Asia's future/Our Tech Problemgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Anna McKay Ginn brought up a great point on another thread which has really been bothering me, even prior to the post. She wrote;
"If this company stays in business it will be a minor miracle. IF they can get their hardware and software compliant they still have a problem with their suppliers from Asia. That is where they get 99% of their supplies."
Most of us know about the shortage of programmers and the battle to keep the quality people from migrating to other projects or employers.
What happens as Asian suppliers suffer from both economic problems and y2k problems. The tech industries are already suffering. Ram prices are already moving up. If this trend continues then soon every aspect of computing with regard to supplies, PC prices, etc. will either inflate to the point where most small businesses and individuals won't be able to afford to remediate or the shortages caused by y2k related closures in the tech industries overseas will simply kill the supply all together.
And, to further the problem, I would think that many chips used as replacements in embedded systems would be affected by both increased cost and lack of supply. Further, there could be a problem with meeting demand in time as the panic for remediation begins and production either can't keep up, slows because of y2k problems, or suffers from economic turmoil.
More just in time, supply and demand worries. Can anyone set my mind at ease?
-- Michael Taylor (firstname.lastname@example.org), October 13, 1998
Most of the older embedded chips are pretty easy to make. Thats why they only cost a couple of dollars. Intel has been pushing the Pentium as an embedded controller - don't know how much success they have been having. It sure is fast enough and has 8k of ram on the chip - but I wonder about the support chips and whether or not they are flexible enough to really do general purpose controller operations.
-- Paul Davis (email@example.com), October 14, 1998.
After a recent post, I received an extraordinary amount of mail. The lack of information from Japan was disconcerting to many and I'll try to get more news out in the future. I live and work in Japan with one of the world's largest companies. Last week I was in the office of the man responsible for for the enterprise systems for the global web of factories of an electronics giant. He waved his arm at the massive room full of programmers and said, "All these people are writing software that won't run after the year 2000. They just don't know it."
On the other hand, two recent articles in Japanese magazines state that the Japanese discovered the y2k problem in the 1980's and have been remediating for years as part of their maintenance and upgrading programs. The magazines are serious IT magazines and that went on to state that some banks deliberately misled western banks to hide their long-range remediation plans. An IBM (Japan) executive was quoted saying that (I must paraphrase the translation) it is obvious that U.S. systems engineers are less organized /efficient than Japanese IT people. The gist of the article was that Japan leads the world in y2k preparedness and the reports of Japan's demise from y2k by western consultants and bond rating services are greatly exaggerated.
Now, back to the other hand again, since Japanese corporate and social structure dictates that job positions are based on age, not ability, top IT managers began their careers in the accounting department. If you are old enough to remember, computers used numbers and accountants used numbers, so fledgling computer departments in the 1970's were managed by accountants. Today, their grasp of manufacturing is limited, particularly in Japan where vertical ascension follows a very tight corridor of specialization. Do you remember the manager in the first paragraph? I asked him how the factory automation and facilities were progressing with embedded systems. He asked me what embedded systems are.
Back to the other hand again, the published general results of recent survey indicate that 70% of Japanese manufacturers completed remediation July , 1998. That's right, 70% were finished 3 months ago. So, there you have it. Japan leads the way. Japan is poised to conquer the world as the only industrialized nation with the ability to smoothly produce goods and services plus collect and dispense money in about 14 months from now - according to the survey.
I'll have an English web site (from Japan) up in about one week. If you are interested in some insights into the current financial crisis, the y2k situation, trends and cultural explanations to better understand the impact the world's 2nd largest economy has on you, send me an email and I'll let you know the address when it's
-- PNG (firstname.lastname@example.org), October 14, 1998.
I wouldn't be surprised. Our company has branches all over the world. I work at the headquarters and sales data from all different countries is sent here to be processed. We perform a variety of edits on the data, and the only data that comes through 100% clean is what comes from Japan. It must be nice to have that kind of work ethic.
-- Amy Leone (email@example.com), October 14, 1998.
Take a look at some of the social stats from Japan before you compliment them too much. A few years back I was in constant arguements with folks who wanted us to copy a lot of Japanese social stuff. I really don't want my kids to have their future determined by age 5, or to live in a country with the Japanese suicide rate (esp. among teens), or to worry about a socialist party that has nearly 30% of the vote sewed up tight and has gained ground in every election for many years! Japan has plenty of warts, they just refuse to talk about them in any forum where ganji might overhear.
-- Paul Davis (firstname.lastname@example.org), October 16, 1998.
Sorry Paul. I should have put "...- according to the survey." in quotes to illustrate the smirk on my face at the time I wrote it.
Having seen your postings (and noted our similar age), I know you are thoughtful and informed. Just as the nuance of my words didn't register with you, the nuances of Japan don't register with the business, financial, and government decision makers who shape the policies that bind our global fortunes and failures.
I live in Japan. I don't live within the isolated compound of an embassy or behind the "Virtual America" fortress gates of a U.S. base. I live in Japan. The first words out of my mouth every morning and the last words every night are spoken in Japanese. It took me five years of living in the culture and walking the halls, factories and offices of Japan before I began to understand the layer upon layer of forces that motivate and drive the decision-making process of a homogeneous society insulated from the world for thousands of years. Only by clearly understanding the motivations of an entity, can a skilled business or government negotiator appeal to those motivations in their strategy.
One of the most disappointing experiences I've had in Japan was a conversation with a former U.S. Ambassador to Japan just prior to his return. This man had learned nothing during his term. Ambassadors are supported with insight from learned analysts, specialists and advisors. He was an unarmed man in a battle of wits.
Back to the topic. My basic premise is that Japan is not the leader in y2k remediation. The U.S. is not the leader in y2k remediation. We live in a borderless economy. There are no leaders and no laggards. We are bound together like the catch of a drift net.
Dolphin-Safe Tuna and y2k
Public relations can be a wonderful thing, if you're a dolphin. The sensitivity of the American and European public was aroused by the video-taped evidence of dolphins caught in the nets of tuna fishing fleets. Western people were aghast to see these intelligent, cute and sophisticated mammals treated with such indignity. They could relate to these beautiful animals...everyone remembers "Flipper." So, now we have cans of tuna with a cute little "Dolphin-Safe" label and everyone feels much better.
Has anybody ever verified that Star-Kissed tuna is "Dolphin-Safe?" What did they do to make it "Dolphin-Safe?" Did they put up little "Warning: Dolphins Keep out" signs near the schools of tuna? Did they give the fishermen "Dolphin Sensitivity Training?" Did the fishing industry upgrade to some high-tech, computerized net that only catches tuna? Are these nets y2k compliant? Are there any embedded chips in these nets? What about this "Fish and Chips" story? (Sorry)
The greater question is: What about the tuna?
The G-7 nations believe that they are like the intelligent, sophisticated and cute dolphins that must be nurtured and protected. Everyone else is tuna. "Look honey, this is 'Dolphin-Safe' tuna. Isn't that wonderful?" (Munch...Munch)
The dolphins get caught in the tuna nets because they are having tuna for lunch. The G-7 dolphins have created a sophisticated network of distribution that has driven parts manufacturing and assembly further and further down the food chain in the constant drive to reduce costs. If you think the margins of a global manufacturer are slim, check out the margins of a small machine shop in Malaysia.
K-Mart and Wal-Mart are having a price war. Isn't that great? Global manufacturers opened factories in Asian (tuna) countries at a furious pace and taught local vendors the joys of price wars and competitive bidding. The small, local machine shops and parts suppliers winning the business from these manufacturers were the lowest bidders in the poorest countries. The quality of the parts is strictly controlled and the price is continually beaten down by the latest price war in some far off place called Arkansas.
There is always another vendor more desperate for the business so the squeeze continues. As currency exchange and production rates shifted, it became more profitable to move some production back to Japan to keep Japanese (dolphin) workers employed. A 3% difference in production cost (caused by the currency speculation of some young hot-shot dolphin in New York - using other peoples money) can equate to a loss of market share for the manufacturer selling products to a buyer in Arkansas. The loss of market share changes the economies of scale for the product and requires moving more production back to Japan. The cycle begins. The promise of a brighter future for these "emerging economies" became a cruel hoax. They are tuna.
Over a year ago, the Japanese proposed creating an international fund to provide quick response to wild swings in currency exchange rates. They forsaw potentially devastating effects from large, high risk, speculative funds. The idea was ignored in Washington D.C. "We are the cleverest of all dolphins. We know what we're doing with derivatives, hedge funds and currency funds. You guys are acting like tuna." The idea has resurfaced as an original idea by Treasury Secretary Rubin.
The melt down in Asia (tuna melt...sorry) was caused by the sophisticated and clever dolphins "managing" other peoples money. Going to the racetrack and betting other peoples money is a great life. They never lose. They read their "Racing Form" ("The Wall Street Journal"), check their tip sheets (newsletters), study the jockey (CEO), and after all is said and done, on average, they "manage" worse than a monkey drawing marks on the stock listing page. The irony here is that the tuna will probably not be affected as much by y2k failures as the dolphins will. The dolphin lifestyle may have to change more than the tuna lifestyle.
My apologies to The Gartner Group, but predictions of catastrophic y2k effects everywhere (except the U.S.) are not reasonable. Who are these guys anyway? What is their track record of predicting significant events? How many times have they been correct in their previous predictions?
One half of the population of the Earth has yet to make a telephone call, let alone use an ATM card. How will they be affected by y2k? They don't have stay awake at night worrying about the 70 embedded chips they encounter before noon everyday - I believe this is a Gartner Group statistic. Thanks guys. Most of the population are tuna. I used to pity them, now I envy them.
The Earth keeps spinning and orbiting our Star. Our decision to create units of time got us into this mess. Perhaps we can blame Augustus and Julius Ceasar for changing their calendar to add July and August in the hope of becoming immortal. Perhaps the inhabitants of Earth will blame the minor religion of Christianity for imposing its calendar ? Interesting concept...people quoting apocalyptic passages from the New Testament and linking it to y2k. Didn't their guy start this problem - 2000 AD? Perhaps the Vatican will locate his birth certificate and discover he was conveniently born 28 years earlier...
Forecasting the effects of y2k is like playing a dicey game of chance - with the rules of the game constantly changing. How reliable are polls and predictions 13 months before an election? Our circumstances change daily. Our knowledge changes daily. I believe our view of the world will be different six months from now.
I believe the financial crisis about to unfold will have a greater impact on the world economy than y2k. I'm not saying that y2k isn't big, its very big. But, this is bigger. I believe Mr. Greenspan may have gone to see the movie "Deep Impact" and realized that the wave about to hit New York is the massive debt of Japan.
Think about this for a moment...the total debt of the U.S. is about 30% of GDP. The total debt of Japan is 140% of GDP. That's the good news. Wait until you hear the bad news.
Foreign market analysts think that the Japanese financial bailout package and pump-priming legislation is finished. That belief is "irrational excuberance." Once again, the analysts are unarmed men in a battle of wits. It has a fundamental flaw. Mr. Greenspan and the Fed understand the flaw. They understand that it cannot be imlemented in its present form.
Would you like to know why? Ask the Gartner Group - only kidding. I'll tell you before Tuesday.
In the meantime, the stunning collapse of a major, and I mean big, financial institution could occur between October 20th and November 2nd. The odds of collapse increase after November 2nd.
Well, I'm going to go make a dolphin sandwich. P.S. I thi
-- PNG (email@example.com), October 18, 1998.
PNG, you said, "I believe the financial crisis about to unfold will have a greater impact on the world economy than y2k. I'm not saying that y2k isn't big, its very big. But, this is bigger." I agree with you. But, WHY did you leave us hanging about the other? Don't you know we have ENOUGH suspense in our lives already? :-)
-- Gayla Dunbar (firstname.lastname@example.org), October 18, 1998.
Another excellent post. Thank you.
Quick point about "Dolphin Safe" tuna... this is *suppose* to be large "Fancy Albacore Tuna", caught by line and not net. At least, that's the marketing. Do I believe it? No. But it sells tuna. I can't wait to see how you might use the metaphor for Tuna getting caught by line and reeled in, slowly...in absolute panic, knowing the end is near.
I agree with you. I think that the economic climate today will be far more impactful than y2k. I think that we're in a calm just before the economic hurricane hits here in the U.S. and our arrogant, power yerning "powers that be" are simply trying to use old theories in a new kind of global economy. The only way that we will learn from what has happened is to actually suffer through it. The fact is that the suffering is happening all around us and somehow our government thinks they can isolate us.
I've thought all along, also, that by the end of this month or the middle of next the collapse would begin.
So, by the time y2k disruptions occur we will be different people who live in a new reality where the fragile nature of the inter-connected world has become painfully obvious.
And, this economic collapse will only further the difficulties of y2k remediation and testing in every way. "They" let it go too long and didn't contemplate the changes that might occur before the dates started to decay in the system.
Thank you PNG. Would you please continue to give us further updates? ______________________________________________________
-- Michael Taylor (email@example.com), October 18, 1998.