'Will the Y2K problem effect Europe? and if it does, how will it effect the U.S?
asked in the Electric Utilities and Y2K Q&A Forum
Perhaps I missed the question on the current page, but my question is " Will the Y2K problem effect
Europe? And, if it does, how will it effect the U.S?"
Asked by Michelle Rich (mbrich@pacbell.net) on November 10, 1998.
Answers
Michelle,
Y2K knows no bounds, respects no borders, and impacts all equally. The only valid criteria to use in
determining if a company/country/continent will be affected by Y2K is its reliance on technology, or its
suppliers' reliance on technology, or its suppliers' suppliers' reliance on technology (you get the point). As far
as the impact, Europe may potentially be affected worse than the US because of the current activity
surrounding conversion to a common currency. Peter De Jager actually addressed the Europeans and told
them they should put off Euro conversion until post-2000 and focus on fixing Y2K issues. The predictable
response was "huh?..." Of course, with our highly intertwined and interdependant economy, Europe's
problems are our problems, and Asia's problems, and Austrailia's problems, etc. We are not immune. If we
fix everything in this country, but Asia, Europe, Russia, etc. lag behind, you can expect a disruption to your
lifestyle (nobody debates this, they only debate the degree).
It is extremely ironic that the countries that will be the least affected (in my opinion) by the Y2K mess will be
the 3rd world developing nations. We have some friends who are missionaries to Ethiopia, and their way of
life is interesting.....farming, drawing water from a well, grass roofed buildings. They rely very little, (if at all)
on commercially produced power. What power they may have is a luxury, not a necessity. What we are
realizing now is the degree to which we've bartered away our self-reliance in exchange for a comfortable,
modern consumer lifestlye. In all likelihood, Y2K will pass and most of the developing nations will not even
know it was a problem. Until, that is, they require relief from a famine or epairs to the village pump. Then
they may find out (maybe - pray to God not), that the rest of the "civilized" nations have self destructed
around them.
So, while I am aware that I'm sounding negative, my opinion is there's no place to hide. If some nations have
problems, all nations will have them. Only time will tell if they will.
My advice? - prepare as you can, think how you will help the person next door, and pray to God that the
disruption will be minor.
Ron
Answered by Ronald Hocutt (rhocutt@ppctx.com) on November 11, 1998.
Michelle, below is a report on the latest Cap Gemini findings. Ron is correct that the year 2000 computer
problem spans the globe. It's an equal-opportunity "bug". Other recent articles have reported that the Far
East, Russia, Japan, and South America will be especially hard hit.
Tomorrow morning's Financial Times ( Tuesday ) .
New millennium bomb fears By Christopher Price
It is too late now for European and US companies to defuse the millennium bomb in their computers, a
comprehensive survey has revealed. The survey, carried out by Cap Gemini, Europe's biggest software and
services company, urges governments to give up a broad-based approach to the problem and focus their
efforts on fixing computer systems that operate essential services.
The millennium, or 'Y2K', bomb refers to problems arising because older computer systems are unable to
recognise the date change from 1999 to 2000. Geoff Unwin, Cap Gemini's vice-chairman, said: "As
companies and organisations begin tackling the computer bomb, they find the situation is worse, more
complicated and more expensive than they expected."
The company said that as a result the estimated cost of defusing the bomb in the US and Europe had risen
20 per cent in the past six months to £508bn.
The report's pessimistic conclusions will be backed up tomorrow when Taskforce 2000, the UK pressure
group, is expected to report that a quarter of UK government departments and agencies are badly prepared.
Robin Guenier, head of Taskforce 2000, said: "Governments should treat this issue as an emergency."
Cap Gemini found that US companies had spent 61 per cent of their estimated cost of fixing the problem,
while European organisations have almost reached the halfway stage. But the Americans were less confident
than the Europeans that their systems would be adjusted in time.
"Why is the US less confident?" asked Mr Unwin. "Because they have seen the size of the problem."
Of the total increase in planned expenditure on defusing the millennium bomb that has emerged in the last six
months, the share going to computer hardware has risen by more than half to $169bn. Estimated software
costs have increased 12 per cent to $200bn, while staff costs have risen 17 per cent to $489bn. One result
of the channelling of resources into the problem is that other information technology projects are being
postponed. "We are beginning to see a large and growing backlog of postponed IT initiatives," said Mr
Unwin.
He denied that his company was using the issue to stimulate business for itself, with only 6 per cent of its
work related to the problem: "This issue goes beyond corporate matters - it is absolutely essential that
immediate action is taken to protect the vital services in society."
Answered by Bonnie Camp (bonniec@mail.odyssey.net) on November 11, 1998.
Michelle, I did not address the second part of your question. Y2K disruptions in other countries will impact
the United States in many ways. A great deal of the assembly of products sold by U.S. businesses in done
overseas. Most large corporations in this country have branches all over the world, which contribute to the
health of the whole organization. If the infrastructure in Brazil goes down (utilities, phones, etc.) for instance,
then sections of many U.S. businesses will be cut off from the parent company. We are also a major
importer of industrial ball bearings from Brazil. Such things as ports and docking, loading/unloading facilities,
and airport readiness will absolutely impact the world economy.
Then there is the international banking industry. Defaults on loans, or loss of production, or layoffs in one
part of the world affect the financial well being of other countries which have investments around the globe.
An economic depression in one area spreads to others. Three hundred and fifty people in my small city were
laid off because of the default of orders after the financial problems in the Far East of a few months ago.
That's just one little incident, but those incidents are spread all over our country.
These are just broad examples to give you an idea of the interconnections we have abroad, and they barely
cover the tip of the iceberg. It's safe to say that if one business in Maylasia fails, the ripple effects might be
felt around the world. We ARE the world, in practice as well as song.
Answered by Bonnie Camp (bonniec@mail.odyssey.net) on November 11, 1998.
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