Yep, the Hickey and Techweb articles make even more sense now...
>>>The Economist
Fair Use/etc...
Year 2000 in Japan
Bug? What bug?
T O K Y O
The millenium bug
To be on the safe side, East Japan Railway is thinking about halting
all its trains a few minutes before midnight on December 31st. Japan
Travel Bureau, the country?s biggest travel agent, is refusing to
book customers on flights that will be airborne at the time. Japanese
manufacturers and retailers, heavily dependent upon computerised
just-in-time delivery systems, are beginning to fear the worst. NEC,
an electronics group, intends to store an unprecedented two weeks?
worth of computer parts so that its factories do not miss a beat in
the new year. Hospitals across Japan have started training staff on
how to use manually operated equipment such as artificial respirators.
Less than five months before computers confront the millennium bug,
officialdom in Japan has suddenly realised that the country is
horribly ill-prepared. The world?s second-biggest industrial economy
comes below countries such as Hungary, Chile and Thailand in the
?preparedness index? put out by Warburg Dillon Read, an investment
bank, on the basis of research by Gartner Group, a consultancy. The
government has flipped from confidence to panic. The prime minister,
Keizo Obuchi, is chairing a crisis-management group, and officials
are appealing to the public to take their own precautions.
Since Japan computerised its banks, businesses, hospitals, schools
and government offices much later than did America, more of the
software in use in the country today is ?Year 2000-compliant?? and
can be expected to roll the millennium over correctly. Even so,
recent studies suggest that a disturbing number of Japanese
companies are woefully behind in their efforts to fix what faulty
software they have.
As elsewhere, the biggest laggards are small firms. In Fukushima in
northern Japan, the prefectural government asked 15,000 local firms
about progress. Only one in seven bothered to reply, and half of
those thought they were immune to the bug. Of those that realised
they were at risk, little more than a third had amended their
software, a quarter were working on the problem, and the rest had
yet to get round to it.
But it is the lack of urgency among large firms and public services
in Japan that has horrified the central government. Only a fifth of
the 2,000-or-so hospitals designated as crucial by the prefectural
authorities have debugged the software for computerised medical
equipment and records. Fewer than a tenth have put together
contingency plans in case things go wrong.
The Tokyo Stock Exchange (TSE) and the Japan Institute of Certified
Public Accountants have been trying to bully Japanese companies into
revealing what they have done to protect themselves against the
millennium bug. For the first time, listed companies in Japan had to
report details of their Year 2000 remedial work in the short-form
annual reports that they published in late May. Garry Evans of HSBC
Securities in Tokyo has analysed disclosures by some 298 large firms
listed on the TSE, and found that most had started late and provided
only scanty details of their progress. Around 8% of the firms had
completed their Year 2000 work when the reporting period ended in
March; 46% said they expected to have done so by this month.
Many of the companies did not start work until late last year. The
most disturbing case was Nippon Steel, Japan?s biggest steel maker,
whose top managers had not heard of the Year 2000 problem until a
year ago. And the most embarrassing was Nintendo, a videogame maker
and one of Japan?s highest-profile high-tech companies, which Mr
Evans judges to be in danger. On the basis of their own reports,
Mr Evans concludes that 30% of the companies examined are behind in
their efforts to purge the millennium bug from their computers.
If the rest of corporate Japan is no better, what might this do to
the country?s struggling economy? It should provide a boost in the
fourth quarter, says Mr Evans, as firms stock components before the
end of the year. Kathy Matsui of Goldman Sachs reckons that the Year
2000 effect could add 0.3% to Japan?s GDP growth in 1999. But then
destocking and disasters could subtract 0.6% in 2000. Come January
1st, Japan?s failure to do more will be a good test of whether
everyone else was right to have worried so much after all.
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