Thinking of research as service

Matti_Kokkala

Those who fund want to get more from research. What if we start thinking about the funders of our research as customers? And not as just any customer, but customers of a service business? A logical consequence of the change of mindset would be for research entities in general to apply the understanding and methods of those who have been carrying out research specifically on services.

The research community especially in Finland lives in challenging times. After several decades of increased R&D funding, the last few years have seen cuts both to public and private R&D funding. The justification for these cuts has all too often been the claim that we as a research community have not produced enough benefit to society or to industry. From the research side there is a tendency to see value in research in terms of ever increasing opportunities for knowledge, that is, further research is seen as a key output.

What if we change our mindset and explicitly treat research as a service for specific customers or to society at large? This is not a new way of thinking as, for example, within the European Commission, research has been mentioned as a typical Knowledge Intensive Service Business. In the NACE -classification of economic activities, research is also included as a business service. With this mindset it is relevant to start applying what scholars have developed in regard to services in recent years.

One of the hot topics in service research for more than a decade has been the concept of Service-Dominant Logic, originally presented by Stephen Vargo and Robert Lusch in their seminal study in 2004 (instead of the Goods-Dominant Logic typical of product markets). Although work in the study was based on earlier work by several scholars, the article was a real breakthrough and launched an exceptionally strong interest in studying what service is really about. The S-D Logic concept has been further developed by hundreds of researchers and already more than 10 000 papers have made reference to that seminal work. We at VTT had the pleasure of having Stephen Vargo as our Visiting Professor in 2012. A useful summary of the developments is the follow-up study published by Vargo and Lusch this year (2016).

According to Vargo and Lush (2004), the S-D Logic can be characterized as aiming to:

  1. Identify or develop core competences, the fundamental knowledge and skills of an economic entity that represent potential competitive advantage.
  2. Identify other entities (potential customers) that could benefit from these competences.
  3. Cultivate relationships that involve the customers in developing customized, competitively compelling value propositions to meet specific needs.
  4. Gauge marketplace feedback by analyzing financial performance from exchange to learn how to improve the firm’s offering to customers and improve firm performance.

These are all highly valid to a typical research organization. A research group or thematic area can often be taken as an economic entity (irrespective of accounting practices), since the continuation of the work depends on its capability to draw new funding. Even public funding organizations seek societal or economic benefit (cf. in Finland, these discussions led to the establishment of the STN – Strategic Research Council). When writing a research proposal one needs to understand not only the call text, but also the reasoning behind the call. In the case of contracted industrial research, the joint elaboration of the offering with the customer is a must. An ongoing assessment of the financial health of the research group is also needed, as no organization can afford in the long term any entity that is continuously spending more than it is earning.

customer

In the Service-Dominant Logic, the customer is the co-creator of value. One of the foundational premises of the S-D Logic states that “value is co-created by multiple actors, always including the beneficiary”. A research project, by definition, provides a unique solution to the customer or other beneficiaries. The value of the results depends on how they will be used. In basic research, the beneficiary is the relevant research community. There is no value in the work if there is no impact on the work of other researchers. A research project aiming to contribute to the solution of a societal challenge is of value only if it will be used to solve the challenge. A research project is relevant to business only if the results are used by the stakeholders in product, process or service development. Pre-determined research services are also needed, because specified operations like measurements, tests, interviews etc. are also important for, e.g., product development and performance confirmation.

The conclusion from the discussions referred to above is that research can and should be treated more explicitly as service to beneficiaries, that is, to other researchers, to industry, and to society at large.

In practice the change of mindset means that we as researchers need to increase our understanding of the mechanisms of government decision-making as well as the business logic of various industrial ecosystems. Only by properly fitting emerging knowledge and technologies to the realities of existing business and government ecosystems can we get permission to address the challenges, which help our sponsors to create value in their operations. The typical jointly funded public projects need to be seen as service to society or to business ecosystems. The EU, Tekes etc. are not funding research only to support researchers in the research performing organizations. Funding programs exist to have a positive impact on industry and society at large.

Matti Kokkala

Matti Kokkala is currently Senior Advisor, Smart Cities at CTO’s Office of VTT. From 2006 to 2013 he was Vice President, Strategic Research in charge of e.g. VTT’s publicly funded research portfolio on service business and services.

Twitter: @MattiKokkala

References:

Vargo, S. L. & Lusch, R. F. 2004. Evolving to a new dominant logic for marketing. Journal of Marketing, 68(January), 1–17.

Vargo, S. L. & Lusch, R. F. 2016. Institutions and axioms: an extension and update of service-dominant logic. J. of the Acad. Mark. Sci., 44, 5–23.

Smart City: local but networked, distributed but integrated

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The concept smart city pops up frequently in the context of urban development. The concept definitely has a positive flavour, but I have found myself thinking, what does it actually mean?

There is no unique definition for a smart city. The interpretations and definitions used by different interest groups, stakeholders or regions vary. Often one gets an impression that a smart city is the same as a digital city, sometimes its meaning is close to that of a sustainable city.

It is a challenging term, because who would like his contribution to the development not be called smart, i.e. there is no such thing as a dumb city. While most of human activities take place in cities you may see almost anything included within the smart city concept. So, why should we use a special term if it includes everything in a city?

Towards distributed smart solutions

The basis of developing systems has always been to move towards an optimum defined by multiple criteria, often economic aspects being among the core criteria. Traditionally an optimum has been reached by centralized solutions. Economy of scale has been achieved by systems with a distinctive point of control. For example, power grids have been built around large power plants. Public transport systems have been based on somebody deciding the schedules and routes on behalf of others.

Retail shopping has moved to large shopping centres. Even the governance in a society has meant a powerful central administration making decisions on behalf of the citizens.

The development of information and communication technology ICT has enabled search for new kinds of optima. The outcome of implementation processes in various systems is often regarded as ‘smart’.

Concerning energy, for example, distributed local production is feasible up to the extreme that every building may become a power source. However, a system of distributed production is better than the old centralized system only if the energy network is managed properly. The transition to smart grids has only been possible thanks to advanced ICT.

New on-demand service concepts are emerging in public transport, which is still based to large extent to predetermined schedules and routes. Like in the case of energy, if you produce more than you need, you may offer your capacity to be used by others. Without advanced ICT the linking of service providers and users would not be possible.

In retail industry the rapidly growing shopping over internet has created a need to rethink the urban logistics. The role of shopping centres and department stores is undergoing a significant change. At the same time the end delivery to the individual customers is seeking new forms. Increased efficiency and better response to customer needs is possible only by use of advance ICT.

In order to make use of public services you had to go to the city centre or at least to the local centre in the suburb. Due to the changes in relative costs of operations in the societies, the development has unfortunately meant that the distances to the service points have gradually increased. Thanks to ICT, you are more and more able to use the services at your home or even when travelling. The savings for the service provider are evident.

ICT also enables citizens to participate in decision making much more than before. While tools exist to enable receiving of information, it is much more difficult for the authorities to keep their work behind closed doors. Citizens are now able to interact with both with the officials and with the elected representatives more than ever before. Despite of the challenge of digital divide, the development of ICT has altogether meant a huge increase in the power of citizens.

Act local, be networked

All the examples above have meant that the meaning of geographical location has changed. You can act locally but at the same time use resources in places you do not even know. Administrative borders can no more be at the same to optimal borders for operations. Without integrating the resources and operations the world with distributed resources would be like the societies centuries ago – and nobody wants that.

In the old systems, data was gathered into a central location, where it was then, often after a significant delay, analyzed. The conclusions drawn were then transmitted back along the chain as instructions. In the current distributed systems data can be gathered and analyzed anywhere. This allows a much larger set of input data and much wider resources for assessment and conclusions. The central decision maker is not always needed at all. Open data – just make the data available and somebody will for his own interest analyse it – is essential in this process.

The essence of being smart in the modern society is in acting locally but being networked outside of your own geographical location. The technological systems can only be managed if they are properly integrated. ICT is the enabler which, when properly used for networking and integration, provides social, environmental, and economic benefits for all.

Cities all over the world see this as an opportunity towards better quality of life. Therefore, the smart city agendas will have a central place in urban development projects. While those projects are always huge investments, they also provide lucrative business opportunities for technology providers. No wonder that practically all largest technology providers have their own smart city agendas.

Matti Kokkala

Professor, Senior Advisor, Smart Cities

Smart City: paikallinen mutta verkottunut, hajautettu mutta yhteenpelaava

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Kaupunkikehityksestä puhuttaessa ei voi välttyä törmäämästä käsitteeseen smart city.  Jätän termin tarkoituksella kääntämättä suomeksi, koska mahdolliset käännökset, kuten älykäs kaupunki, älykaupunki, fiksu kaupunki ja nokkela kaupunki, tuovat kukin oman vivahteensa eivätkä ne vastaa  kansainvälistä smart city -käsitettä.

Adjektiivi smart tekee termin hankalaksi, sillä kukapa haluaisi, että oma tekeminen olisi vähemmän smart. Kun suurin osa ihmisten tekemisistä tapahtuu kaupungeissa, termin smart city alle on eri yhteyksissä selitetty kuuluvan melkein mitä tahansa hyvää tarkoittavaa toimintaa. Miksi siis tarvittaisiin erityistä termiä, jonka piiriin kaikki kaupunkien tekeminen sisältyy?

Usein smart city -termiä käytettäessä saa mielikuvan, että kyse olisi teknologiasta ja nimenomaan tieto- ja viestintäteknologiasta. Kuitenkin smart tarkoittaa paljon enemmän.  Itse asiassa vastaani ei ole tullut yhtäkään tahoa tai henkilöä, joille smart citystä puhuttaessa teknologia olisi itseisarvo, vaikka sen rooli paremman toimintaympäristön ja parempien palveluiden mahdollistajana onkin aina ymmärretty.

Smart city on käsitteenä elänyt jo kymmenkunta vuotta ja näyttää siltä, että se on tullut jäädäkseen. Käsitteellä täytyy siten olla syvempikin merkitys.

Kohti hajautettuja ratkaisuja

Perinteisesti yhteiskunnan järjestelmien optimi sen eri merkityksissä on saavutettu erilaisilla keskitetyillä ratkaisuilla. Esimerkiksi energian tuotanto ja jakelu ovat perustuneet suuriin voimaloihin. Julkinen liikenne puolestaan on perustunut kiinteisiin reitteihin, aikatauluihin ja vain julkiseen liikenteeseen varattuun ajoneuvokalustoon. Vähittäiskauppa on hakenut tehokkuutta suurten ostokeskusten ja tavaratalojen avulla, ja julkinen hallinto ja päätöksenteko julkisista palveluista on luovutettu valittujen edustajien ja virkamiesten luoman keskushallinnon varaan.

Tieto- ja viestintätekniikan kehitys on mahdollistanut tehokkuuden ja vaikuttavuuden hakemisen aivan uudella tavalla. Hajautettu energiantuotanto on mahdollista, kun paikallinen, jopa rakennuskohtainen, energiantuotanto voidaan tuoda hallitusti osaksi koko energiajärjestelmää.

Liikenne muuttuu resurssi­tehokkaammaksi ja paremmin tarvetta vastaavaksi, kun kuljetuspalvelut saadaan reagoimaan ketterämmin todelliseen tarpeeseen esimerkiksi kutsuperustaisen liikenteen tai monikäyttöisen ajoneuvo­kaluston avulla.

Vähittäiskaupassa nopeasti kasvanut ostosten tekeminen internetin kautta on asettanut ostokeskukset ja tavaratalot aivan uuteen tilanteeseen. Kaivataan uusia tehokkaita ja asiakastarvetta vastaavia tapoja jaella ostokset loppukäyttäjille.

Julkinen hallinto ja julkiset palvelut ovat tiedonkulun helpottumisen vuoksi aivan uudella tavalla kansalaisten seurannan alla. Valtuutetut ja viranhaltijat eivät enää julkisen paineen vuoksi pysty toimimaan suljettujen ovien takana, vaan kansalaiset haluavat ja pystyvät vaikuttamaan päätöksentekoon asioiden valmistelusta toteutukseen.

Toimi paikallisesti, verkotu kansainvälisesti

Edellä olevat esimerkit tarkoittavat, että fyysisen paikan merkitys on muuttunut. Toiminta voi näkyä paikallisena, mutta suuri osa tekemisestä voi tapahtua melkeinpä missä tahansa maailmassa.  Muodolliset yhteiskunnan hallinnon rajat menettävät yhä useammin merkityksenä, maantieteellisiä rajoja ei ole välttämättä edes olemassa. Kuitenkin ilman resurssien hallittua yhteensovittamista hajautetut toimintamallit johtaisivat sekaannukseen, mitä kukaan ei tavoittele.

Perinteisesti järjestelmien toiminnasta on aina kerätty tietoa keskitetysti ja sitä on myös analysoitu ja hyödynnetty keskitetysti. Johtopäätöksiä on sitten vyörytetty päätöksentekoketjuja pitkin eteenpäin.  Hajautettujen järjestelmien maailmassa myös tietoa voidaan kerätä ja analysoida hajautetusti. Tämä mahdollistaa paljon suuremman tietomäärän analysoinnin paljon suuremmilla resursseilla. Avoin tieto – periaatteella aseta tieto saataville ja joku muu voi hyödyntää sitä – on olennainen osa uutta toimintatapaa.

Ollakseen nyky-yhteiskunnassa smart tulee toimia paikallisesti, mutta samanaikaisesti globaalisti verkottuneesti.  Hajautettuja teknisiä järjestelmiä voidaan hyödyntää hallitusti vain, jos ne pelaavat yhteen tarvetta vastaavasti. Tieto- ja viestintätekniikka on apuväline, joka mahdollistaa sekä ihmisten verkottumisen että teknisten järjestelmien yhteen kytkemisen niin, että tuloksena on sosiaalista, taloudellista ja ekologista hyötyä yhteiskunnassa.

Kaupungit kaikkialla maailmassa näkevät tämän suurena mahdollisuutena paremman toimintaympäristön ja elämänlaadun tuottamiseksi.  Smart city -ohjelmilla tulee siten olemaan keskeinen merkitys kaupunkien kehittämisessä jatkossakin. Koska kaupunkien kehityshankkeet ovat aina suuria investointeja, ne tarjoavat myös teknologioiden toimittajille merkittäviä liiketoimintamahdollisuuksia. Siksi on luonnollista, että myös maailman suurimmilla teknologiayrityksillä on suuria ja näkyviä smart city -ohjelmia.

Matti Kokkala

Professori, Senior Advisor, Smart Cities