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Icons of Progress

The Invention of Service Science

IBM100 The Invention of Service Science iconic mark

The idea that there ought to be a new scientific discipline called service science had its genesis in a phone conversation in September of 2004. Jim Spohrer, who was starting up the IBM ® Research Service Research department, was on the line with Henry Chesbrough, a professor of business and innovation at the University of California at Berkeley. Spohrer complained to Chesbrough that he was having trouble finding job candidates who had the right mix of knowledge, including computer science, engineering, management and social science.

Chesbrough pointed out that in the 1940s and ’50s IBM had boosted the development of computer science as a discipline by donating computers to universities and then helping them create curricula for teaching students how to use the machines. “IBM started computer science. You should start service science,” Chesbrough told Spohrer. The two men were so excited at the prospect that they immediately dialed in Paul Horn, then director of IBM Research, who blessed the idea.

Today, more than 450 universities worldwide offer some sort of service science program—typically a blending of courses from their computer science, social science and business management departments. The schools range from University of California at Berkeley and Carnegie-Mellon University in the United States, to Karlsruhe Institute of Technology in Germany, Aalto University in Finland, and National Cheng Chi University in Taiwan. IBM provides financial grants and assigns researchers to help universities set up their programs. The company coined the term service science management and engineering, and SSME is now a hot topic in books, articles and conferences worldwide.

Why such an avid interest in service science? The idea has its intellectual roots in Harvard University sociologist Daniel Bell’s 1973 book, The Coming of Post-Industrial Society. Bell predicted that over the next decades knowledge-based services would overtake manufacturing as the growth engine for Western societies, and services in general would swamp manufacturing as a source of employment. By the year 2000, Bell’s predictions had come true. Eighty percent of non-farm employment in the United States was in service-producing industries. At the same time, the services business accounted for 37 percent of IBM’s revenues that year and was on a rapid rise. “There was a huge shift from manufacturing to services,” says Spohrer. “Something big was happening in the world, and we had to deal with it.”

The rise of services had to be dealt with, in part, because problems can emerge when services become such a large part of the economy. Services aren’t nearly as efficient as manufacturing at this point in their evolution, so as services grow and manufacturing declines, the productivity and vitality of a nation, and even the world economy, can be threatened. According to an economic theory called Baumol’s disease, the high cost of services has the potential to choke off economic growth. So services have to become more efficient and productive. One way to help achieve that goal was by creating a service science discipline, which addresses the problem head-on by using science, technology and business acumen to improve the productivity, quality and innovation in services. “We have no choice but to make services more science- and technology-based if we are to improve the value delivered from the services sector. This is true of not just IT services, but especially of other services such as health, education and government,” warns Robert Morris, vice president for services research at IBM Research.

IBM has made great strides, internally. By creating reusable software assets, improving business processes and automating elements of services with software, the company improved the pre-tax profit margins for its services business from 6.7 percent in 2005, to 14.1 percent in 2009.

Out in the world, the pipeline of people with service science training is starting to expand from a trickle to a steady flow. Inspired by IBM, faculty members at Karlsruhe Institute of Technology (KIT) created the Karlsruhe Service Research Institute (KSRI) in 2008 to conduct research and offer specialized service science modules for undergraduate and graduate students within the school’s industrial engineering, information management and technical economics degree programs. The goal is to create “T-shaped” people who have deep knowledge in one or two areas of study, and some level of expertise and communications skills in related areas. So far, about 70 students are participating. Now KIT is hoping to create a PhD program in service science. “Industry and society need to understand the services sector, so it’s important to install these programs,” says Professor Christof Weinhardt, co-founder of KSRI.

Compared to the mammoth footprint of computer science, these are still early days for service science. Berkeley’s Chesbrough says he’s disappointed that business schools, in particular, haven’t done more to combine their programs with those of engineering schools. “We need to improve and accelerate research into the business side of service science,” he says. “We really need a melding of the two.” Still, the discipline has gotten off the ground faster than its creators had expected. Some day, judging by that quick start, there may be hundreds or even thousands of service science degree programs dotting the global academic landscape.


Selected team members who contributed to this Icon of Progress:

  • Jim Spohrer Co-Founder, Service Research Group, and Director, Almaden Service Research
  • Robert Morris Vice President, Services Research and Global Labs
  • Paul Maglio Senior Manager, Service Systems Research