Economic Effect Of Y2k Bug Essay Research

Economic Effect Of Y2k Bug Essay, Research Paper

The Year 2000 Bug As the millennium approaches we come closer and closer to what some say could mean the end of civilization as we know it. What is this great event that would have such an impact on the world that it could end civilization. The problem is a simple computer bug refereed to as the Y2K bug but its ramifications could be immense. This computer bug has been predicted to impact the world anywhere from a minor problem to the end of a civilization. Whichever view you take on the subject it is clear that this bug will have a definite impact on the economy. The depth of this impact is yet to be determined but by looking at what can realistically happen as a result of this bug and by looking at situations that have upset the economy in the past it will give us a better look at what may happen. In order to understand the Y2K bug we must first understand what it is. For many years electronic storage was very expensive. In the early days of computing a Megabyte or a million bytes of information could have cost up to $100,000 to store electronically. This same amount of information storage can now cost around ten cents. Because of this expensive storage limitation code written for these older computers was compressed in any way possible. One way to cut down the size of code was to compress dates to a format only six characters long. So instead of April 14 1999 the date would be compressed to 4/14/99. At the time of this programming this seemed to be the best solution to the space saving dilemma. As we come closer to the millennium we see that this style of programming was a great overlook of programmers. Assuming that the machines would not still be functioning in the year 2000, programmers did not see this as a problem. Now that the year is approaching there are a great deal more of these machines around then anyone ever would have thought. This poses a problem because when the last two digits of the year section of the date roll around to 00 the computer will think that the year is 1900 because it simply assumed that the first two digits are 19. At first glance this problem seems to be minor but at a deeper look we can see that this Y2K bug can cause a great deal of havoc with our computer systems. Many programs that are date sensitive will react to this bug in a negative way. A good example of a problem that could occur due to the bug would be that of banking software. In that case one of the software s functions would be to bill all of its customers with outstanding loans. This program works by sending the bill progressively every month until the loan is paid off. If the computer were to think that it was the year 1900 then none of these loans would have even been made yet and the computer would become unstable or cease to function. Much of this software can be repaired or replaced with new versions, however, some of it is not as easily replaced. A great deal of the code that is causing worry at the moment is actually imbedded in automated machinery. This code can t be repaired, except by replacing the machinery itself. This code is in many of the machines that run companies, public utilities, and are even in our homes in such appliances as VCRs. Estimates of the effects of these embedded chips vary a great deal and no one really knows how the Y2K Bug will actually affect many of these chips. According to the Gartner Group in a recent study only 1 in 100,000 microcontrollers would be affected. This study however, is widely disputed and does not take into account other types of processors that have real time clocks. In September 1998, Datamation magazine estimated that, on average, about 7 percent are date sensitive and In November 1998, PCWeek, another leading trade journal, put the number at 5 percent. The main emphasis seems to systems with many chips all working on real time clocks such as manufacturing plants. These systems have been estimated at up to 30% not compliant with the Y2K problem. Companies with these systems have had trouble being ready for Y2K because in order to prepare for the problem the affected chips have to be isolated and repaired. In a system with thousands of these chips and little documentation on each one, this is an almost impossible chore. Replacing entire systems can cost millions of dollars and many companies can t afford the cost of the repair. Billions of dollars have been spent preparing for this event already and much more will be spent both before in preparation and after in recovery. Most companies have been addressing the problem for the past few years. An entire industry has opened up just to deal with this problem. In the US most mission critical equipment has already been tested and was either compliant or repaired. The systems that caused most concern were things like power grids, telephone networks, and air and land traffic controllers. Most financial institutions have also dealt with the problem by updating their software and networks to avoid failure at Y2K. With most of these problems resolved in the US, it is other countries that we are then concerned with. In many of the Asian countries progress on solving the Y2K bug is far behind that of the US and many speculate that they will not be ready by the end of the year. This could have a great deal of impact on the world economy if these countries shut down production. Most of Europe has addressed the bug but are behind the US in resolv