Economic Consequence Of Y2k Bug Essay, Research Paper
The Year 2000 Bug As the millenary approaches we come closer and closer to what some say could intend the terminal of civilisation as we know it. What is this great event that would hold such an impact on the universe that it could stop civilisation? The job is a simple computing machine bug refereed to as the Y2K bug but its branchings could be huge. This computing machine bug has been predicted to impact the universe anyplace from a minor job to the terminal of a civilisation. Whichever position you take on the topic it is clear that this bug will hold a definite impact on the economic system. The deepness of this impact is yet to be determined but by looking at what can realistically go on as a consequence of this bug and by looking at state of affairss that have upset the economic system in the yesteryear it will give us a better expression at what may go on. In order to understand the Y2K bug we must foremost understand what it is. For many old ages electronic storage was really expensive. In the early yearss of calculating a Megabyte or a million bytes of information could hold cost up to $ 100,000 to hive away electronically. This same sum of information storage can now be about 10 cents. Because of this expensive storage restriction codification written for these older computing machines was compressed in any manner possible. One manner to cut down the size of codification was to compact day of the months to a format merely six characters long. So alternatively of April 14 1999 the day of the month would be compressed to 4/14/99. At the clip of this scheduling this seemed to be the best solution to the infinite salvaging quandary. As we come nearer to the millenary we see that this manner of scheduling was a great overlook of coders. Assuming that the machines would non still be working in the twelvemonth 2000, coders did non see this as a job. Now that the twelvemonth is nearing there are a great trade more of these machines around so anyone of all time would hold thought. This poses a job because when the last two figures of the twelvemonth subdivision of the day of the month axial rotation about to 00 the computing machine will believe that the twelvemonth is 1900 because it merely assumed that the first two figures are 19. At first glimpse this job seems to be minor but at a deeper expression we can see that this Y2K bug can do a great trade of mayhem with our computing machine systems. Many plans that are day of the month sensitive will respond to this bug in a negative manner. A good illustration of a job that could happen due to the bug would be that of banking package. In that instance one of the package s maps would be to measure all of its clients with outstanding loans. This plan works by directing the measure increasingly every month until the loan is paid away. If the computing machine were to believe that it was the twelvemonth 1900 so none of these loans would hold even been made yet and the computing machine would go unstable or cease to map. Much of this package can be repaired or replaced with new versions, nevertheless, some of it is non as easy replaced. A great trade of the codification that is doing concern at the minute is really imbedded in machine-controlled machinery. This codification can t be repaired, except by replacing the machinery itself. This codification is in many of the machines that run companies, public utilities, and are even in our places in such contraptions as VCRs. Estimates of the effects of these embedded french friess vary a great trade and no 1 truly knows how the Y2K Bug will really impact many of these french friess. Harmonizing to the Gartner Group in a recent survey merely 1 in 100,000 microcontrollers would be affected. This survey nevertheless, is widely disputed and does non take into history other types of processors that have existent clip redstem storksbills. In September 1998, Datamation magazine estimated that, on norm, about 7 per centum are day of the month sensitive and In November 1998, PCWeek, another taking trade diary, put the figure at 5 per centum. The chief accent seems to systems with many french friess all working on existent clip redstem storksbills such as fabrication workss. These systems have been estimated at up to 30 % non compliant with the Y2K job. Companies with these systems have had problem being ready for Y2K because in order to fix for the job the affected french friess have to be isolated and repaired. In a system with 1000s of these french friess and small certification on each one, this is an about impossible job. Replacing full systems can be 1000000s of dollars and many companies can t afford the cost of the fix. Billions of dollars have been spent fixing for this event already and much more will be spent both before in readying and after in recovery. Most companies have been turn toing the job for the past few old ages. An full industry has opened up merely to cover with this job. 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 webs, and air and land traffic accountants. Most fiscal establishments have besides dealt with the job by updating their package and webs to avoid failure at Y2K. With most of these jobs resolved in the US, it is other states that we are so concerned with. In many of the Asiatic states advancement on work outing the Y2K bug is far behind that of the US and many speculate that they will non be ready by the terminal of the twelvemonth. This could hold a great trade of impact on the universe economic system if these states shut down production. Most of Europe has addressed the bug but are behind the US in deciding the job. If things like power grids or oil workss were to misfunction it could disenable a state and all but stop production, import and export. If this were to go on several states it could greatly impact the full universe because of the deficiency of goods that state provides. Another cardinal issue that could hold planetary branchings is the issue of transit. Many of the ships that carry cargo around the universe usage microcontrollers and satellite communicating to make its finish. It has been reported that Satellites could be affected and perchance fall out of orbit doing a ship s pilotage system to neglect. This could do universe trade pandemonium holding even the states that were prepared for Y2K. Air traffic accountants have besides been capable to a great trade of proving for fright that radio detection and ranging and other navigational systems could misfunction doing clangs. Since oil refineries and Wellss are besides run on embedded systems they could besides lose some or all production doing a fuel deficit that would all but stop trade. This deficiency of transit could take to famine and nutrient deficits all over the universe. The cos
T of fixing for the Y2K bug has been estimated anyplace from the conservative estimation of $ 200 Billion to the Gardner Group s Estimate of over $ 600 Billion. This initial cost is the first impact that the bug will hold on the economic system. This cost will hold a big impact on the net incomes of these companies for the following twelvemonth or so and this will be the first issue ensuing from Y2K that could impact stock monetary values. Many little and average sized companies do non hold the resorts to cover with the Y2K bug and some are projecting that a big per centum of these companies will neglect when they are hit with everything from fabricating jobs to accounting crisis for the Y2K bug. With the loss of smaller companies comes the loss of occupations and could convey the economic system farther down.
No 1 can deny that there will be economic break as a consequence of Y2K. The stock market will most likely take a large hit and perchance clang. For the most portion the computing machines for the market have been repaired, thanks to a clang in 1998 that brought the New York Stock Exchange down for a few hours due to a Y2K job. But even if the market continues to work it will reflect the province of a really unstable planetary economic system. For a figure of old ages the US has been sing a bull market and a great trade of economic growing. As we have late seen with the markets of many Asiatic states, the market is volatile in times of crisis. With already slouching net incomes from Y2K fix, a company that loses half its investors due to a millenary terror and production is slowed or halted because of foreign trade jobs, will hold small opportunity of doing it into the following millenary. If markets across the Earth clang so a planetary economic slack, or worse a depression, is highly probable.Panic besides plays a portion in the job of the Y2K bug. Because the Federal modesty foresees many Americans liquefying assets and retreating hard currency from Bankss, it has decided to publish an excess $ 200 Billion in currency to provide Bankss with adequate money to run into a turning demand. Many Bankss fear that this terror will merely escalate the state of affairs because it will stultify the economic system if a great trade of people take their money out of investings such as stocks, bonds, 401Ks, and common financess. Even if there were absolute minimal effects form the Y2K bug itself, the deficiency in consumer assurance could do a great trade of jobs for the economic system. Experts are afraid that companies will non be able to cover with jobs that arise from the Y2K bug because they lack the support that would hold come from public investing. The rise of many survivalist groups and merchandises add strength to the public fright of a doomsday result. Many economic experts say that the stock market is presently inflated more than it is deserving and is headed for a set back regardless of Y2K. The Dow Jones had a recent milepost of hitting the 10,000-point grade and the market in general has gained 50 % in value in the last two old ages entirely. Under these conditions the market seems to be really unstable and in visible radiation of jobs that could be originating it could be in for a great trade of alteration. The US is the lone universe market that has expanded so greatly in the last few old ages and if it takes a big reverse the remainder of the universe is certain to take an even greater reverse. Consumer terror could be farther fueled if and mission critical systems cease to run on January 1st. Harmonizing to new informations revealed by astrological scientists, the Earth could besides be sing solar genius around the clip of the New Year. Solar genius can do a break in satellite communications. This phenomenon occurred this twelvemonth doing cellular phones and beepers in southern California inoperable of a figure of yearss. Some scientists feel that solar genius could do terror because it is scheduled to happen so near to the millenary. If people lose their communicating devices it may arouse pandemonium. Harmonizing to Michael Hyatt, writer of The Millennium Bug, the best instance scenario would be what he calls a blackout. He states that the phones would travel down, the power would be temporarily out, infirmary & # 8217 ; s equipment would misfunction, and it would get down a recession. Although many consider Hyatt to be an extremist on the affair, he may be non to far off. Regardless of conditions or non Hyatt is right in his appraisal it is clear that we need to be ready for something. One of the latest warnings to the populace by media has to make with cases that may stack up after the Y2K bug has done its harm. Some experts are gauging the moving ridge of cases to be so great that the tribunals are jammed for old ages seeking to decide them. One estimation states that it could be every bit much as $ 1 trillion dollars in amendss that are claimed due to the bug. The cost of this judicial proceeding would merely increase whatever economic jobs the US was confronting. If American consumer assurance is lost due to any or all of these factors the effects could be black. The Y2K bug could easy do a planetary catastrophe with more desolation than the universe has of all time seen. While it seems that the bug can be handled in a technological facet, it may be excessively late for the economic system. Survivalists are carrying nutrient and more and more people are get downing to worry about the hereafter. The following two old ages have the possible to be the most economically critical clip we have of all time seen. Though our authorities is presently doing readying for the event, no 1 knows how much readying is necessary. As we approach the new millenary many of us do it with apprehensiveness and fright. Hopefully we are incorrect. Bibliography Lauren Gibbons Paul, Y2K, September 1998, Datamation magazine Mitch Ratcliffe, Wall Street systems mended hypertext transfer protocol: //www.zdnet.com/enterprise/zdy2k/stories/0,6158,2241015,00.html PCWeek Magazine April 13, 1999 Michael Hyatt, Michael Hyatt s Y2K Survival resources www.MichaelHyatt.com [ 4/2/99 ] Michael Hyatt, The Millennium Bug: How to Survive the Coming Chaos ( Regnery, 1998 ) S.C. Gwynne, Time Magazine Cover Story, Trouble abroad threatens the U.S. economic system [ Sept. 9, 1998 ] Adam Cohen, The Y2K Bug Goes to Court APRIL 19, 1999 VOL. 153 NO. 15 HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHTSubcommittee on Government Management, Information and Technology Field Hearing on Year 2000 EffortsSeptember 3, 1998 Chicago, IllinoisTestimony of David C. Hall, Senior Consultant, CARA Corporation Alan Levin, FAA flies through Y2K trial USA TODAY 4/12/99 STEPHEN BARR, Y2K deadline is met, largely Washington Post News Service Monday, April 5, 1999 Tim Dobbyn, U.S. air traffic computing machines get Y2K trial Reuters April 2, 1999 5:09 AM PT