Big Blue pushes a new research discipline called services science

Money, money everywhere for R&D, it seems-hundreds of billions, in fact, and more of it every year-but barely a trickle goes to services research. Yet,
the services sector now accounts for between 60 percent and 80 percent of developed countries' gross domestic product and worker wages. Does innovation improve only the proverbial widget, or can services firms leverage R&D to spur innovations and increase productivity?

IBM Corp. is launching a bold new initiative to find out.

Productivity in services has generally lagged behind that in the manufacturing and agriculture sectors. Still, the consensus is that plenty of services, particularly those that involve business consulting and IT, are ripe for productivity improvements. But is formal research the best way to achieve them? Henry Chesbrough, director of the Center for Open Innovation at the University of California at Berkeley's Haas School of Business, says that for technology to make a difference, the business process must first be analyzed and redesigned. Services firms that changed the business to exploit the technology were able to gain a competitive advantage over those that focused only on implementing the technology. Chesbrough insists that formal research in services is a necessary complement to technology research.

IBM has been aggressively promoting a new academic discipline it calls services science, management, and engineering (SSME). Today, IBM is
encouraging a group of universities-including North Carolina State University, Pennsylvania State University, Rensselaer Polytechnic Institute,
and the University of California at Berkeley-to create SSME programs.

Pumping out graduates schooled in services science could form part of the United States' or Europe's competitive advantage in the coming years, Horn
says. With the migration of manufacturing and R&D to countries with lower labor costs, aspiring engineers studying in developed countries may be able
to carve out a lucrative career in services science by applying their skills to a different set of problems and working on more multidisciplinary teams.

The U.S. Congress is listening. The National Competitiveness Investment Act, introduced in September by a whopping 38 senators from both political
parties, includes a section supporting government initiatives in services science. The legislation is a direct result of high-profile reports issued by business and academic leaders who have expressed concern about growing competition in high technology from India and China. The bill, which includes such wide-ranging policy initiatives as increases in physical-sciences and engineering research and a buildup in the number of K-12 science teachers, also calls for the federal government to develop strategies to leverage services science to improve U.S. competitiveness.

All of this begs a simple question: What is services science? The legislation defines it vaguely as "curricula, training, and research programs that are designed to teach individuals to apply scientific, engineering, and management disciplines that integrate elements of computer science, operations research, industrial engineering, business strategy, management sciences, and social and legal sciences, in order to encourage innovation in how organizations create value for customers and shareholders that could not be achieved through such disciplines working in isolation."
That's not a definition, just a laundry list.

But services research is not only social science-oriented. Horn says that IBM's research in business consulting "tends to be much more mathematical,"
tailored to specific industries and involving supply-chain optimization, logistics optimization, data management, and data analytics. All of those,
he says, are "aimed at helping our clients improve their business processes and their approaches to markets."