How can universities win the race with ever smarter machines?

Machines are getting faster and algorithms better, so how might this help unlock more opportunities for the creative teams in society?

If you haven’t read “Race Against the Machine” read this first, then read the eBook…
http://sloanreview.mit.edu/the-magazine/2012-winter/53208/winning-the-race-with-ever-smarter-machines/

Augmented teams of people are able to solve complex problems more rapidly…
http://www.nytimes.com/2012/11/24/science/scientists-see-advances-in-deep-learning-a-part-of-artificial-intelligence.html
“This is a really breathtaking result because it is the first time that deep learning won, and more significantly it won on a data set that it wouldn’t have been expected to win at,” said Anthony Goldbloom, chief executive and founder of Kaggle, a company that organizes data science competitions, including the Merck contest. .. The technology, called deep learning, has already been put to use in [Smart Phone]services… ”

Cognitive tools that augment human intelligence are on the same type of evolutionary journey as tools that augment human physical strength (steam engines, cars, etc.)…

Some even foresee what will be coming after the Smart Phone era..
http://www.businessinsider.com/the-end-of-the-smartphone-era-is-coming-2012-11

“Computers have been getting smaller and closer to our faces since their very beginning. First they were in big rooms, then they sat on desktops, then they sat on our laps, and now they’re in our palms. Next they’ll be on our faces.  (Eventually they’ll be in our brains.)”

Every technology augment is eventually disrupted….
Slide rule -> calculator -> “smart” phone -> “super smart” glasses -> “super-duper smart” implants….

What do “cognitively augmented people” do in the future?
We should keep our eye on Kickstarter and other crowd-funding sites for projects that people have a passion to achieve, but require collective action.
http://www.kickstarter.com/

What if industry required universities to post their projects to Kickstarter?
https://service-science.info/archives/2538

Furthermore, what if all industry AND government funding programs for universities required faculty and students to post to Kickstarter?

Might this increase entrepreneurial culture at universities?

I would like to see someone invent a mechanism to incent/crowd-fund top new faculty to go work in universities with the lowest academic rankings in the world… If top new faculty could get rich by going to the weakest universities – this would be akin to the NFL Draft (every year weakest team gets first draft choice for top college athlete), and help improve competitive parity of regions.
http://online.wsj.com/article/SB10000872396390444734804578062802698020758.html

If this last one seems too strange – top faculty going to depressed regions – check this out – the best minds at MIT are focussing on where the biggest challenges in the world happen to be and going there to work on the challenges with local entrepreneurs:
http://www.wired.co.uk/magazine/archive/2012/11/features/open-university?page=all

“Joi Ito, 46-year-old director of MIT’s Media Lab since last September, has just selected the faculty’s newest outpost: the troubled streets of downtown Detroit. “I was in a rough neighbourhood there yesterday, where there are miles and miles of bombed out buildings, and it just blows your mind to see a bunch of kids building urban farms,” he says back in his office in Cambridge, Massachusetts. “They have no streetlights. If you connect a streetlight to the grid, it gets controlled by the city and regulated. So they’re thinking, how can we create solar-powered low-cost streetlights, as that will lower crime? They have a maker space in a church, a place where the kids can learn how to build a computer, a bike shop where they can learn how to do repairs. The kid who runs this place, Jeff Sturges, is awesome.We’re sending a bunch of Media Lab people to Detroit to work with local innovators already doing stuff on the ground.” ”

Therefore in the age of smart technology, we will need better ways to combine our resources to take collective action on what really matters to people, and to ensure the flow of top talent to the regions of the world that need them the most… people who flow into those regions should have an incentive, and it would be great if someone could create the policy mechanism to achieve that… right now people in poorer regions try to migrate to richer regions… and the brightest sometimes succeed at that through a series of life choices…
http://www.oxfordmartin.ox.ac.uk/videos/view/211

CFC: Smart Manufacturing Innovation and Transformation: Interconnection and Intelligence

CALL FOR CHAPTER PROPOSALS
Proposal Submission Deadline: Jan 15, 2013
Smart Manufacturing Innovation and Transformation: Interconnection and Intelligence
A book edited by Dr. Zongwei Luo (University of Hong Kong, Hong Kong, China)

To be published by IGI Global: http://www.igi-global.com/requests/details.asp?ID=870

Introduction
Fast advances in information technology (RFID, sensor, Internet of things, and the Cloud) have led to a smarter world vision with ubiquitous interconnection and intelligence. Smart manufacturing refers to advanced manufacturing with wise adoption of information technologies throughout end to end product and service life-cycles, capturing manufacturing intelligence for wise production and services. Smart manufacturing represents a field with intense competition in this century of national competitiveness.

Objective of the Book
This book will provide a forum of innovative findings in advanced manufacturing research and development. It aims to promote an international knowledge exchange community involving multidisciplinary participation from researchers, practitioners, and academicians with insight addressing issues in real life problems towards smarter manufacturing. By disseminating latest developments in smart manufacturing innovation and transformation in manufacturing upon current and/or emerging technology opportunities and market imperatives, this book covers both theoretical perspectives and practical approaches for smart manufacturing research and development triggered by ubiquitous interconnection and intelligence, enabling manufacturing innovation and transformation.

Target audience
This book will provide a forum of innovative findings in advanced manufacturing research and development. It aims to promote an international knowledge exchange community involving multidisciplinary participation from researchers, practitioners, and academicians with insight addressing issues in real life problems towards smarter manufacturing. The target audience would include multidisciplinary participants from society, industry, academia, and government.

Recommended topics include, but are not limited to, the following:

* Business models and mechanism design
* Big data computing and intelligence
* Transparent and service computing
* Social and human centric computing
* Robotics and automation
* SCM/Logistics for advanced manufacturing
* MEMS/Hybrid systems for advanced manufacturing
* E-commerce for advanced manufacturing
* Manufacturing intelligence
* Manufacturing sustainability
* Digital and additive manufacturing
* RFID/Internet of Things and cloud computing
* CAD/CAM/CAE/CAPP
* PLM/ERP/CRM
* Structural health monitoring

Submission Procedure
Researchers and practitioners are invited to submit on or before January 15, 2013, a 2-3 page chapter proposal clearly explaining the mission and concerns of his or her proposed chapter. Authors of accepted proposals will be notified by February 15, 2013 about the status of their proposals and sent chapter guidelines. Full chapters are expected to be submitted by April 15, 2013. All submitted chapters will be reviewed on a double-blind review basis. Contributors may also be requested to serve as reviewers for this project.

Publisher
This book is scheduled to be published by IGI Global (formerly Idea Group Inc.), publisher of the Information Science Reference (formerly Idea Group Reference), Medical Information Science Reference, Business Science Reference, and Engineering Science Reference imprints. For additional information regarding the publisher, please visit www.igi-global.com. This book is anticipated to be released in 2014.

Important Dates
January 15, 2013:                Proposal Submission Deadline
February 15, 2013:                Notification of Acceptance
May 15, 2013:                Full Chapter Submission
June 30, 2013:                Review Results Returned
August 15, 2013:                Final Chapter Submission
September 15, 2013:                Final Deadline

Inquiries and submissions can be forwarded electronically (Word document) or by mail to the Editor:
Zongwei Luo
E-mail:
zwluo@eti.hku.hk
Land mail:
University of Hong Kong
Level 3, Block A, Cyberport 4, 100 Cyberport Road, Hong Kong _______________________________________________
Service-science-section mailing list
Service-science-section@list.informs.org
http://list.informs.org/mailman/listinfo/service-science-section

Patents and Public Support of Research

Stephen Perelgut sent these really insightful links:

A pro/con discussion of the value of patents – quite instructive in its own right and it lays out the fundamental issues around ownership of IP: http://www.rsc.org/chemistryworld/Issues/2006/October/HeadToHead.asp

Head to Head: Patents Pro/Con Arguments

FOR
Barry Treves, President of the Chartered Institute of Patent Attorneys, UK
Patents protect inventions by giving the owner of the patent the right to stop anyone from making or using the invention without the owner’s permission

AGAINST
Terence Kealey, Vice-chancellor and clinical biochemist, University of Buckingham, UK
Patents are a menace. Inventors claim they need patents to incentivise their research but, today, it is the company that fails to innovate that goes bust. Companies take out patents, therefore, to neutralise the competition, so that they need do no more research.

More coherently, the argument for and against public support for research, particularly at universities, is laid out in:
http://www.economist.com/debate/days/view/863

Opening statements: Should public money be used to fund applied research?

Defending the motion
Andrew Miller, Labour MP and Chair of the House of Commons Science and Technology Select Committee
Private funders of research will rarely be persuaded to put the necessary money into the long-term, low-return applied research that was crucial to the early development of space technology or future energy potential such as advanced battery technology.

Against the motion
Terence Kealey, Vice Chancellor, University of Buckingham
The OECD has speculated that, when governments fund research, they might only displace or crowd out its private funding. Companies fund their own research, so, when governments fund it, companies may simply withdraw their own money.

This also looks promising
http://www.emeraldinsight.com/journals.htm/journals.htm?articleid=1823463&show=html&WT.mc_id=alsoread

Moira H. Decter, (2009) “Comparative review of UK-USA industry-university relationships”, Education + Training, Vol. 51 Iss: 8/9, pp.624 – 634

Purpose – The purpose of this paper is to explore significant historical changes, legislation and policy in the UK and USA from the 1960s to present day relating to university-industry relationships.

Design/methodology/approach – The paper presents a review of papers, reports and policy documents from the UK and USA drawing comparisons of university-industry relations.

Findings – The paper finds that many UK and USA universities were originally rooted in their communities with strong links to local industries. This culture has persisted and been strengthened through legislation in the USA but changes in UK policy have resulted in reduced industry links.

Research limitations/implications – The paper draws on secondary sources. Future research will explore more directly effects of changes in UK universities on university-industry interactions.

Practical implications – In recent years there has been an increasing UK government focus on university-industry links. The paper seeks to show that the success of technology transfer in the USA has deeper contextual sources, which may not be easily reproduced in the UK. The history and culture of UK universities presents a barrier to current knowledge transfer initiatives.

Originality/value – Technology transfer in the UK and USA have been compared previously, but not set in the context of the history of the university sector. This has implications for current policy initiatives from UK government agencies seeking to develop university technology as a source of innovation for industry.

Tip: Starting New Student Competitions

Many university faculty especially engineering and business schools are seeking corporate sponsors for their existing or soon to be launched student innovation competitions.

Student innovation competitions are a great idea – the world needs more innovations, and it is a great experience for the students to win an innovation competition.  However, corporate sponsorships as a business model for these types of innovation challenges, limits the number of programs, and their sustainability.

As part of the transformation of universities – those faculty might be better advised to work to develop a short MOOC course (individually and collectively) that encourages students to post their innovation ideas to Kickstarter or related sites where many people can review the innovation pitch and decide whether or not to vote for it with a donation.

If students get funding to implement their innovation – they are real winners, with real “skin in the game.”

Also, Kickstarter funds documentaries, new innovation, and new businesses – so the following progression could be a series of wins…

innovation idea -> short video -> documentary -> prototype -> deployment -> business plan -> launch non-profit or business

So, faculty should think twice before starting a student competition, and instead help their students propose to crowdfunding sites, or innovate their own new crowdfunding site – meta-innovation!

There are many great Kickstarter project success stories already that can inspire student innovators.

Also, this helps in the transformation of faculty roles in universities along the progression towards more of a coach for knowledge application, not just knowledge transfer (teaching) or even knowledge creation (research):

View of University Priorities  include:
1. Knowledge transfer (teaching) – student tuition & government loans
2. Knowledge creation (research) – government grants & corporate partners
3. Knowledge application (entrepreneurship) – local incentives & alumni donations
4. Knowledge integration (bridge silos) – lowers costs without compromising depth
University business model is evolving (to fund the above, and continuously renew physical infrastructure)…

Ultimately, in the age of every smarter machines, the role of faculty will be helping students enter and win innovation competitions… this will be part of a regional transformation as well, not just the transformation of universities.

And of course the competition I would really like to see universities take on globally…. rapidly rebuilding societal infrastructure

Service is the application of knowledge for the benefit of others

Service innovations scale the benefits of new knowledge…  globally… rapidly….

Promoting service innovations for our interconnected world is the mission of ISSIP.org – become a member today.

Introduction to ISSIP.org, and see slide #33 with a reference to Kickstarter…

 

Some Key Words and Concepts

“service science” speak to “hot topic business” speak

service science is to the 21st Century -> as computer science was to 20th Century
   http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/
 http://www-03.ibm.com/ibm/history/ibm100/us/en/icons/servicescience/

big adjective: service -> smarter or social

big phrase: service ecology  -> Smarter Planet, Social Business

big phrase: service systems -> Smarter Systems

big phrase: holistic service systems -> Smarter Cities, Smarter Regions

big phrase: nested, networked holistic service systems -> Smarter System of Systems

big change: information associated with service systems -> Big Data & Analytics, DEEP QA

big change: technology associated with service systems -> Cloud Computing and HPC (High Performance Computing)

big change: augmented people associated with service systems -> Social Business, Smart Phones/Mobile

big change: organizations responsibility associated with service systems -> CyberSecurity

big phrase: value propositions -> business models

big word: governance -> smarter government, open data, transparent government, Chesbrough’s “Open Services Innovation”

big words: entities, interactions, outcomes -> instrumented, interconnected, intelligent

big phrase: global service delivery center -> Globally Integrated Enterprise

big phrases:  service system learning, run-transform-innovation -> doing more with less, Run-Transform-Innovate, Moore’s “Escaping the Pull of the Past”

big change: defining service systems as dynamic configuration of shared resources -> future is about better access to anything, anytime, anywhere (Internet of Things)

big concept: modeling service systems, CAD for service systems -> Component Business Modeling with KPIs

big concept: service dominant logic or service logic or value co-creation logic -> win-win mindset

big concept: T-shaped professionals -> future innovators can work on teams that are multiple disciplines, industry sectors, cultures (global) doing collaborative innovation

big concept: T-shaped adaptive innovator -> IBM Global Entrepreneur Program and Smart Camps

Building More Sustainable Regions: Value Co-Creation Logic (AKA Service Logic)

Today, two types of regional studies are very important to work towards for building more sustainable regions.

(1) Material Flow Analysis
http://www.sei-international.org/mediamanager/documents/Publications/Future/Material_Flow_Analysis_york.pdf

(2) University Economic Impact
http://community.harvard.edu/economic_impact

To become more sustainable, regions need to work towards circular economies – guided by above studies.

What is a circular economy?  Watch this video…

The logic of leasing over ownership , to improve recycling and value co-creation, is of course well illustrated in Rolls Royce’s “Power By The Hour” concept:
http://www.mcasolutions.com/pdf/KnowledgeWharton02-07.pdf

Regions can be viewed as five levels of nested complex systems – universities in cities in states in nations in continents.

To be more sustainable, each level must strengthen local jobs/talent and minimize costly material flows.
http://www.nytimes.com/interactive/2011/05/15/magazine/art-of-economic-complexity.html

The regional logic must shift to rethinking “agriculture and manufacturing as a type of local recycling service” – this is a service logic or value-cocreation logic.
http://sdlogic.net/

So a fun design for a sustainability summit might include speakers on four key topics:
(1) regional studies on: material flow analysis
(2) regional studies on: university-as-driver-of-regional-economic-impact-and-talent
(3) policy advocates for balancing circular  and import-export regional economies
(4) policy advocates for balancing winner-take-all and improve-weakest-link regional economies

This last item above is needed to accelerate learning between interconnected regions and improve four key measures of regions:
innovativeness
equity (competitive parity)
sustainability
resilience

What are examples of improve-weakest-link policy in the real world today?

(a) Works Pretty Well: NFL Draft
The weakest team each year gets best college player.
http://online.wsj.com/article/SB10000872396390444734804578062802698020758.html
http://www.buzzle.com/articles/nfl-salaries-by-team.html

(b) Almost Works, But Not Quite: European Union
The richest, most productive nations, give favorable loans to the weakest, least productive nations.
http://www.businessinsider.com/video-george-soros-speech-italy-euro-crisis-2012-8
http://en.wikipedia.org/wiki/Budget_of_the_European_Union

The planet is slowly evolving to interconnect – at all scales – sustainability regions into a nested, networked set of holistic service systems, that accelerate learning (innovativeness), while improving equity (competitive parity) with a focus on long-term sustainability and resilience of regions.
See this paper: http://servsci.journal.informs.org/content/4/2/147.abstract

Regions that export natural resources, and then buy back finished products paying a 10x mark up on those goods, are not well-positioned for long-term sustainability.  Regions that export their trash and then buyback products paying a 10x mark up on those goods, are not well-positioned for long-term sustainability.   The export of natural resources and trash, incur energy costs – but more importantly in the long run, they deprive regions of needed knowledge of processes, and the talent/job/future innovations that depend on local knowledge of those processes.
http://www.nytimes.com/interactive/2011/05/15/magazine/art-of-economic-complexity.html

Throughout most of human history, nearly all regions were very sustainable, with minimal human-driven material flows into and out of regions.  In the last two hundred years, the pendulum has swung away from local sustainability towards import-export economies in part driven by specialization (Adam Smith) and comparative advantage (Ricardo), as well as lower transportation and communication costs, but now there is evidence that the pendulum may be swinging back – restoring regions local productive capacities.
http://wadhwa.com/2012/07/23/forbes-the-end-of-chinese-manufacturing-and-rebirth-of-u-s-industry/

Regions that recycle material resources (local processes) and improve human capital (local talent) are well-positioned to link with other like-minded regions to accelerate improvements in measures of  innovativeness, equity (competitive parity), sustainability, and resilience.  Local material and energy supply chains and global information and talent supply chains are evolving globally.

 

Talk: Creating Service Inventories for Competitive Advantage (Davis & Field)

Almaden Visitor Talk: Service Science Series

In conjunction with ISSIP.org (contact: info@issip.org)

Talk: Creating Service Inventories for Competitive Advantage
Speakers:   Mark Davis (Bentley), Joy Field (Boston College)
Date: November 20, 2012
Location: IBM Almaden Research Center, 650 HarryRoad, San Jose, CA, 95120
Time: 11:00am-12:00pm, Room J2-109
Host: Jim Spohrer  Director, IBM University Programs Worldwide
Contact spohrer@us.ibm.com to attend (space limited).

Abstract

Technology has dramatically affected today’s competitive environment for businesses in general, and for services in particular. Service organizations in virtually every industry now have access to basically the same external resources. Even economies of scale, which were once seen as a significant competitive advantage, are now being democratized by advances in information technology. As a result, emerging service organizations can compete on a regular basis with larger well established firms. In such a competitive environment, service firms must look internally to how they design their service delivery processes to develop a truly sustainable competitive advantage in the market place. One element in the design of the service delivery process that appears to offer such opportunities for developing a competitive advantage is the creation of service inventories in the service delivery process.

The simultaneity of production and consumption during the service delivery process coupled with the perishability of the provider’s capacity (both of which are due to the customer’s interaction with the service process) lead to the natural conclusion that services cannot be inventoried.  Prior to the introduction of the concept of service inventory by Chopra and Lariviere (2005), this basic tenet of services remained unchallenged. Although service inventories can be either physical or digital, we focus primarily on the creation of digital service inventories.

Our objective in developing this framework is to explicitly acknowledge the increasing role of technology and how it can provide service firms with a competitive advantage in the design of their service delivery processes with specific emphasis on the creation of service inventory. The shifting of the boundary towards the customer provides increasing opportunities for creating service inventories. This synergistic effect of both increasing the level of customer interaction during the value co-creation process and creating service inventories can provide firms with a sustainable competitive advantage.

Speaker Bios

Mark M. Davis is Professor of Operations Management at Bentley College in Waltham, MA.   He received a BSEE from Tufts University, and an MBA and DBA from Boston University. He worked as a manufacturing engineer for the General Electric Company and is a graduate of its Manufacturing Management Program. He was also a programs manager for the U.S. Army Natick Research Laboratories, where he focused on the design of military foodservice systems.   In addition to publishing numerous articles, Dr. Davis is also the co-author of two textbooks: Operations Management: Integrating Manufacturing and Services, (McGraw-Hill/Irwin, 2005, 5th edition, with Janelle Heineke), and Managing Services: Using Technology to Create Value (McGraw-Hill/Irwin, 2003, with Janelle Heineke).  Dr. Davis is a Past President of the Decision Sciences Institute (DSI). He also served as Program Chair for the 2003 DSI Annual Meeting, Secretary and as a member of the DSI Board of Directors, and is a Past President of the Northeast Decision Sciences Institute. In 2000, he was named a Fellow in the Decision Sciences Institute. In 1998, Dr. Davis received Bentley College’s Scholar of the Year Award. He was appointed to the 1996 Board of Examiners for the Malcolm Baldrige National Quality Award. Dr. Davis won the Innovative Education Award for Best Paper (with Jane Tchaicha) at the 2002 Annual Meeting of the Northeast Decision Sciences Institute. Dr. Davis currently serves on the editorial review board of The Journal of Service Management and on the Board of Overseers for Mass Excellence.   As a visiting professor, Dr. Davis has taught courses/workshops in service operations/management at Cornell University’s School of Hotel Administration in Ithaca, New York; Instituto de Empresa in Madrid, Spain; Groupe HEC in Paris, France; Keio University in Tokyo, Japan; Al Akhawayn University in Casablanca, Morocco, and Macquarie University in Sydney, Australia.

Joy M. Field is an Associate Professor of Operations Management in the Carroll School of Management at Boston College. She received an MBA, MS in statistics, and PhD in operations management from the University of Minnesota. Her research and consulting focuses on designing and managing the service co-creation process to improve its efficiency and effectiveness, with an emphasis on the role of the customer co-producer. Her work has been published in leading journals such as Academy of Management Journal, Decisions Sciences, Journal of Operations Management, Manufacturing & Service Operations Management, Production and Operations Management, and Strategic Management Journal. In addition to journal publications, she is the author of the book, Designing Service Processes to Unlock Value, published by Business Expert Press.  She serves as an associate editor for Decision Sciences and Journal of Operations Management.  Prior to her career in academia, she was an industrial engineer and financial analyst for Unisys.

Talk: Creating Service Inventories for Competitive Advantage
Speakers:   Mark Davis (Bentley), Joy Field (Boston College)
Date: November 20, 2012
Location: IBM Almaden Research Center, 650 HarryRoad, San Jose, CA, 95120
Time: 11:00am-12:00pm, Room J2-109
Host: Jim Spohrer  Director, IBM University Programs Worldwide
Contact spohrer@us.ibm.com to attend (space limited).

In conjunction with ISSIP.org (contact: info@issip.org)
Almaden Visitor Talk: Service Science Series

CFP: The Naples Forum on Service (Deadline: Dec 15th)

For more information see the website.
http://sdlogic.net/uploads/2/7/3/5/2735531/call_for_papers_-_2013_naples_forum_on_service.pdf

HOSTED BY
The University of Salerno and The University of Naples “Federico II”

CHAIRPERSONS
Evert GUMMESSON, Professor, Stockholm University, Sweden
Cristina MELE, Associate Professor, University of Naples “Federico II”, Italy
Francesco POLESE, Associate Professor, University of Salerno, Italy

KEYNOTE SPEAKERS
Evert GUMMESSON, Stockholm University, Sweden.
Robert LUSCH, University of Arizona, USA and Stephen VARGO, University of Hawaii, USA.
Jim SPOHRER, IBM Almaden Research Center, San Jose, USA.

SCIENTIFIC COMMITTEE
The Scientific Committee members will act as advisors to the Chairs and support the scientific level of the Forum.
Important tasks for the members are the participation in the review process of submitted abstracts and the selection of the
Best Paper Awards. The Scientific Committee members will serve as discussants during sessions.
President: Paolo Stampacchia, University of Naples “Federico II”, Italy
Claudio Baccarani, University of Verona, Italy
David Ballantyne, University of Otago, New Zealand
Ralph Badinelli, University of Virginia Tech, USA
Sergio Barile, University of Rome “La Sapienza”, Italy
Rod Brodie, University of Auckland, New Zealand
Antonella Carù, University of Milan “Bocconi”, Italy
Daniele Dalli, University of Pisa, Italy
Renato Fiocca, University Cattolica del Sacro Cuore, Milan, Italy
Gaetano Golinelli, University of Rome “La Sapienza”, Italy
Michael Kleinaltenkamp, University of Berlin, Germany
Helge Löbler, University of Leipzig, Germany
Robert Lusch, University of Arizona, USA
Paul Maglio, IBM Almaden Research Center, San Jose, USA
Irene Ng, WMG – University of Warwick, UK
Jaqueline Pels, University of Torquato de Tella, Argentina
Enzo Rullani, Venice International University, Italy
Jim Spohrer, IBM Almaden Research Center, San Jose, USA
Kaj Storbacka, Hanken School of Economics, Finland
Annalisa Tunisini, University of Urbino, Italy
Stephen Vargo, University of Hawaii, USA

THE 3 PILLARS OF THE NAPLES FORUM
The Naples Forum on Service is here for the third time. The first two on Capri (in 2009 and 2011) each had 150
participants from 25 countries. This was more than we had expected and as many as we could manage and still keep a
close and intimate atmosphere. For the 2013 Forum we change to the neighboring island of Ischia, a charming venue
with hot springs and spas. When the ideas of the Naples Forum started to brew we thought of an interactive conference
focused on the future of service and marketing, a conference that should make a difference and contribute to a revival of
our disciplines. In the development of service research we have discerned three paradigms (for a brief article on the
paradigms, see Gummesson, 2012).
Paradigm 1 (pre-1970s) where service was not at all on the agenda in marketing and management research and
education.
Paradigm 2 (1970s-2000s) when service research grew exponentially with seminal contributions from Northern
Europe, France, UK, USA and other countries with goods/services differences in the center but lacking syntheses
and unifying theory.
Paradigm 3 (2000s-) when service research moved its focus from differences to commonalities and
interdependencies between goods and services. It also moved from the supplier value chain to the value network of
all stakeholders (“balanced centricity”) and service (in the singular) became the output irrespective of input. The
roles of suppliers and customers have also changed through the recognition of cocreation of value with resource
integration with customer-to-customer interaction (C2C) or more broadly as actor-to-actor interaction (A2A). In the
core of Paradigm 3 is the recognition of complexity. Service systems are enormously complex – it is not sufficient to
study the relationship between just a few variables. The new millennium brought with it openings to address
complexity and take a more systemic view. Service-Dominant (S-D) Logic contributed a tentative higher level
service theory of the best contributions of the past and showed directions for the future. Service Science started from
practitioner experiences and challenges our way of designing and implementing service systems. Network Theory
and Systems Theory have been deployed to address complexity with applications like Many-to-Many-Marketing and
the Viable Systems Approach (VSA). These developments form the 3 Pillars of the Naples Forum. With them it is
motivated to label our current economy a Service Economy.
The transition to Paradigm 3 is developing – but it takes decades. Service research got under way 40 years ago and
it is only now that we are beginning to sense the full picture of our economies as complex networks of service systems
with a mission to enhance value for consumers, citizens, businesses and society as a whole. The following sections offer
brief reviews of the characteristics of the 3 Pillars.
Service Dominant (S-D) Logic
S-D logic is a synthesis of the best from Paradigm 2 leaving unproductive approaches and myths behind. Paradigm
2 took its vantage point in “differences” between goods and services – without ever being able to define goods and
services and pinpoint their generic properties. It had long been observed, among others by members of the Nordic
School, that goods and services always appear in symbiosis. The emphasis on differences led to the idea that the
service sector is growing and that all new jobs come from services. But the “service sector” cannot be defined. It is just
a listing of market offerings as alleged services (restaurants, airlines, health care etc.) and worse: the service sector has
become a dump for everything that does not qualify as goods. Further, when companies outsource internal functions or
divide their operations in profit centers and make them separate companies, much of what was included under goods
manufacturing is now transferred into the service sector – but the same operations are performed as before. No wonder
that the service sector is growing in official statistics! The division in sectors is seller and production centric whereas
marketing for 50 years has preached that we should be customer oriented. S-D logic shows that it is more realistic to see
service as value-creating activities with many contributing stakeholders; it is not just a dyadic supplier-customer
relationship.
Paradigm 2 fulfilled a mission of breaking the deadlock of Paradigm 1 and Paradigm 3 had not been possible
without it. So it is not a matter of criticizing the past but to see a potential for future development. Bob Lusch and Steve
Vargo who designed S-D logic keep developing it and treat it as an open code where everyone is welcome to make
constructive contributions.
S-D logic summarizes its message in ten foundational premises. In brief, these premises put the following to the
fore. The most critical changes include moving from goods/services differences to goods/service interdependencies. The
word service is given a new meaning, going from an undefined input to the value of the output and value-in-use or in a
more generalized way to value-in-context. Service is the fundamental basis of exchange and goods are merely
distribution mechanisms of service. Both businesses and customers are operant (active) resources as opposed to the
mainstream marketing and economics idea that suppliers do things to customers who are just reactive or passive
(operand resources). A supplier can only offer a value proposition on the market; the value actualization rest with users
in an idiosyncratic and contextual way. The network aspect is implicit through the statement that all social and
economic actors are cocreators and resource integrators, implying that value creation takes place through interaction in
complex networks and systems.
Service Science
IBM is a century old corporation in computer technology and consulting. It is one of the most successful businesses
in the world and with a staff of over 400,000 one of the largest. It has always invested in long term basic research –
IBM employees have won five Nobel Prizes – and hold more patents than any other US company. Led by Dr. Jim
Spohrer the Service Science program started in the early 2000s challenging the service systems that constitute today’s
economies: Are the systems efficient and innovative enough? They found they are not. Today the Service Science
program cooperates with over 500 institutions of higher learning worldwide to stimulate research and education. Being
closer to universities of technology and computer science, IBM was initially unfamiliar with the service research
tradition at business schools. S-D logic provided IBM service systems thinking with a theory. Practice and academia
met – and it was love at first sight!
Service Science is a call for academia, industry, and governments to become more systemic about service
performance and innovation. Further, it is a proposed academic discipline and research area that would complement –
rather than replace – the many disciplines that contribute to knowledge about service. The ultimate goal of Service
Science is to apply scientific knowledge to the design and improvements of service systems for business and societal
purposes. The concern is that we do not master seamless and reliable service systems at a time when systems are
becoming increasingly complex and global, making us increasingly vulnerable to systems sluggishness and failure.
Every service system is both a provider and client of service that is connected by value propositions in value-creating
networks.
Service Science is a multidisciplinary open source program based on computer science, industrial engineering,
organizational theory, business strategy and more, including the humanities. In terms of science it investigates what
service systems are and how they evolve, and the roles of people, knowledge, shared information and technology, as
well as the relevance of customers inside production processes; in terms of management it investigates how to improve
and evaluate quality and productivity; and in terms of engineering it develops new designs of service systems with
better technologies and software.
In their effort “Create a smarter planet” Service Science identifies universities and cities as hubs. Both universities
and cities are tightly coupled holistic service systems. If we live in a city we are constantly dependent of systems of
transportation, water supplies, food procurement, energy distribution, building and construction, retailing, finance,
health care, education and many more. Some of these are in chronic crisis like city transportation with traffic jams and
health care with soaring costs. On a global scale the current financial crisis has shown that finance is an uncontrollable
hodgepodge of activities and unrelated subsystems that have run out of control.

Network and Systems Theory
The words complexity, networks and systems pinpoint the same phenomena. Complexity is derived from the Latin
verb complecti, meaning “to twine together” and the noun complexus means “network”. The word “system” is derived
from the Greek systema, meaning “a whole composed of many parts”. So the meanings of the three words overlap and
expose their interdependency. From these words different traditions have sprung up. Network theory and systems theory
offer both a way of thinking in relationships and interaction and techniques to address complexity and context. These
are part of complexity theory where many others, for example, chaos theory, fractal geometry and autopoiesis (selforganizing
systems) belong. Complexity theory exists both in social sciences, natural sciences and technology but is not
utilized efficiently by management disciplines. They can be used with different degrees of sophistication: 1. as a basis
for verbal discussions and texts; 2. as graphics, from hand-made sketches to computer generated diagrams; and 3. as
mathematical applications and computer simulations.
Dyadic relationships have been emphasized since the 1970s, especially in the B2B (business-to-business) studies
by the Industrial Marketing and Purchasing (IMP) Group, and in Paradigm 2 the service encounter – the interaction
between a service provider and a consumer – was a central concept. In the 1990s, Relationship Marketing and Customer
Relationship Management (CRM) helped raise the interest in relational approaches to marketing, service and
management in general. However, too many saw relationships as a tool to “manage the customer”, i.e. a mere addition
to the marketing mix and the 4Ps from Paradigm 1. The understanding that the dyadic relationship was too limited and
did not uncover real world complexity slowly raised the interest in networks and systems thinking. It is also an integral
part of both S-D logic and Service Science.
Network theory has primarily offered a systemic approach for B2B but has equal potential for B2C/C2B (businessto-
consumer/consumer-to-business). Many-to-Many Marketing is a general approach that describes, analyzes and
utilizes the network properties of marketing and recognizes that both suppliers and customers operate in complex
network contexts. Every function of a firm – operations management, human resources, logistics, finance, etc. –
represents a perspective on management. Therefore it is, for example, more relevant to talk about marketing-oriented
management rather than marketing management. The Viable System Approach (VSA) is a systems theory-based
application for management. It postulates that every business is a system, nested in a relational context where it is
looking for competitive profiles (viability) through interaction with other actors/stakeholders. Its theory proposes a new
representation of the behavioral approach to business and relational interactions with its context. In practice it shows in
the development and implementation of business models.
Developing Paradigm 3 through Naples Forum Publications
The Naples Forum is an effort to stimulate Paradigm 3 research, communicate it and speed up its progress. Within
the 3 Pillars lots of activities including extensive publishing takes place. Lusch and Vargo have been involved in over
50 articles and 20 book chapters, edited several Special Issues of journals, and spoken continuously at conferences,
universities and business firms around the world. Jim Spohrer and his colleagues, together with Forum participants
publish continuously on Service Science, including three recent books. Network and systems theory is increasingly
integrated with the two other pillars and is the lead theme for several authors, not least from Italian researchers, the
Nordic School and the IMP Group.
The Forum supports the efforts of the participants to publish by co-authoring with other participants and adopt
presented papers to articles in journals of their own choice and in special Forum issues. As a result of the 2009 Forum
three Special Issues with a total of 21 articles were published. The 2011 Forum spawned 19 articles in four Special
Issues of the Journal of Service Management, Service Science, Journal of Business, Market Management and Mercati e
Competitività. We are currently negotiating with journals for publication of the 2013 Forum articles.
PROGRAM
The Forum starts on Tuesday, June 18, 2013, with registration and a reception at 18:00. On Wednesday, June 19, the
Forum opens at 9:00 and ends on Friday, June 21, at 16:00. For details and continuous updates, see
www.naplesforumonservice.it
VENUE
L’Albergo della Regina Isabella, Piazza Santa Restituta, 1, Lacco Ameno – Ischia (Na), Italy.
CALL FOR PAPERS
We invite papers dealing with themes within one or several of the 3 Forum Pillars: S-D logic, service science, and
network/systems theory. We especially encourage submissions with an integrative perspective. The papers could be
theoretical and/or empirical and be based on qualitative and/or quantitative research. In order to submit a proposal
directions are given within the www.naplesforumonservice.it web page. Topics could include (but are not restricted to)
the following:
– Business models to manage networks and service systems
– Complexity theory and service research
– Customer centricity vs. a multi-party stakeholder orientation (balanced centricity)
– Experience, value-in-use and value-in-context
– ICT for service
– Integration and management of resources and capabilities
– Many-to-many marketing and markets as networks
– Markets and marketing
– Methodological challenges and issues in service research
– Networks, interaction and relationships
– Practice-theory in service research
– Service design
– Service innovation
– Service processes and engineering
– Service science projects in research and/or education
– Service systems and system thinking
– The development of Service-Dominant Logic
– The role of institutional logics in service research
– The Viable Systems Approach (VSA)
– Value co-creation and the changing role of suppliers and customers
– Value propositions
– Web 2.0 or Web 3.0, the semantic web

DEADLINES
Abstract submission: December 15, 2012
Notification of acceptance: January 20, 2013
Final paper submission (optional): April 30, 2013

prof. ing. Francesco Polese
Associate Professor of Business Management – DISTRA (
Dept. of Business Studies and Research)
professor of Health Management – Department of Medicine and Surgery
University of Salerno – Italy

New Books: Service Systems and Innovations in Business and Society Collection

Business Expert Press: The Service Systems and Innovations in Business and Society Collection

 

What are you reading these days related to service science, service systems, and service innovations?

 
1. Service Process Design for Value Co-Creation
Joy Field

The service process design landscape is changing, with many of the previous limitations disappearing on how and by whom services are delivered. Opportunities for new service design configurations are being enabled, to a large extent, by technology-driven service innovations, and tasks previously performed by the service provider may now be performed by either the customer or service provider. As a result, customers are taking a more active role in the service delivery process, not only through self-service but by providing information to the service provider to create a more personalized service experience.

2.   Lean Sigma Methods and Tools for Service Organizations: The Story of a Cruise Line Transformation
Jaideep Motwani, Rob Ptacek, and Richard Fleming

Both Six Sigma and Lean are widely recognized and implemented; and both have been successful in creating value within a variety of organizations, mostly in manufacturing concerns. Lean Sigma Methods and Tools for Service Organizations proposes to integrate the best practices from each of these philosophies and apply them to an organization whose overriding mission is to deliver superior service to its customers.

 

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