INTRODUCTION

Y2K – Chaos, or craze? Hype, or reality? Or maybe both? Last night I had a discussion with my roommate who is from France, and he thinks that the America is over reacting. That nothing would happen. And I asked him how he was so sure, and he just said its his “intuition”. My intuition is a little different. But I hope his is right. This is one argument I would love to loose.

I am extremely tempted to liken Y2K with the iceberg in Titanic, but I do so with the risk of making it sound catastrophic. Surely not something easy to digest. But the similarity is just to stark to ignore, and leaves one wondering whether we are actually riding a wave of mass denial, and are we heading straight into a technical and social time bomb. Ofcourse not. That sounds ridiculous, just take one look around you and you’ll see calm people, going about their business as usual. If it was so serious then won’t everyone be panicky?

And I am again tempted to quote a line from the epic movie Titanic – “ it’s a mathematical certainty, the Titanic will sink”. Again sounding pessimistic for sure. But let me assure you, this is one phenomenon where the realistic will sound pessimistic, no matter how optimistic they try to be. Anyone who knows anything about software fundamentals has mathematical programming facts staring right at his face. A programmer would have to be blind to ignore it all and blissfully go about as if “nothing will happen”. It’s like saying, oops, I dropped the apple, but hopefully it will never reach the ground”. Well, this apple is hitting the ground, and pretty soon.

But what is it that makes Y2K such a threat? Aren’t people working on it? And won’t most of the mission critical systems be Y2K ready in time at least in the U.S.? And if systems do fail, big deal!! Can’t we do stuff manually for some time. There may be annoyances, but that’s all.

In the above three lines are all the answers embedded themselves. Because lets look at the facts again.

Aren’t people working on it? Sure, mere fraction of the world’s population is trying to evaluate 70 billion microchips, and billions of lines of code. The total Y2K programmers could not get everything done in time even in the next 6 years[1]. We have just 8 months to go.

And won’t most of the mission critical systems be Y2K ready in time at least in the U.S.? Sure, most will be in the U.S, which obviously means that a lot won’t be. This is the precise the cause for most of the misconceptions of this problem. The damage that can be caused by this “lot” is grossly underestimated. Unfortunately, computer systems are interdependent by definition. If one fails, it brings the others down. This is indisputable in the programming world. There are no redundancies in programming. You remove one line among the millions, and the effect trickles down to the others. Every single line of code serves a purpose and the most important ones are those that perform computations, often the function of the date field. And this is where the Y2K problem comes in.

My effort in this report has been to provide a balanced view of the Year 2000 problem, and the possible impact on international business. Most of my analysis is logic driven, because it’s really not possible to accurately predict what will happen. So I have used as much information as I could find to present possible scenarios. I also understand this is an International Business class, and the scope of this report should be restricted as much as possible to the disruptions to International Business. But at points in this report, I have found in necessary to take a much broader approach, since it is important to understand the overall nature of this problem. The very logic that this problem will not be isolated in its impact, but can percolate down to every imaginable aspect of our lives, calls for such an approach.

It may also seem that the report presents a negative picture at times, its because the Internet, by far the most comprehensive source for Y2K information, is fairly pessimistic about it. And sadly, the most optimistic articles I came across were backed by extremely loose facts, and emotional arguments like.."How is it possible", and "the government will not let anything major happen". On the other hand, the most pessimistic articles were mostly backed by indisputable logic, and facts. But like every successful businessman will tell you, In every threat lies an opportunity. We can not deny the vast number of problems that face us as a world today. People are dying of starvation, and children are being abused and exploited. The Y2K poses an opportunity of creating a stronger, closer world, where people are tested for their true character. The connection may not seem clear right now, but read on, I do make a point. So let us understand what the hell the hype is all about.

Defining Y2K - What is the Y2K bug ?

The way that a problem or a complex set of problems is defined is critical to the way it is addressed. With Y2K, monumental errors have been made in the way the problem has been defined. As a result, relatively few people appear to be approaching the set of problems, challenges, and threats posed by Y2K in a comprehensive way. Many computer systems use software that tracks dates with only the last two numbers of the year, such as 97 instead of 1997. When 00 comes up for the year 2000, many computers will view it as 1900 instead, potentially leading to failures in business, transportation, utilities, and other services.

This in a nutshell is the year 2000 bug. In reality, the Y2K bug is not really a bug, but a design flaw. A bug is one which keeps the software from doing what its supposed to do, but these softwares were not designed to recognize 2000 at all. So the bugs were the programmers.

Peter de Jager, who has been actively studying the problem and its implications since 1991, explains the computer math calculation: "I was born in 1955. If I ask the computer to calculate how old I am today, it subtracts 55 from 98 and announces that I'm 43. . . But what happens in the year 2000? The computer will subtract 55 from 00 and will state that I am minus 55 years old. This error will affect any calculation that produces or uses time spans. . . . If you want to sort by date (e.g., 1965, 1905, and 1966), the resulting sequence would be 1905, 1965, 1966. However, if you add in a date record such as 2015, the computer, which reads only the last two digits of the date, sees 05, 15, 65, 66 and sorts them incorrectly. These are just two types of calculations that are going to produce garbage." [2]

What’s this thing about a System?

We all live in a system, but how well do we understand a system? It is very difficult to comprehend the overall dynamics of a system, when you are merely a unit of it. It’s as difficult as to be completely aware of how your own body systems are functioning at all times. Well, who cares, we say, as long as it's not causing any problems. Well, there you go, need I say anything further.

The world today is a living breathing system as well. And even though we think we have the tools in place, if you look around you, and at other countries, you will see how inefficient these systems are. Because apart from the technical systems in place, are extremely complex human systems functioning as well. The problem we are witnessing in Kosovo is an example of a human administration system going out of hand. But try and comprehend the role of the computer systems in today's world. They are really holding all other systems together. Transport, Communications, and Power being the tree "killer" systems, which in turn are holding smaller subsystems together. These three are also holding international business together.

So how basic is the date function in these computer systems? Well, think about what Einstein said.. "All matter exists in time and space". This is true of computer systems as well. All software exists in two dimensions. Time, and space. And its computing power is greatly enhanced by the memory available (space), and the way the time aspect is used. To really make powerful software, both these dimensions are important. For a computer will not ape the real world too well if it does not use the time dimension. It will be a "flat" software, much like in 2-D. But sadly, most of the critical systems all over the world exist in 3-D. Those artificially intelligent computers doing so much of today's thinking use both dimensions.

So now we know that we are dealing with something big here. So what happens? Again, In an attempt to illustrate the true magnitude of this problem, I present some very essential concepts.

- The Y2K bug is no more a technical problem, it is a social problem. . Y2K is a technology-induced problem, but it will not and cannot be solved by technology [3]

Y2K creates societal problems that can only be solved by humans. This is probably the most difficult of the Y2K concepts to digest. It is also one of the biggest reasons why the Y2K is creeping onto us so silently. Because most people discard it as a technical problem, and the "techies" will handle it. Unfortunately, it has way passed the "technical problem" stage, and now it is a full blown social challenge, of the magnitude never before faced. Because the solution does not lie in making all systems Y2K compliant on time. That’s ridiculously impossible at this stage. The only true solution does not lie in prevention, but in survival. How will we as a society fare in the biggest challenges of all time. A challenge which requires unity and co-ordination with each other, and with other countries. The only way to beat a system failure is either to correct it in time, or to put in place another system, and the new system will obviously have to be based on human corporation, understanding, and sacrifice.

- Solving most of the problem is not enough. Everything needs to be corrected[4]

In an interdependent system, solving most of the problem is no solution. As Y2K reporter Ed Meagher describes: It is not enough to solve simply "most of these problems." The integration of these systems requires that we solve virtually all of them. Our ability as an economy and as a society to deal with disruptions and breakdowns in our critical systems is minuscule. Our worst case scenarios have never envisioned multiple, parallel systemic failures. Just in time inventory has led to just in time provisioning. Costs have been squeezed out of all of our critical infrastructure systems repeatedly over time based on the ubiquity and reliability of these integrated systems. The human factor, found costly, slow, and less reliable has been purged over time from our systems. Single, simple failures can be dealt with; complex, multiple failures have been considered too remote a possibility and therefore too expensive to plan for

- Its already too late :

This is the most scary of the three concepts. We have passed the technical deadline. Now we are dealing with a social problem. How will we react in crises is the big one.

So what happens now?

One way of arriving at a comprehensive outcome of Y2K is to imagine three circles ~ with a small circle in the middle of a medium sized circle, which is in turn inside a larger circle (See Figure below). [5]


These circles represent the following:

· The small inner circle: The inner circle represents the Y2K problem understood primarily as a computer hardware/ software/ information technology and communications technology problem.

· The second circle: The second circle, the one encompassing the inner circle, represents the non-Y2K compliant date-sensitive embedded system aspect of the Y2K problem.

· The third circle: The third circle encompassing both of the first two circles represents the connectivity or interdependency aspects of the Y2K problem. The developed world has become increasingly dependent on technology. Our standard of living would not be the same without technology. The Y2K problem jeopardizes the fragile interconnected linkages that have made this standard of living attainable and sustainable. If these fragile connections break, no part of our lives will remain untouched. Depending on the severity and the consequences of the breaks and weakened links, national and global economies will be affected, significantly impacting the economic arrangements that have helped so many in the world attain and maintain a high standard of living. Major impacts on national and global economies could also have substantial affects on social stability and jeopardize social order.

The Potential Impacts of Each of the Three Aspects of the Problem [6]

The malfunctioning of computer hardware and software can render systems inoperative. The corruption or degradation of computer data can damage critical infrastructure. The degradation of data could drastically affect the electric power industry; the banking industry; the financial services sector; telecommunications; business and trade; transportation and shipping; manufacturing; public health and safety; essential public services, including emergency and fire services; the administration of justice; and food, water, and fuel supply and distribution.

While the inner circle definition of Y2K can be associated with infrastructure disruptions, the second circle, malfunctioning non Y2K compliant date-sensitive embedded systems, can be associated with both infrastructure disruptions and technological disasters. The latter could include Bhopal-type and Chernobyl-type disasters. Technological disasters would also include the accidental release of radiation or other hazardous emissions or substances from high risk plants, refineries, sites and facilities. They could include as well, oil or gas pipeline explosions or malfunctions, and the malfunctioning of tankers and off-shore oil rigs.