By Eric Schmidt and Reed Hundt
Published Sunday, January 10, 1999, in the San Jose Mercury News
IN less than 12 months, on Jan. 1, 2000, one of two things will take place.
1) The timely actions of leaders in the banking, communications, securities trading, electric power, airline, health care and other industries will have fixed the software problem known as the year 2000 problem.
Or:
2) Because of the pervasive failure of hardware and software systems, electricity, communications and medical functions will fail for millions of people around the world. Health and safety will be jeopardized on a scale vastly greater than the effects of any natural disaster. Business transactions will be severely disrupted. The global economy, and each national economy in the developed countries, will go into recession.
As a miserable coda to the calamity, lawyers will fill myriad lawsuits, pursuing the blame game on a scale never seen, not even in our stunningly litigious society.
Each of these dramatically different predictions is widely available in conferences, studies, speeches and workshops around the world.
If you believe the cheery version of events, do nothing and trust the government to alert relevant business leaders, who in turn will pay for the necessary fixes.
On the other hand, if you believe the doomsayers, buy gold and batteries, cans of food, a wood-burning stove, a four-wheel-drive vehicle and a home in a warm state.
But the year 2000 problem does not require a guess as to whether the idea of progress will go a-cropper in less than a year. In fact, whether the inevitable calendar change from 1999 to 2000 disrupts a global economy that lives and works on, by, and through the network of distributed intelligence depends primarily on what business -- not government -- does from this day forward.
There is ample time for every business and other form of organized human activity to address the potentially serious glitches of installed hardware and software. There is ample worldwide capital to pay for the fixes or to buy new hardware and software that is free of the problem. There is sufficient time to pre-test all important health, safety and business systems, so everyone can be comfortably confident that the information system disruptions, if any, of Jan. 1, 2000, cost no lives and produce no downturn in economic activity.
It is, however, imperative that businesses act now. For most, the changes information systems need are not technically difficult, in part because businesses can use superb new tools that use the reach and intelligence of today's computer networks to ferret out Y2K problems. By taking advantage of these technical resources and by working together across organizations and industries, business can address the problem in three discrete steps:
The first is recognition. The year 2000 problem is embedded in a great deal of software and hardware used in virtually every business activity in the world. No business of any size can be indifferent to the issue. Therefore, the U.S. Chamber of Commerce, or some other national business organization, should assure that every business diagnose its Y2K problem by a fixed date in the near future. Business itself, not government or courts, should define the relevant tests.
The second step is action. All businesses essential to vital national activities -- health, safety, banking, communications, media, electric power -- must guarantee their customers by an appropriate date in 1999 that they have run tests to adequately address Y2K problems. The country deserves this assurance; doubt and anxiety must be dispelled.
The third step is incentives. The Y2K problem should not be an opportunity for some to succeed at the expense of others. The Congress already passed and the president signed into law a bill that provides protection for those who disclose a Y2K problem. The new Congress should quickly pass a new law to create tax breaks and other incentives for businesses to spend resources to detect and fix their Y2K problems.
To accomplish all three steps, businesses need to come together and form a public-private partnership with government at all levels. Working together, businesses can seek voluntary actions within various industries and insist that Congress pass laws that will reduce the Y2K problem to an expensive annoyance, not an economic Armageddon.
The Clinton administration and the Congress in Washington should focus on supporting American business, acting now, to ensure that New Year's Eve 1999 is a time of celebration and not dread.
Eric Schmidt is CEO of Novell Inc. Reed Hundt is the former chairman of the Federal Communications Commission and a director of Novell.
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