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The Productivity Paradox: Digital Abundance and Scarce Genius

Irving Wladawsky-Berger

Despite the relentless advances of digital technologies, productivity growth has been declining over the past decade. Some contend, - most prominently Northwestern University economist Robert Gordon , - that over the past few decades there’s been a fundamental decline in innovation and productivity. Translating technological advances into productivity gains requires major transformations in business processes, organization and culture, - and these take time.

The Current State of Open Innovation

Irving Wladawsky-Berger

In January, UC Berkeley professor Henry Chesbrough published Open Innovation Results : Going Beyond the Hype and Getting Down to Business, his fourth book on innovation in the last two decades. Chesbrough is adjunct professor and faculty director of the Garwood Center for Corporate Innovation at UC Berkeley’s Haas School of Business. He’s credited with coining the term open innovation in his 2003 book of the same title. Business model innovation.

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Are Innovation and R&D Yielding Decreasing Returns?

Irving Wladawsky-Berger

Given the pace of technological change, we tend to think of our age as the most innovative ever. These innovations, first developed in the late 19th and early 20th century, have long been transforming the lives of billions. Since the 1970s, US productivity and income growth have dipped sharply except for an Internet-driven productivity boost between1996 and 2004. Innovation may be hitting a wall of diminishing returns.

Cloud, Services and the Transformation of Production

Irving Wladawsky-Berger

Is it a return to centralized computing , driven by the rising complexities, management costs and energy inefficiencies of distributed systems? I’ve been particularly interested on the impact of cloud on services, not surprisingly given my interests in service science , - the application of science, technology and innovation to the world of services. What do we mean by the production of services ? Production includes both manufacturing and ICT-enabled services.

The MIT Inclusive Innovation Competition

Irving Wladawsky-Berger

As i ts website explains: “While digital technologies are rapidly transforming both business practices and societies and are integral to the innovation-driven economies of the future, they are also the core driver of the great economic paradox of our time. On one hand, productivity, wealth, and profits are each at record highs; on the other hand, the median worker in America is poorer than in 1997, and fewer people have jobs.

Are Innovation and R&D Yielding Decreasing Returns?

Irving Wladawsky-Berger

Given the pace of technological change, we tend to think of our age as the most innovative ever. These innovations, first developed in the late 19th and early 20th century, have long been transforming the lives of billions. Since the 1970s, US productivity and income growth have dipped sharply except for an Internet-driven productivity boost between1996 and 2004. Innovation may be hitting a wall of diminishing returns.

The “Recombinant” Nature of Digital Innovations

Irving Wladawsky-Berger

Killer-app is the name we give to those IT applications that turn out to be unexpectedly useful and help propel the success of a new product or service in the marketplace. Most everyone will agree, for example, that spreadsheet and word processing were the first killer-apps of the PC era, helping transform PCs into must-have business and personal productivity tools. Companies were thus able to engage in their core transactional activities in a much more productive and efficient way.

Preparing Students for an Increasingly Complex Business World

Irving Wladawsky-Berger

Are engineering and management schools adequately preparing students for our fast-changing, highly complex business world? Companies generally want MBA graduates with good social skills who are good at leadership, communications, and innovation. In its first phase, the study conducted face-to-face, in-depth conversations with 75 senior executives across companies in a broad range of industries, including automobile, banking consulting, consumer products and technology.

The Firm as a Large, Complex, Extended Family

Irving Wladawsky-Berger

He lived a long and extraordinarily productive life until the very end. A recent Economist article, One of the Giants , summed up Professor Coase life’s work in his own words: “I have made no innovations in high theory. In The Nature of the Firm paper, the young Professor Coase explained that, in principle, a firm should be able to find the cheapest, most productive goods and services by contracting them out in an efficient, open marketplace.

Data Science and the Changing Nature of Research and Innovation

Irving Wladawsky-Berger

Last month, the American Academy of Arts and Sciences (AAAS) released the results of a new study, ARISE II: Unleashing America’s Research & Innovation Enterprise. The study examined the current state of US research and innovation; looked at the role of its key players: academia, industry, and government; and proposed a set of recommendations to better address the highly complex challenges we face in the 21st century information economy.

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An Emerging Platform for Digital, Inclusive Innovation

Irving Wladawsky-Berger

The Internet became an incredible platform for innovation, enabling startups, large institutions, and everyone in between to quickly develop and bring to market many new digital products and services. Its reach and connectivity led to the creation of all kinds of innovative, digital applications. Together, these advances are giving rise to an Internet-based platform for digital, inclusive innovations. Inclusive innovation is a relatively new concept.

A Great Stagnation or a New Golden Age of Innovation?

Irving Wladawsky-Berger

These new ventures continue to attract more and more financial capital from investors, which in turn helps improve the quality and lowers the cost of the new disruptive technology and leads to many new innovative applications. But inevitably, the investments in new companies and applications turns into unsustainable speculation, leading to a financial bubble which eventually crashes. New paradigms emerge for guiding innovation and for determining winners and losers in the marketplace.

Social Learning, Complexity and the Enterprise

Harold Jarche

Our relationship with knowledge is changing as our work becomes more intangible and complex. Notice how most value in today’s marketplace is intangible, with Google’s multi- billion dollar valuation an example of value in non-tangible processes that could be deflated with the development of a better search algorithm. PDL – Personal Directed Learning: from Clockwork & Predictable to Complexity & Surprising. Complexity: the new normal. Complexity: wirearchy.

[liveblog][act-tiac] A federal portal in the age of search?

David Weinberger

“In a world where everyone can search and has apps, is a web portal relevant?,” Now people arrive through search. USA.gov is a platform that offers a full suite of bilingual products, built around a single structured API: information, contacts, social media, etc. People are surprised when it’s complex. Someone has a general idea, but not informed enough to search. Sarah Crane , Dir., Federal Citizen Information Center, GSA.,

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The Social Network Is the Computer

Irving Wladawsky-Berger

Our increasingly complex social interactions have been the critical factor in the exponential increase of human cranial capacity over the past few million years. “But today something is different.

Innovating our way out of the industrial era

Harold Jarche

I have frequently said that simple and complicated work is getting automated and outsourced and that the real value in the networked enterprise is in complex (creative) work. These are complex or arcane tasks being done by unique individuals. The good news is that almost every person has the capacity to do more complex and creative work. However, we have an infinite demand for creative products and services. complexity Technology Work

Blockchain - the Networked Ecosystem is the Business

Irving Wladawsky-Berger

Based on the analysis of over 25 blockchain networks in various stages of production across multiple industries and geographies, the report recommends that a company’s blockchain journey should evolve along three distinct stages: in search of value, - establishing a minimum value ecosystem; getting to scale - creating value for an overall industry; and designing for new markets, - creating entirely new markets and business models.

A Novel Method for Measuring the Value of Free Digital Services

Irving Wladawsky-Berger

Gross domestic product (GDP) is the basic measure of a country’s overall economic output, based on the market value of all the goods and services the country produces. GDP is essentially a measure of production. While suitable when economies were dominated by the production of physical goods, GDP does not adequately capture the growing share of services and increasingly complex solutions that characterize advanced economies.

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Despite Their Huge Upside Potential, Why Do Most Platforms Fail?

Irving Wladawsky-Berger

The book offer a simple definition. “Platforms, in general, connect individuals and organizations for a common purpose or to share a common resource.” A platform strategy differs from a product strategy in that it relies on an external ecosystem to generate complementary innovations and/or business transactions. The effect is much greater potential for innovation and growth than a single product-oriented firm can generate alone. years, innovation ones 5.0

Design Thinking and the Workplace Experience

Irving Wladawsky-Berger

Design has long played a major role in product innovation. But in the last few years, a shift has been underway bringing design to the very core of the business. “ The Evolution of Design Thinking : It’s no longer just for products. The article views design thinking as “a human-centered approach to innovation that puts the observation and discovery of often highly nuanced, even tacit, human needs right at the forefront of the innovation process.”

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From “Buy What We Have” to “Connected Customer Strategies”

Irving Wladawsky-Berger

While there are many ways a company can leverage digital technologies to differentiate itself from competitors, two are particularly prominent: streamline operations to develop higher quality products at competitive prices, and provide a superior, cost-effective customer experience through digital channels. Customers know what product or service they want, and want to get what they ordered as quickly and seamlessly as possible with minimal frictions and hassles.

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Is the Digital Revolution At Last Shaking Up Banking?

Irving Wladawsky-Berger

First comes the use of IT to improve the productivity and quality of back- and front-end processes. Innovative financial services from FinTech startups are also adding to the pressure felt by banks. “The biggest four American banks are spending a total of over $25bn a year on perfecting better customer applications and learning to mine data more cleverly. Digital transformations have generally followed three distinct stages.

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Beyond Machine Learning: Capturing Cause-and-Effect Relationships

Irving Wladawsky-Berger

Similarly, searching for Earth-size extrasolar planets is based on detecting the faint changes in a star’s light caused by a potential planet quickly passing by. Not only does the evolution of these AI platforms and suites of AI services enable a wider range of developers to deliver AI-enhanced solutions, but it also delivers much higher developer productivity.”. Artificial intelligence is rapidly becoming one of the most important technologies of our era.

Is Design Thinking the “New Liberal Arts”?

Irving Wladawsky-Berger

Design thinking is now being applied to abstract entities, - e.g. systems, services, information and organizations, - as well as to devise strategies, manage change and solve complex problems. The application of design thinking beyond products isn’t new. Its mission statement states that “Olin College prepares students to become exemplary engineering innovators who recognize needs, design solutions and engage in creative enterprises for the good of the world.”.

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Social Physics - Reinventing Analytics to Better Predict Human Behaviors

Irving Wladawsky-Berger

But, at the same time, mutations and innovations will vary among different groups, with natural selection favoring those human groups better able to adapt to changing conditions. They’ve enabled the construction of AI algorithms that can be trained with lots and lots of sample inputs, which are subsequently applied to complex problems like language translation, natural language processing, and playing championship-level Go. who is likely to try this newly-launched product?;

Lean Principles in the Digital Economy

Irving Wladawsky-Berger

Lean principles is the name given to a group of production techniques developed by Japanese manufacturing companies around the 1970s-1980s to maximize customer value while reducing wasteful resource. Lean production methods have also been described as aiming “to combine the flexibility and quality of craftsmanship with the low costs of mass production.” The key challenge was to manage the growing means of production in the most efficient way possible.

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The Evolution of the Firm

Irving Wladawsky-Berger

He explained that, in principle, a firm should be able to find the cheapest, most productive goods and services by contracting them out in an efficient, open marketplace. Transaction costs are incurred in obtaining goods and services outside the firm, such as searching for the right people, negotiating a contract, coordinating the work, managing intellectual property and so on. Among the key such other factors is the ability to address complex technical and management problems.

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The Evolution of the Internet of Very Smart Things

Irving Wladawsky-Berger

These systems were optimized for simplicity and flexibility, and their graphical user interfaces led to many innovative applications, including the new web-based applications in the 1990s. These factors eventually led to significantly increased management complexities and costs. Connectivity and intelligence are a means to a better product and experience, not an end.” .

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Technology and the Future of Media

Irving Wladawsky-Berger

Internet users already spend 20–30% of their time online, mainly engaging with media content… Globalization, deregulation, technological innovation and the convergence of previously separate industries such as media, entertainment, information, and consumer electronics, have created a somewhat turbulent media landscape.”. Production: the bundling of different content into a final market-ready product, - a newspaper, TV schedule, cable package or DJ’s playlist.

AI - the Creation of a Human-Centric Engineering Discipline

Irving Wladawsky-Berger

Machine and deep learning are the latest examples of tools like the World Wide Web, search and analytics that are helping us cope with and take advantage of the huge amounts of information all around us. But, over time, engineering advances have led to foundational scientific principles, development practices and building blocks that significantly increased their safety and productivity. AI is rapidly becoming one of the most important technologies of our era.

The Digital Transformation of the Customer Experience

Irving Wladawsky-Berger

Moreover, as companies struggle to differentiate their increasingly commoditized products, they are looking for new business opportunities by offering all kinds of services around their products, as well as all sorts of innovative products as-a-service. High quality and competitive costs are the key objectives of good products. Customers are taking advantage of all the information they can now access to search for the best possible values. .

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Blockchains: the Promise of More Frictionless, Trusted Economies

Irving Wladawsky-Berger

Professor Coase explained that, in principle, a firm should be able to find the cheapest, most productive, highest quality goods and services by contracting them out in an efficient, open marketplace. Transaction costs are a kind of friction incurred in obtaining goods and services outside the firm, such as searching for the right supply chain partners, establishing a trusted relationship, negotiating a contract, coordinating the work, managing intellectual property and so on.

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Where is Technology Taking the Economy

Irving Wladawsky-Berger

Powerful computers and intelligent algorithms are enabling us to make sense of all that data by searching for patterns and doing something with the results, including computer vision, natural-language processing, language translation, face recognition and digital assistants. Productivity (GDP per worker) falls too.”. I recently read Where is Technology Taking the Economy? , an article in McKinsey Quarterly by W.

How Will AI Likely Impact How We Work, Live and Play?

Irving Wladawsky-Berger

Perceptual algorithms for functions such as image labeling, and 3D object recognition, while common at AI conferences, are still only a few years into development as products.”. But each time those fears arose in the past, technology innovations ended up creating more jobs than they destroyed, causing the majority of economists to confidently wave away such automation anxieties.

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The Future of Financial Services

Irving Wladawsky-Berger

By analyzing the earliest recorded transactions, researchers believe that writing evolved in ancient Mesopotamia thousands of years ago, as an innovation to keep track of financial records. Financial services (FS) was one of the first industries to embrace ICT, automating their back-office and branch operations and developing innovations like credit cards and ATMs. Periods of rapid ICT and FS innovation are followed by lengthy periods of stability and consolidation.

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The Rise of the On-Demand Economy

Irving Wladawsky-Berger

Complex tasks, such as programming a computer or writing a legal brief, can now be divided into their component parts - and subcontracted to specialists around the world.” . Karl Marx said that the world would be divided into people who owned the means of production - the idle rich - and people who worked for them. These firms aim to efficiently bring together consumers and suppliers of goods and services with their highly scalable platforms and innovative applications.

Trust and the On-Demand Economy

Irving Wladawsky-Berger

In 1937, Coase published a seminal paper, The Nature of the Firm , in which he explained that, in principle, a firm should be able to find the cheapest, most productive goods and services by contracting them out in an efficient, open marketplace. Transaction costs are incurred in obtaining goods and services outside the firm, such as searching for the right people, negotiating a contract, coordinating the work, managing intellectual property and so on.

Becoming a Data-Driven Business: Challenges and Opportunities

Irving Wladawsky-Berger

It’s very hard to anticipate the consequences of disruptive innovations. I t’s often been said that truly transformative innovations are overhyped in the short term but under-hyped in the long term. It took several decades for electric appliances, the assembly line and mass production to emerge and help create whole new industries. The dot-com era was famous for its many innovations, but also for its hype.

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Reflections on the Future of TV

Irving Wladawsky-Berger

In addition, I’ve been a member of the advisory board of USC’s Annenberg Innovation Lab (AIL) since it was founded in 2010 to study the impact of technology and cultural changes on the media industries. . The TV industry is being massively restructured as its companies keep searching for viable business models. What happens when the intensity of fan response may become as important as the quantity of viewers in shaping which programs remain in production? .

The Emerging Data Economy

Irving Wladawsky-Berger

Data is now being generated by just about everything and everybody around us, including the growing volume of online and offline transactions, web searches, social media interactions, billions of smart mobile devices and 10s of billions of smart IoT sensors. Artificial Intelligence Blockchain and Identity Complex Systems Data Science and Big Data Economic Issues Innovation Management and Leadership Political Issues Smart Systems Technology and Strategy

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The MIT Second Machine Age Conference

Irving Wladawsky-Berger

The second age machines are now enhancing our cognitive powers, giving us the ability to process vast amounts of information and make ever more complex decisions. Their vision and fine motor control has significantly advanced, like Baxter , the interactive production robot from Rethink Robotics. And question-answering systems like IBM’s Watson are enabling us to solve increasingly complex problems. . “We’re

The Continuing, Transformative Impact of IT

Irving Wladawsky-Berger

Disruptive innovations take time to play out. Twenty years into the Internet revolution, businesses and consumers have come to expect that information is a Google search away, friends and associates are always available on social networking sites, and goods and services (including public goods such as education and government services) can be had instantly from an online vendor anywhere in the world at any time of the day.”.

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The Nature of the Firm in the Digital Economy

Irving Wladawsky-Berger

In early July I participated in the 2013 Roundtable on Institutional Innovation sponsored by the Aspen Institute’s Communications and Society Program. The Center’s co-leaders John Hagel and John Seely Brown , recently published Institutional Innovation , an article on the evolution of organizations. This individual freedom leads to innovation, specialization, economic fragmentation and the formation of lots of companies of all sorts.