless the founders of new nations and cities are every bit as entrepreneurial as the founders of new businesses. We will see that Romer and Friedman are not Utopians, they are instead Empiricists — they see making it easier to start cities and nations, as a way of doing more experiments more quickly. Some experiments may not turn out well, but others that work may more than make up for the failures.
Slowly, but surely the world view that businesses, cities, nations are all service systems is taking hold. And what is exciting to service scientists, those who study service systems, is that like agriculture “getting good at” growing crops and like manufacturing “getting good at” producing products, finally in human-history we are “getting good at” designing service systems. What does “getting good at” mean in practice? It means better return on investment for time, money, and effort. Outcomes will never be perfectly predictable, but knowledge has been accumulated that allows us to produce results more predictably than previous generations.
When the outcomes that are possible are deemed better than before, and the probabilities of achieving those outcomes are empirically better than before – one might say “the present represents progress over the past.” Our generation enjoys more possibilities and better probabilities than previous generations of living longer lives, owning our own home, seeing our kids go to college, and the list could go on an on.
Nevertheless, “progress” is a tricky thing to define. For now, let’s just say that one measure of human progress is more knowledge of agriculture, manufacturing, cities, nations, and other complex service systems, and being able to design them better and get not only better possible outcomes, but more predictable outcomes as well.
So in today’s world, how might one go about starting a new city or new nation?
Paul Romer’s Charter Cities
Before reading further take 30 minutes and watch the following YouTube video.
As Paul Romer has said “There‘s no impediment, other than a failure of imagination, that will keep us from delivering on a truly global win-win solution.”
The Charter Cities webside (http://www.chartercities.org/) explains it this way: “Charter cities offer a truly global win-win solution. These cities address global poverty by giving people the chance to escape from precarious and harmful subsistence agriculture or dangerous urban slums. Charter cities let people move to a place with rules that provide security, economic opportunity, and improved quality of life. Charter cities also give leaders more options for improving governance and investors more opportunities to finance socially beneficial infrastructure projects. All it takes to grow a charter city is an unoccupied piece of land and a charter. The human, material, and financial resources needed to build a new city will follow, attracted by the chance to work together under the good rules that the charter specifies. Action by one or more existing governments can provide the essentials. One government provides land and one or more governments grant the charter and stand ready to enforce it. What might a charter city look like? The concept of a charter city is flexible. Consider three specific examples: Case 1: Canada develops a Hong Kong in Cuba, Case 2: Indonesians flock to a manufacturing hub in Australia, Case 3: States in India compete for the chance to build a charter city.”
Patri Friedman’s Seasteading Nations
While not as well developed or polished as the previous video, before reading further take 5 minutes and watch the following YouTube video:
As Patri Friedman has said “With a little technical innovation… we can unleash enormous political innovation… let a thousand nations bloom on the high seas.”
The Seasteading Institute website (http://seasteading.org/) explains it this way: “At The Seasteading Institute, we believe that experiments are the source of all progress: to find something better, you have to try something new. But right now, there is no open space for experimenting with new societies. That’s why we work to enable seasteading communities — floating cities — which will allow the next generation of pioneers to peacefully test new ideas for government. The most successful can then inspire change in governments around the world. We’re opening this new frontier because humanity needs better ways to live together to unlock our full potential… Currently, it is very difficult to experiment with alternative social systems on a small scale; countries are so enormous that it is hard for an individual to make much difference. The world needs a place where those who wish to experiment with building new societies can go to test out their ideas. All land is already claimed — which makes the oceans humanity’s next frontier.”
If cities and nations seem too much to bite off, let’s look at a smaller holistic service system, such as luxury resort hotels first. Each year one or more new luxury resort hotels pops up somewhere in the world…. let’s look inside one of these for lessons in creating a holistic service system.
Kim Grange’s Venetian Resort
A luxury resort hotel provides whole service, but is smaller than a city or nation, so before reading further take 3 minutes and watch the following YouTube video.
In fact, it is short enough you should watch it two or three times, and note the amazing service variety available, as well as the desire to keep the casinos – the revenue engines of these service systems going – to maintain viability, even if cut off from some of the service utilities that are provisioned by the city of Las Vegas. As Kim Grange says in the video… “Here at the Venetian, we are a city-within-a-city… we’ve got to keep the casino running, that’s our revenue…”
Many luxury resort hotels are under construction around the world today, and they resemble miniature cities. Luxury resort hotels must provide “whole service” and many amenities to their customers – or customers would not pay the premiums they do to be there. Within the service science community a great deal is known about luxury resort hotels, and so this provides a good foundation for future research on “whole service” and “holistic service systems.” For example, see the hospitality leadership research reports at the following website http://www.hotelschool.cornell.edu/research/chr/pubs/reports/
But what does it cost to build a luxury resort hotel? According to hospitality consultants HVS, the average allocations of budgeted costs for hotels are 13% for land, 11% for development and soft costs, 61% for site improvement and building construction, 12% for furniture, fixtures, and equipment, 3% for pre-opening and working capital (see http://www.docstoc.com/docs/1604634/How-Much-Does-it-Cost-to-Build-a-Hotel). Using the room as a basic unit of measure, actually costs range from $30,000 per room for economy hotels up to $600,000 per room for luxury hotels and resorts.
Also, thanks to technological advances and economies of scale, over time the amenities of economy hotels get better and better, and the relative cost of hotels to the GDP per capita of nations is most likely going down. So changes in technology and economies of scales result in lower and lower costs over time for modular construction of hotels, cities, and nations – as holistic service systems. For example, to understand the power of modularization in lowering building costs, watching the following five minute video is well worth the time… http://www.flixxy.com/shipping-container-homes.htm
Eric Reynolds, founding director of urban space management, has shown the value of shipping containers as modules for construction projects.
Also, there is evidence to suggest the more advanced the building material, the shorter the service life of a building is likely to be. At first this seems paradoxical to most people, they reasons that more modern materials would make buildings last longer, right? Yes, but more modern materials offer advantages that make rebuilding more cost effective as well! For example, Jennifer O’Connor, a researcher at Forintek Canada Corp, did a survey on the service lives of buildings and found results that challenge many of the common assumptions about building longevity (http://www.softwoodlumber.org/pdfs/SurveyonActualServiceLives.pdf). Wood buildings were found to have longer service lives that steel and concrete buildings for example. Also, the average building service life in a survey of over 200 buildings was around 75 years. It may be reasonable to assume that the average service life of buildings is actually decreasing, as more modern building materials are used. Better knowledge and technologies, shortens the service life of infrastructure and things, because people are willing to invest to replace it more often.
So where are the modular building blocks of future cities heading? Not surprisingly, they are going green to eliminate waste, and enhance sustainability.
Harrison Fraker’s EcoBlocks
A city block can be designed as a whole system, so before reading further take 10 minutes and review these Slideshare slides:
As Harrison Fraker’s has written (http://bie.berkeley.edu/ecoblocks) “…the Qingdao EcoBlock, uses an integrated whole-systems approach to generate all its energy from on-site renewables, to recycle all of its water and to recycle over 80% of its waste for on-site uses.,. The integrated, whole-systems approach is made of proven existing technologies. The innovation lies in how the systems work together. The sustainable systems add 5-10% to the cost of typical development and have a 6-10 year payback, depending on the policy regulations of the city. The concept has the potential to be a profitable business opportunity for the developer who is also the property manager. While the systems do not depend on any change in homeowner operation and maintenance, ”
So returning to the concepts of “whole service” and “holistic service systems” we can begin to see numerous opportunities for research and practice coming into focus. Recall whole service deals with a conjunction of three types of service, namely (1) flow of things people need, (2) development activities for people, and (3) governance for individuals and institutions. Also recall that a holistic service system is defined as “a service system that can support support the people within it, with some level of (1) completeness (quality of life associated with whole service – flows, development, and governance), (2) independence (from all external service systems),and (3) extended duration (longer than a month if necessary and in some cases indefinitely).”
If the trends related to building luxury resort hotels, cruise-ship nations, ecoblocks, and cities continue, some interesting cross-over points are coming in just a decade or two. From a whole service perspective, the flow of things will become more interconnected and efficient – so independence levels will go up as the cross-over point of most materials coming from recycling rather from outside the system occurs. For example, ecoblocks link water, waste, and energy to boost independence levels. IBM has predicted that by 2015, computers will help energize your city (see http://www-03.ibm.com/press/us/en/pressrelease/33304.wss). So with respect to the flow of things people need (e.g., transportation, water, food, energy, ICT (computing and communications)) there will be more interconnectedness and greater levels of efficiency, and independence from outside systems, as a result. Also people augmented with smart phones and tied into the world’s knowledge in new ways (see http://www-03.ibm.com/press/us/en/pressrelease/33233.wss) means that development activities for people (e.g., buildings, retail, finance, health, education) are likely to include better possibilities and better probabilities as a result of enhanced capabilities. More and more information-poor decision making will be replaced by information-rich decision-making. Finally, governance (e.g., laws, security, dispute resolution, etc.) will be informed by more social and political experiments, as if becomes cost effective over 75 year time frames, then 50 year time frames, and eventually perhaps even 20 year time frames to rebuild cities with the latest physical technologies as well as government technologies.
As the service science community comes to embrace and extend the concepts of whole service and holistic service systems, the integration of service systems for reducing waste (flows), enhancing capabilities (development), and periodic rebuilding (governance) will provide a foundation for more types of experiments, run more frequently, setting the stage for accelerating progress in the design of better and better holistic service systems. Achieving better levels of completeness, independence, and extended duration, if needed.
Whole service is about the design of complex societal service systems (see for example http://rayfisk.com/docs/Glasgow2008.pdf). Among the research priorities to advance the science of service, a global team of experts identified an area called “improving well-being through transformative service” (see http://wpcarey.asu.edu/csl/knowledge/Research-Priorities.cfm). The study of complex business and societal systems is increasingly of interest to members of the service research community (see for example, http://www.rhsmith.umd.edu/ccb/).
In conclusion, consider two final points:
First, in many ways, universities are the most important types of holistic service systems in an accelerating knowledge economy. Universities are mini-cities, and can become the living labs for much of the research on whole service. NYU’s John Sexton describes the coming of the global networked university (http://www.nyu.edu/about/leadership-university-administration/office-of-the-president/redirect/speeches-statements/global-network-university-reflection.html). Sexton notes that “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. ” In many areas, thanks to universities, we are seeing an acceleration of progress flowing from one area of the world to another. Hans Rosling makes this point for health and wealth in a four minute video that shows 200 nations evolving over 200 years (http://www.flixxy.com/200-countries-200-years-4-minutes.htm). Some of my capstone project students have been developing something similar that looks at top university education and wealth of nations (http://www.upload-it.fr/files/1513639149/graph.html). Truly, universities are the knowledge batteries of regions an essential to accelerating progress (see http://www.slideshare.net/spohrer/icsoc-20101208-v2). And yet, as Richard Larson of MIT reminds us, education remains terribly under-studied relative to its importance (http://www.sersci.com/ServiceScience/paper_details.php?id=40).
Second, not everyone shares the view that service is worthy of scientific research, nor even a worthy part of the national economy. Perhaps, it is good for us all to read some of the contrarian views. Here is another take on whole service — the view that the “whole service economy” should just go away (http://pogoprinciple.wordpress.com/2009/06/18/a-nation-of-hamburger-flippers/). “Peter Schiff: The whole service sector economy has to go away…
We have assumed, for some time now, that employment in the service sector was doomed in this crisis. We just came across this quote from Peter Schiff from 2007 which, for the first time, put into words what we have been awkwardly trying to explain on this blog to anyone who would happen by and read it.
Peter Schiff (2007): December’s larger than expected jump in non-farm payrolls is predictably being touted as evidence of a more vibrant U.S. economy. Unfortunately, the data does not support this conclusion. The bloated service sector added 178,000 jobs, while manufacturing shed another 12,000 jobs. What this means is that 178,000 more workers will be consuming goods while 12,000 fewer will be making them. The result will be larger trade deficits that merely compound already stretched global imbalances and exacerbate America’s inevitable day of reckoning. A service sector can only exist so long as it is supported by a vibrant manufacturing sector. The reason is simple. People employed in the service sector consume goods but do not actually produce any of them. Therefore they must rely on others, who presumably benefit from their services, to produce goods in their stead.”
We have our work cut out for us. We can only hope that new books, like UC Berkeley’s Henry Chesbrough’s “Open Services Innovation” (http://www.openinnovation.net/featured/to-innovate-think-of-your-business-as-a-service/) and others that are forthcoming by others, can help educate policy makers, journalists, academics, industry and government professionals, and even a few of the well-known contrarians – that sooner or later, we have to view all businesses and complex human systems from a service systems perspective.
And again – Happy New Year 2011!