This is the lecture that I gave at LSE for the 15th Social Studies of ICT.

1. center for design + innovation
cD+i
digital innovation,
reversed semiotics and
generative economics
Youngjin Yoo
Harry A. Cochran Professor in MIS
Temple University
WBS Distinguished Research Environment Professor
Warwick Business School

2. “Uber, the world’s largest taxi
company, owns no vehicles.
Facebook, the world’s most popular
media owner, creates no content.
Alibaba, the most valuable retailer,
has no inventory. And Airbnb, the
world’s largest accommodation
provider, owns no real estate.
Something interesting is
happening.” (Tech Crunch, March
3, 2015)

3. center for design + innovation
cD+i

4. © copyright, youngjin yoocenter for design + innovation
cD+i
2.0

5. what does a firm do?

6. Center for Design
cD+iTransforming ideas into actions
and Innovation

7. Center for Design
cD+iTransforming ideas into actions
and Innovation

8. Center for Design
cD+iTransforming ideas into actions
and Innovation

9. domestication of
materials

10. marriage of
form and function

11. to render service

12. designer’s struggle
with material

13. value is always
co-created

14. goods are carriers of
resources

15. all goods are
service delivery
platforms

16. center for design + innovation
cD+i
three logics of
economics

17. © copyright, youngjin yoocenter for design + innovation
cD+i
2.1

18. center for design + innovation
cD+i
industrial
economics

19. the age of
physical machine

20. center for design + innovation
cD+i
automation

21. center for design + innovation
cD+i
capital intensive
asset

22. center for design + innovation
cD+i
managerial challenge
maximizing asset
utilization

23. center for design + innovation
cD+i
vertical integration
diversification

24. center for design + innovation
cD+i
managerial logic
economy of size and scale

25. center for design + innovation
cD+i
organizational forms
m-form hierarchy

26. center for design + innovation
cD+i
management tools
scientific management

27. © copyright, youngjin yoocenter for design + innovation
cD+i
2.2

28. information
economics

29. the age of
smart machine

30. information as
by-product
(production, distribution, and use)

31. center for design + innovation
cD+i
managerial challenge
complexity
information overload

32. center for design + innovation
cD+i
management logic
modularization (design rules)
horizontal coordination

33. center for design + innovation
cD+i
organizational forms
network of distributed org.

34. center for design + innovation
cD+i
management tools
outsourcing
virtualization

35. © copyright, youngjin yoocenter for design + innovation
cD+i
2.3

36. generative
economics

37. © copyright, youngjin yoocenter for design + innovation
cD+i
the age of
generative machine

38. center for design + innovation
cD+i
digital technology

39. center for design + innovation
cD+i
separation of
form & function
(universal machine of von Neumann computing architecture)

40. center for design + innovation
cD+i
separation of
contents & media
(universal network of Claude Shannon)

41. center for design + innovation
cD+i
walled garden of products
hardware
network+,++
distribu1on
contents
so3ware
TV phone book music
hardware
network+,++
distribu1on
contents
so3ware
hardware
network+,++
distribu1on
contents
so3ware
hardware
network+,++
distribu1on
contents
so3ware

42. center for design + innovation
cD+i
re-configuration of
new products
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents
network -
distribution
hardware
software
contents

43. highly evolutionary
products that produce
user-generated trace data

44. center for design + innovation
cD+i
technology constantly
evolves beyond the
original design

45. center for design + innovation
cD+i
managerial challenge
deconstruction of products
reconfiguration of value system
convergence

46. center for design + innovation
cD+i
managerial logic
mutation
recombination
open innovation

47. center for design + innovation
cD+i
organizational forms
ecosystem of open
platform

48. 3.0

49. reversed semiotics

50. reference vs referent

51. information as
representation
of the real

52. center for design + innovation
cD+i
information as the
genetic materials
of the real

53. 4 types of
reversed semiotics

54. center for design + innovation
cD+i
which one is real?

55. center for design + innovation
cD+i
which one is real?

56. center for design + innovation
cD+i
which one is real?

57. center for design + innovation
cD+i
which one is real?

58. center for design + innovation
cD+i
physical goods as avatar
of “real” digital products

59. flipping the value
economic proposition

60. “Simulation is no long that of a territory, a
referential being or a substance. It is the
generation by models of a real without
origin or reality”
“the age of simulation thus begins with a
liquidation of all referential”
“It is no longer a question of imitation, nor
of reduplication, nor even of parody. It is
rather a question of substituting signs of
the real for the real itself.”
(Jean Baudrillard, 1983)

61. information economics:
dissimulate
immaterial representation
non-rivalry of consumption

62. generative economics:
simulate
metabolism of information
generative recombination

63. center for design + innovation
cD+i
industrial
economics
information
economics
generative
economics
strategic use of
information as by product
strategic use of
information as simulacra
deconstruction of
traditional organizations
deconstruction of traditional
industrial systems
products
noun
platform
verb
things experiences
creativity generativity
craftsmanship procrastinated binding

64. 3.1

65. what is a firm?

66. what is a product?

67. center for design + innovation
cD+i
rawmaterials
products&services
activities technology knowledge
a firm: a classic model

68. product vs. service

69. product as a fossil of activities
frozen in time and space
through production value chain

70. product as a performative
enactment of a network of activities
at the point of consumption

71. liquidation of product
product as a delivery platform of
contents and service activities

72. center for design + innovation
cD+i
procrastinated
binding
“value is created after the product was purchased”

73. center for design + innovation
cD+i
resolution of transactions
“creating Moor’s law in physical world to reduce frictions
in economic transactions”

74. power shift

75. musicians are poorer
than ever before!

76. 3.2

77. center for design + innovation
cD+i
Internet of
things
Mobile
Internet
Big Data
Analytics
Cloud Service
Quad Core of Computed Experience
place
time
things peopleexperiences
atoms bits
B2BB2C
(c) Youngjin Yoo, 2014

78. characteristics of hybrid
sociomaterial world
• digitally enabled complex socio-technical
phenomena
• no central governing body or design rules
• evolve beyond the original designers
• non-linear emergent behaviors
• leaves large-scale digital trace data

79. design decision
live algorithmic
disposable permanent

80. big data with an
evolutionary ontology

81. evolutionary computation
social science

82. holy trinity of
social science
(and their evolutions)
activities
artifactsstructures
algorithms?

83. the rise of
algorithmic reality

84. forget about
B2B and BC2

85. think about
A2C and A2A
Inspired by Karl Lang @ Baruch College

86. 6.0

87. concluding thoughts

88. what should IS
discipline do?

89. “the tables have turned”

90. seeking new theories on
[sociomaterial, computed,
algorithmic, generative, or digital, but
definitely not just social or technical]
reality

91. beginning with a
hybrid agency
actors
matter
data
algorithms

92. thank you