The Year 2000: Social Chaos or Social Transformation? by John L. Petersen, Margaret Wheatley, Myron Kellner-Rogers version in PDF (Adobe Acrobat) Download Acrobat Editor's Note: This is a draft of an article scheduled for publication in the October 1998 issue of THE FUTURIST. Due to the time-sensitive nature of the material, it was posted here to create greater awareness of the issue as well as elicit comments and questions before final publication. Please send your comments and questions to the authors at johnp@arlinst.org and the editors at cwagner@wfs.org . The Millenial sun will first rise over human civilization in the independent republic of Kiribati, a group of some thirty low lying coral islands in the Pacific Ocean that straddle the equator and the International Date Line, halfway between Hawaii and Australia. This long awaited sunrise marks the dawn of the year 2000, and quite possibly, the onset of unheralded disruptions in life as we know it in many parts of the globe. Kiribati's 81,000 Micronesians may observe nothing different about this dawn; they only received TV in 1989. However, for those who live in a world that relies on satellites, air, rail and ground transportation, manufacturing plants, electricity, heat, telephones, or TV, when the calendar clicks from '99 to '00, we will experience a true millennial shift. As the sun moves westward on January 1, 2000, as the date shifts silently within millions of computerized systems, we will begin to experience our computer-dependent world in an entirely new way. We will finally see the extent of the networked and interdependent processes we have created. At the stroke of midnight, the new millenium heralds the greatest challenge to modern society we have yet to face as a planetary community. Whether we experience this as chaos or social transformation will be influenced by what we do immediately. We are describing the year 2000 problem, known as Y2K (K signifying 1000.) Nicknamed at first "The Millennial Bug," increasing sensitivity to the magnitude of the impending crisis has escalated it to "The Millennial Bomb." The problem begins as a simple technical error. Large mainframe computers more than ten years old were not programmed to handle a four digit year. Sitting here now, on the threshold of the year 2000, it seems incomprehensible that computer programmers and microchip designers didn't plan for it. But when these billions of lines of computer code were being written, computer memory was very expensive. Remember when a computer only had 16 kilobytes of RAM? To save storage space, most programmers allocated only two digits to a year. 1993 is '93' in data files, 1917 is '17.' These two-digit dates exist on millions of files used as input to millions of applications. (The era in which this code was written was described by one programming veteran as "the Wild West." Programmers did whatever was required to get a product up and working; no one even thought about standards.) The same thing happened in the production of microchips as recently as three years ago. Microprocessors and other integrated circuits are often just sophisticated calculators that count and do math. They count many things: fractions of seconds, days, inches, pounds, degrees, lumens, etc. Many chips that had a time function designed into them were only structured for this century. And when the date goes from '99 to '00 both they and the legacy software that has not been fixed will think it is still the 20th century -- not 2000, but 1900. 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, 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."1 The calculation problem explains why the computer system at Marks & Spencer department store in London recently destroyed tons of food during the process of doing a long term forecast. The computer read 2002 as 1902. Instead of four more years of shelf life, the computer calculated that this food was ninety-six years old. It ordered it thrown out.2 A similar problem happened recently in the U.S. at the warehouse of a freeze dried food manufacturer. But Y2K is not about wasting good food. Date calculations affect millions more systems than those that deal with inventories, interest rates, or insurance policies. Every major aspect of our modern infrastructure has systems and equipment that rely on such calculations to perform their functions. We are dependent on computerized systems that contain date functions to effectively manage defense, transportation, power generation, manufacturing, telecommunications, finance, government, education, healthcare. The list is longer, but the picture is clear. We have created a world whose efficient functioning in all but the poorest and remotest areas is dependent on computers. It doesn't matter whether you personally use a computer, or that most people around the world don't even have telephones. The world's economic and political infrastructures rely on computers. And not isolated computers. We have created dense networks of reliance around the globe. We are networked together for economic and political purposes. Whatever happens in one part of the network has an impact on other parts of the network. We have created not only a computer-dependent society, but an interdependent planet. We already have frequent experiences with how fragile these systems are, and how failure cascades through a networked system. While each of these systems relies on millions of lines of code that detail the required processing, they handle their routines in serial fashion. Any next step depends on the preceding step. This serial nature makes systems, no matter their size, vulnerable to even the slightest problem anywhere in the system. In 1990, ATT's long distance system experienced repeated failures. At that time, it took two million lines of computer code to keep the system operational. But these millions of lines of code were brought down by just three lines of faulty code. And these systems are lean; redundancies are eliminated in the name of efficiency. This leanness also makes the system highly vulnerable. In May of this year, 90% of all pagers in the U.S. crashed for a day or longer because of the failure of one satellite. Late in 1997, the Internet could not deliver email to the appropriate addresses because bad information from their one and only central source corrupted their servers. Compounding the fragility of these systems is the fact that we can't see the extent of our interconnectedness. The networks that make modern life possible are masked by the technology. We only see the interdependencies when the relationships are disrupted -- when a problem develops elsewhere and we notice that we too are having problems. When Asian markets failed last year, most U.S. businesses denied it would have much of an impact on our economy. Only recently have we felt the extent to which Asian economic woes affect us directly. Failure in one part of a system always exposes the levels of interconnectedness that otherwise go unnoticed—we suddenly see how our fates are linked together. We see how much we are participating with one another, sustaining one another. Modern business is completely reliant on networks. Companies have vendors, suppliers, customers, outsourcers (all, of course, managed by computerized data bases.) For Y2K, these highly networked ways of doing business create a terrifying scenario. The networks mean that no one system can protect itself from Y2K failures by just attending to its own internal systems. General Motors, which has been working with extraordinary focus and diligence to bring their manufacturing plants up to Year 2000 compliance, (based on their assessment that they were facing catastrophe,) has 100,000 suppliers worldwide. Bringing their internal systems into compliance seems nearly impossible, but what then do they do with all those vendors who supply parts? GM experiences production stoppages whenever one key supplier goes on strike. What is the potential number of delays and shutdowns possible among 100,000 suppliers? The nature of systems and our history with them paints a chilling picture of the Year 2000. We do not know the extent of the failures, or how we will be affected by them. But we do know with great certainty that as computers around the globe respond or fail when their calendars record 2000, we will see clearly the extent of our interdependence. We will see the ways in which we have woven the modern world together through our technology. What, me worry? Until quite recently, it's been difficult to interest most people in the Year 2000 problem. Those who are publicizing the problem (the Worldwide Web is the source of the most extensive information on Y2K,) exclaim about the general lack of awareness, or even the deliberate blindness that greets them. In our own investigation among many varieties of organizations and citizens, we've noted two general categories of response. In the first category, people acknowledge the problem but view it as restricted to a small number of businesses, or a limited number of consequences. People believe that Y2K affects only a few industries—primarily finance and insurance—seemingly because they deal with dates on policies and accounts. Others note that their organization is affected by Y2K, but still view it as a well-circumscribed issue that is being addressed by their information technology department. What's common to these comments is that people hold Y2K as a narrowly-focused, bounded problem. They seem oblivious to the networks in which they participate, or to the systems and interconnections of modern life. The second category of reactions reveals the great collective faith in technology and science. People describe Y2K as a technical problem, and then enthusiastically state that human ingenuity and genius always finds a way to solve these type of problems. Ecologist David Orr has noted that one of the fundamental beliefs of our time is that technology can be trusted to solve any problem it creates.3 If a software engineer goes on TV claiming to have created a program that can correct all systems, he is believed. After all, he's just what we've been expecting. And then there is the uniqueness of the Year 2000 problem. At no other time in history have we been forced to deal with a deadline that is absolutely non-negotiable. In the past, we could always hope for a last minute deal, or rely on round-the-clock bargaining, or pray for an eleventh hour savior. We have never had to stare into the future knowing the precise date when the crisis would materialize. In a bizarre fashion, the inevitability of this confrontation seems to add to people's denial of it. They know the date when the extent of the problem will surface, and choose not to worry about it until then. However, this denial is quickly dissipating. Information on Y2K is expanding exponentially, matched by an escalation in adjectives used to describe it. More public figures are speaking out. This is critically important. With each calendar tick of this time, alternatives diminish and potential problems grow. We must develop strategies for preparing ourselves at all levels to deal with whatever Y2K presents to us with the millennium dawn. What we know about Y2K a technological problem that cannot be solved by technology the first-ever, non-negotiable deadline a systemic crisis that no one can solve alone a crisis that transcends boundaries and hierarchies an opportunity to evoke greater capacity from individuals and organizations an opportunity to simplify and redesign major systems Figure 1 The Y2K problem, really We'd like to describe in greater detail the extent of Y2K. As a global network of interrelated consequences, it begins at the center with the technical problem, legacy computer codes and embedded microchips. (see Figure One) For the last thirty years thousands of programmers have been writing billions of lines of software code for the computers on which the world's economy and society now depend. Y2K reporter Ed Meagher describes "old, undocumented code written in over 2500 different computer languages and executed on thousands of different hardware platforms being controlled by hundreds of different operating systems . . . [that generate] further complexity in the form of billions of six character date fields stored in millions of databases that are used in calculations."4 The Gartner Group, a computer-industry research group, estimates that globally, 180 billion lines of software code will have to be screened.5 Peter de Jager notes that it is not unusual for a company to have more than 100,000,000 lines of code--the IRS, for instance, has at least eighty million lines. The Social Security Administration began working on its thirty million lines of code in 1991. After five years of work, in June, 1996, four hundred programmers had fixed only six million lines. The IRS has 88,000 programs on 80 mainframe computers to debug. By the end of last year they had cleaned up 2,000 programs.6 Capers Jones, head of Software Productivity Research, a firm that tracks programmer productivity, estimates that finding, fixing and testing all Y2K-affected software would require over 700,000 person-years.7 Programmers have been brought out of retirement and are receiving extraordinary wages and benefits to stick with this problem, but we are out of time. There aren't nearly enough programmers nor hours remaining before January 1, 2000. Also at the center of this technical time bomb are the embedded microprocessors. There are somewhat over a billion of these hardware chips located in systems worldwide. They sustain the world's manufacturing and engineering base. They exist in traffic lights, elevators, water, gas, and electricity control systems. They're in medical equipment and military and navigation systems. America's air traffic control system is dependent upon them. They're located in the track beds of railroad systems and in the satellites that circle the earth. Global telecommunications are heavily dependent on them. Modern cars contain about two dozen microprocessors. The average American comes in contact with seventy microprocessors before noon every day. Many of these chips aren't date sensitive, but a great number are, and engineers looking at long ago installed systems don't know for sure which is which. To complicate things further, not all chips behave the same. Recent tests have shown that two chips of the same model installed in two different computers but performing the same function are not equally sensitive to the year-end problem. One shuts down and the other doesn't. It is impossible to locate all of these chips in the remaining months, nor can we replace all those that are identified. Those more than three years old are obsolete and are probably not available in the marketplace. The solution in those cases is to redesign and remanufacture that part of the system -- which often makes starting over with new equipment the best option. That is why some companies are junking their computer systems and spending millions, even hundreds of millions, to replace everything. It at least ensures that their internal systems work. At issue is time, people, money, and the nature of systems. These technical problems are exacerbated by government and business leaders who haven't yet fully understood the potential significance of this issue for their own companies, to say nothing of the greater economic implications. The U.S. leads all other developed nations in addressing this issue, minimally by six to nine months. Yet in a recent survey of American corporate chief information officers, 70% of them expressed the belief that even their companies would not be completely prepared for Y2K. Additionally, 50% of them acknowledged that they would not fly during January 2000. If America is the global leader in Y2K efforts, these CIO comments are indeed sobering. The economic impacts for the global economy are enormous and unknown. The Gartner Group projects that the total cost of dealing with Y2K worldwide will be somewhere between $300 billion to $600 billion -- and these are only direct costs associated with trying to remedy the problem. (These estimates keep rising every quarter now.) The Office of Management and Budget (OMB), in a recently released Quarterly Report, estimated total government Y2K expense at $3.9 billion. This figure was based only on federal agency estimates; the OMB warned that this estimate might be as much as 90% too low considering the increasing labor shortage and expected growing remediation costs as January 1, 2000 looms nearer. And in June of this year, it was announced that federal agencies had already spent five billion dollars. Of twenty-four agencies, fifteen reported being behind schedule. These numbers don't consider the loss of output caused by diverting resources to forestall this crisis. In more and more businesses, expenditures for R&D and modernization are being diverted to Y2K budgets. Business Week in March of 1998 estimated that the Year 2000 economic damage alone would be $119 billion. When potential lawsuits and secondary effects are added to this -- people suing over everything from stalled elevators to malfunctioning nuclear power plants -- the cost easily could be over $1 trillion. But these problems and estimates don't begin to account for the potential impact of Y2K. The larger significance of this bomb becomes apparent when we consider the next circle of the global network-- the organizational relationships that technology makes possible. Who works with whom? The global economy is dependent upon computers both directly and indirectly. Whether it's your PC at home, the workstation on a local area network, or the GPS or mobile telephone that you carry, all are integral parts of larger networks where computers are directly connected together. As we've learned, failure in a single component can crash the whole system; that system could be an automobile, a train, an aircraft, an electric power plant, a bank, a government agency, a stock exchange, an international telephone system, the air traffic control system. If every possible date-sensitive hardware and software bug hasn't been fixed in a larger system, just one programming glitch or one isolated chip potentially can bring down the whole thing. While there isn't enough time or technical people to solve the Y2K problem before the end of next year, we might hope that critical aspects of our infrastructure are tackling this problem with extreme diligence. But this isn't true. America's electric power industry is in danger of massive failures, as described in Business Week's February '98 cover story on Y2K. They report that "electric utilities are only now becoming aware that programmable controllers -- which have replaced mechanical relays in virtually all electricity-generating plants and control rooms -- may behave badly or even freeze up when 2000 arrives. Many utilities are just getting a handle on the problem." It's not only nuclear power plants that are the source of concern, although problems there are scary enough. In one Year 2000 test, notes Jared S.Wermiel, leader of the Y2K effort at the Nuclear Regulatory Commission, the security computer at a nuclear power plant failed by opening vital areas that are normally locked. Given the complexity and the need to test, "it wouldn't surprise me if certain plants find that they are not Year 2000-ready and have to shut down."8 Other electric utility analysts paint a bleaker picture. Rick Cowles, who reports on the electric utility industry, said at the end of February: "Not one electric company [that he had talked to] has started a serious remediation effort on its embedded controls. Not one. Yes, there's been some testing going on, and a few pilot projects here and there, but for the most part it is still business-as-usual, as if there were 97 months to go, not 97 weeks.9 After attending one industry trade show, Cowle stated that, "Based on what I learned at DistribuTECH '98, I am convinced there is a 100% chance that a major portion of the domestic electrical infrastructure will be lost as a result of the Year 2000 computer and embedded systems problem. The industry is fiddling whilst the infrastructure burns." 10 The Federal Aviation Administration is also very vulnerable but quite optimistic. "We're on one hand working to get those computers Year 2000 compliant, but at the same time we're working on replacing those computers," said Paul Takemoto, a spokesman for the FAA in early '98. At the twenty Air Route Traffic Control Centers, there is a host computer and a backup system. All forty of these machines --mid-'80s vintage IBM 3083 mainframes--are affected. And then there are the satellites with embedded chips, individual systems in each airplane, and air traffic control systems around the globe. Lufthansa already has announced it will not fly its aircraft during the first days of 2000. Who else is affected? But the interdependency problem extends far beyond single businesses, or even entire industries. Indirect relationships extend like tentacles into many other networks, creating the potential for massive disruptions of service. Let's hope that your work organization spends a great deal of money and time to get its entire information system compliant. You know yours is going to function. But on the second of January 2000 the phone calls start. It's your banker. "There's been a problem," he says. They've lost access to your account information and until they solve the problem and get the backup loaded on the new system, they are unable to process your payroll. "We don't have any idea how long it will take," the president says. Then someone tells you that on the news there's a story that that the whole IRS is down and that they can neither accept nor process tax information. Social Security, Federal Housing, Welfare—none of these agencies are capable of issuing checks for the foreseeable future. Major airlines aren't flying, waiting to see if there is still integrity in the air traffic control system. And manufacturing across the country is screeching to a halt because of failures in their supply chain. (After years of developing just in time (JIT) systems, there is no inventory on hand—suppliers have been required to deliver parts as needed. There is no slack in these systems to tolerate even minor delivery problems.) Ground and rail transport have been disrupted, and food shortages appear within three to six days in major metropolises. Hospitals, dealing with the failure of medical equipment, and the loss of shipments of medicine, are forced to deny non-essential treatment, and in some cases are providing essential care in pre-technical ways. It's a rolling wave of interdependent failures. And it reaches across the country and the world to touch people who, in most cases, didn't know they were linked to others. Depending on what systems fail, very few but strategically placed failures would initiate a major economic cascade. Just problems with power companies and phone systems alone would cause real havoc. (This spring, a problem in ATT rendered all credit card machines useless for a day. How much revenue was lost by businesses?) If only twenty percent of businesses and government agencies crash at the same time, major failures would ensue. 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. 11 The city of New York began to understand this last September. The governor of New York State banned all nonessential IT projects to minimize the disruption caused by the year 2000 bomb after reading a detailed report that forecasts the millennium will throw New York City into chaos, with power supplies, schools, hospitals, transport, and the finance sector likely to suffer severe disruption. Compounding the city's Y2K risks is the recent departure of the head of its year 2000 project to a job in the private sector.12 But of course the anticipated problems extend far beyond U.S. shores. In February, the Bangkok Post reported that Phillip Dodd, a Unysis Y2K expert, expects that upward of 70% of the businesses in Asia will fail outright or experience severe hardship because of Y2K. The Central Intelligence Agency supports this with their own analysis: "We're concerned about the potential disruption of power grids, telecommunications and banking services, among other possible fallout, especially in countries already torn by political tensions."13 A growing number of assessments of this kind have led Dr. Edward Yardeni, the chief economist of Deutsche Morgan Grenfell, to keep raising the probability of a deep global recession in 2000-2001 as the result of Y2K. His present estimate of the potential for such a recession now hovers at about 70%, up from 40% at the end of 1997.14 How might we respond? (To be continued...) <http://www.wfs.org/year2k.htm>