1. Nick Donofrio IBM Fellow (Retired) Executive Vice President Innovating in the 21 st Century

2. Today’s Overarching Realities 21st Century Drivers of Change Network Ubiquity More than a billion Internet users and three billion wireless subscribers worldwide The Rising Tide of Globalization Economics, Expertise, Openness Innovation Combining technology with insight to create new value

5. The Changing Nature and Scope of Innovation Product and Services Innovation Process Innovation Business Model Innovation Management System Innovation Societal Innovation Open Multi-disciplinary Collaborative Global

7. Established Innovation Ecosystems Positioning to Compete in the Global Economy NII Initiatives Formulating NII Initiatives Launched

8. Global Innovation Outlook Identifying and Acting on Major Issues Affecting Business and Global Society Security & Society, Water & Oceans Media & Content, Africa Future of the Enterprise, Environment, Transportation Healthcare, Government, Work/Life Balance GIO 1.0 GIO 2.0 GIO 3.0 GIO 4.0

12. Recognizing the Need for Services Innovation World’s Largest Labor Forces A = Agriculture, G = Goods, S = Services 2008 2008 U.S. Job Shift to Services (A) Agriculture (G) Goods (S) Services Service sector employment is growing rapidly in both developed and developing nations. Sources: 2008 CIA World Fact Book. Historical Trend Data from 2004 IBM Study. 30 20 10 70 1.6 Nigeria 40 68 28 5 2.1 Japan 30 26 11 63 2.2 Bangladesh 38 60 29 11 2.4 Russia 20 66 14 20 3.2 Brazil 35 39 18 43 3.5 Indonesia 21 78 20 2 4.9 USA 28 28 12 60 16.5 India 191 32 25 43 25.6 China Approx. 25 yr % growth in services % S % G % A % WW Labor Nation

15. Developing T-Shaped People Science and Engineering Math and Operations Research Computer Science & Info. Systems Industrial and Systems Engineering Business and Management Economics and Social Sciences Business Anthropology Organizational Change & Learning

19. “ If nothing changes, nothing changes.”