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The Global Y2K Crisis/Opportunity, by Scott Anderson



Y2K is shorthand for "The Year 2000." The Y2K Crisis refers to the rapidly mushrooming consequences of a seemingly innocent short cut taken by the first generation of computer programmers. This crisis has the potential to be a global disaster and the year 2000 is now only 20 months away.

In the early years of computer programming, every digit of computer memory was precious. Using a two digit year abbreviation became "industry standard" ­p; 1963, for example, was designated as '63.' As computers became cheaper and more and more ubiquitous, however, this standard did not always change.

The abbreviation came to permeate the digital technologies that the global economy depends upon. The abbreviation is found in both hardware and software. Although there are chips and software that deliberately used a four digit year (for example, Macintosh computers), the two digit date remains pervasive ­p; anywhere there is a microchip, the two digit standard is likely to be found.

The problem becomes potentially disastrous with the millennium date change or "rollover." Computer chips and software using two digits for the year may not properly interpret the year '00.' This is the origin of the year 2000 problem, aka "the Millennium Bug."

As organizations all over the world attempt to fix their computer systems and make them "Y2K compliant," the possibility that this "bug" might cause widespread disruption on global, national, regional, local, and personal levels is being increasingly appreciated.

What is being discovered is that the deeper technical people look into computer systems in an effort to identify where the two digit dates are located, the more numerous and complex are the Y2K problems being uncovered. Thus, the scale of the repair job is growing at the same time as time and the supply of skilled technicians are both shrinking.

While it might seems simple enough to locate two digit dates and replace them with four, the problem is that there are billions of lines of computer code, in some hundreds of computer "languages," scattered across hundreds of thousands of computers. In addition to locating the dates, all date references and date computation instructions must also be examined. Furthermore, there are an estimated 25 billion chips "embedded" in control systems everywhere. Those in critical applications must be located and either reprogrammed or replaced. Taken together, this constitutes a vast undertaking.

Thus, it is generally accepted that there is not now, nor is there likely to be, a "magic bullet" that can fix all the Y2K problems in time for 01/01/2000. Computer systems are simply too varied, too numerous, and too complex.

Digital computer technology, often invisible, is now ubiquitous -- in all areas of the economy, every industry, the entire "infrastructure" of public, private, and non-profit sectors alike. Thus, virtually any device, system, or organization that uses modern technology of virtually any type may be vulnerable to Y2K.

Of growing concern is the potential for a huge cumulative impact of many "small" but simultaneous Y2K failures in thousands of different systems. Digital technologies are not only ubiquitous, they are also massively interconnected.

Many large systems using digital technologies have been built up over the 40 plus years of "the electronic era" in successive waves of technical innovation. This has led to layers of newer technologies being grafted on top of older layers. Y2K vulnerabilities in older layers can effect all the systems laid on top.

Many organizations have realized cost savings by "out-sourcing" of services and "just-in-time" delivery of supplies based on close integration of vendors made possible by computer technologies. This has created an extremely dense network of business transactions, most of them automated and dependent upon Y2K-vulnerable technologies.

There are very few attempts being made by global, national, state, or jurisdiction-wide organizations to coordinate the Y2K repair effort. It has been assumed that a decentralized repair effort would suffice. That may not be the case. Many observers feel that centralized efforts beginning now (such as that of Clinton's Year 2000 Conversion Council), are already too late to "get the job done."

What is becoming apparent is that we are faced with an unprecedented situation: something like an earthquake, global in extant (rather than confined to a certain area), certain to occur on 01/01/2000, but of unknown magnitude. Y2K is a major, world-wide crisis which has the potential to cause widespread disruption in the flow of goods, services, and information at all levels of the global economy.

Why Aren't We Hearing More About Y2K?

There has been little in the way of major media coverage of Y2K apart from (and despite) Newsweek's cover story last summer on 06/02/1997 ­p; "The Day the World Crashes." After what now seems like a fairly balanced overview, the article closed with the following ominous words from an industry expert: "There are two kinds of people. Those who aren't working on it and aren't worried, and those who are working on it and are terrified."

Less prominently, numerous items have appeared around the world in newspapers -- often on the business pages, and in high-tech trade periodicals. TV stations run an occasional segment relating to Y2K. There is, however, a massive amount of discussion about Y2K on the Internet. In recent weeks, more substantial pieces have begun to appear on the front pages of the Washington Post, the San Francisco Examiner, and the Wall Street Journal. These articles have painted a picture of how Y2K "won't be all that bad."

An effort is underway to stay optimistic. One major reason is that the goose of Wall Street is busy laying a huge golden egg and national business and government leaders are eager not to create panic while millions are making unprecedented profits-no one wants to cry "wolf" and be accused of creating an investor stampede.

There are other reasons why the full extent of the Y2K crisis is being kept from the public: fear of litigation. There is growing evidence that legal departments of large corporations are advising their executives to not disclose their state of real Y2K preparedness nor the amount they are spending in their Y2K readiness effort. Y2K lawsuits have already been filed and many anticipate the costs of litigation will more than double total Y2K costs over the next five years.

Y2K Scenarios

Nobody knows what is going to happen as a result of Y2K. Scenarios range widely from minimal impact, to "we'll muddle through" disruptions, to deep global economic depression and widespread social unrest. Y2K could also trigger a series of "after shocks" the effects of which could persist for decades.

The likelihood that the impact of Y2K will be minimal seems to decrease with each passing day. As more organizations get seriously involved in efforts to prepare, more and more of them are being forced to consider that time and skilled programmers have already run out, that they will not be able to make their own organizations completely "Y2K compliant," or that it will be impossible to assure that their myriad vendors and clients won't "pollute" their systems with bad data.

In recent months, therefore, there has been more and more discussion about adding "contingency planning"to the repair effort. A wide variety of "what ifs" are being looked at as organizations realize how dependent they are on a complex web of potentially Y2K vulnerable systems.

At a recent "industry breakfast," for example, John Koskinen, Clinton's recently appointed "Y2K Czar" made a number of less than reassuring statements. He said that the Year 2000 Conversion Council that he heads (with a staff of 3, little budget, and no legislative authority) will "move through four phases ­p; organizing the government's response, monitoring performance, contingency planning, and crisis management." On the last point he said that the National Security Council has offered the use of its communications network in the last months of 1999.

He went on to comment on the tenor of the current Y2K debate and characterized the "background noise" surrounding the issue as "becoming increasingly apocalyptic, some of which," he said, "is hard to dismiss out of hand."

A number of other vocal and well-informed Y2K observers have become sufficiently alarmed to make calls for the US to declare a "global state of emergency." This includes Professor Leon Kappelman, of the Society for Information Management, and Edward Yardeni, New York economist for the major German investment bank Deutsche Morgan Grenfell. We may soon see consideration of Yardeni's proposal for a global Year 2000 Alliance at the upcoming G8 meeting, May 15-17 in Birmingham.

Given the enormity of the challenge represented by Y2K, the lack of widespread crisis mentality at this stage means that fewer resources are being devoted to both repairs and contingency planning efforts. This only increases the likelihood of major Y2K disruptions.

 Preparing for Y2K


Technical Notes

Apart from the many technical computer books on the subject, the best overall book for the lay person on Y2K is Edward and Jennifer Yourdon's Time Bomb 2000, Prentice Hall PTR, 1998, widely available and out in paperback.

Y2K Websites

General Y2K sites: -- perhaps the most comprehensive, includes commentary and extensive links to other sites on the web. -- one of the better technical sites, this one is Peter de Jager's. Includes newsclippings from English speaking world at /y2karticles, updated daily. For a detailed authoritative introduction to Y2K, see his "You've Got to Be Kidding" -- one of the most thoughtful overall Y2K scenario discussions is an excellent 86 page on-line text book re Y2K

Y2K preparedness sites:

There are a number devoted to y2k preparations of various sorts: individual, church-oriented, community oriented, etc... The best of these are,,,, and is a site that deals with the global eco-village network of conscious eco-living experiments around the world.

Y2K email updates:

There are several of these available. I've been following "the Y2K Weatherman" Dennis Elenberg available at or by subscribing to regular email updates: send mail to with no subject and a single body line: subscribe. Reports are coming out every few days. There is also a more technically-oriented service from de Jager available at his This report comes out every few weeks. Gary North evidently has a service for Y2Kpreparation of churches that I've just subscribed to by email request to

I. Y2K Status of the Major Categories of Computer Technology

Mainframe "legacy" systems are the bedrock stratum of the Computer Age: Approximately 100,000 "mainframes" worldwide. Millions to hundreds of millions of lines of code in each one. Some code undocumented, idiosyncratic, or in languages no longer used. Programs written in over 500 computer languages still in use.

Organization's information technology (IT) systems and their networked connections have often been laid on top of the mainframe bedrock in layers.

25 Billion "Embedded chips" in control systems everywhere throughout the economy. Critical ones have to be identified, then assessed, reprogrammed, or replaced. "A gargantuan job."

The Internet, despite spot-fault-tolerant design, may not do well--or may fail entirely--if there are widespread failures in power supply or signal router switches.

PCs can malfunction as well ­p; and, if connected to networks, can "pollute" the larger system, i.e., both client and server need to be compliant. Approximately 300 million PCs worldwide. Older BIOS (part of computer system not on main CPU chip) systems non-compliant.

II. Y2K Status of Core Infrastructure (aka "The Iron Triangle")

Electric Utilities -- currently not prepared and may be only partially by 01/01/2000. Some 6000 plants all interconnected. Deregulation of the utility industry and associated restructuring are hitting industry simultaneously. 110 nuclear plants also dependent on digital technology.  See

Telecommunications -- huge legacy systems and lots of embedded chips ­p; see for details. Evidently lawyers for the big telecoms have advised against full disclosure. This has been commented upon recently by Federal Reserve Governor Edward Kelley in testimony before congress -- "We can't get any information from the telecommunications industry. They won't tell us the status of their Y2K efforts. We need this information in order to test our systems. We simply don't know what they are doing and we very much need the information."

Finance -- maybe the best prepared, but only now looking at "connections." Wall Street -- "The Crash of '99?" Many predict drop of 30%. Bank closures, freezing of assets, penalties for withdrawals of IRAs? Currency devaluations to follow? See for details.

III. Y2K Status of Major Industries

(see for links)

Information Technology -- conflicting stories, conflicts of interest? See industry surveys and updates Most recent survey suggests that the "y2k fix-it industry" expects to run out of technically skilled workers in the near future.

Banking -- major alarm signals being heard at global level. See "Time to Declare War on Y2K" by EdwardYardeni consisting of his prepared remarks at recent presentation at the Bank for International Settlements (world's top "bank for bankers") at

Manufacturing -- late to get started on embedded process controllers. The manufacturing sector has the most to worry about, for its year 2000 problems are more complex, widespread, and difficult to remedy than those in straight-forward computer applications such as accounting and finance.  Worse, manufacturing corporations were slow to wake up to the enormity to the task they are belatedly tackling. Article in most recent issue of Fortune Magazine, "Industry Wakes up to the Year 2000 Menace" at

Gas and oil industries -- no news is good news? "A single off-shore oil platform may contain over 10,000 embedded microprocessors. There are over 100 such platforms in the North Sea alone." I've not yet found any really informative material on the state of the gas and oil industries.

Transportation -- rail, trucking, air, and autos all vulnerable. Merger of major rail lines GP and SP led to a huge computer incompatibility snafu still being unraveled. Trucking companies use computers extensively for routing and inventory management. Air traffic control systems may not be compliant in time -- huge legacy mainframes involved. The typical American car now has 10-50 microprocessors with up to 100,000 lines of code!

Retailing -- heavily dependent on all core infrastructures. Systems massively dependent on electricity, telecommunications, transportation, and finance.

Healthcare -- also very heavily dependent on core infrastructure. See for updates re y2k and the healthcare industry.

IV. Y2K Status of Global Governments

US -- too little, too late, too many committees? President issued Executive Order 2/5/98 creating Year 2000 Conversion Council. John Koskinen, head -- "don't panic" from office with a staff of 3. Koskinen recently quoted as saying that the increasingly "apocalyptic tone" of current debate cannot all be "dismissed out of hand." Senate Committee appointed 4/2/98 to be headed by Bob Bennett (R-Utah). IRS, Medicare, SSA -- a wide spectrum of preparedness: "Failure to achieve compliance with Year 2000 will jeopardize our way of living on this planet for some time to come." Arthur Gross, CIO of IRS, 10/17/1997

SEC -- key player sat out the game with no y2k disclosure requirements. Finally issued requirements, 1/12/1998 -- too late for 1997 annual reports. It is not, and will not, be possible for any single entity or collective enterprise to represent that it has achieved complete Year 2000 compliance and thus to guarantee its remediation efforts. The problem is simply too complex for such a claim to have legitimacy. Report to Congress on the Readiness of the United Sates Securities Industry and Public Companies to Meet the Information Processing Challenges of the Year 2000. June 1997. At

Military -- no news is good news? Congressional acts granting exceptions to the original prohibition of Posse Comitatus have significantly altered the manner in which the armed forces may assist law enforcement. Plans for Emergency Military Powers and Domestic Control, Parameters Magazine, Autum 1997 (Full text is at carlisle.www Is secret military planning going on behind the scenes? Ed Yourdon thinks so.

Canada -- conflicting reports -- see

Australia and New Zealand -- lots of worried public pronouncements. See,, and

England -- active contingency planning. Guenier then Cruickshank at Taskforce 2000, supported by PM Tony Blair have all been outspoken. 3/31/1998 Guenier called "informed anxiety essential."

Europe -- a huge mess with the euro currency conversion already underway and causing massive headaches. See communication from European Commission at

Japan -- not much news in the English press. Very distracted from Y2K by the Asian economic crisis.

Third World -- way behind. See

V. Misc. Quotes

The code is broken. The deadline is fixed. We're not good at meeting deadlines. Peter de Jager at Year 2000 Roundtable, Bank for International Settlements, 4/8/1998 (full text is at

Governments and organizations worldwide must immediately address the very serious threat posed to individuals, organizations, governments, and economies by the Year 2000 computer problem, a threat that could disrupt our economies and social systems. Computer Professionals for Social Responsibility @

Things are interconnected in ways we can barely understand.

This is a problem of gigantic dimensions and with so many complexities that it's very hard to think something will not slip. Bichlien Hoang, year 2000 network solutions at Bellcore 03/04/1997

Be prepared! -- Boy Scout's motto.