FIVE MONTHS AND COUNTING...

	July 27, 1999
	Economics correspondent Paul Solman of WGBH, Boston, provides an update of the Y2K and potential computer problems.

JIM LEHRER: Our economics correspondent Paul Solman of WGBH-Boston has the Y2K story. PAUL SOLMAN: With the year 2000 now just months away, for some, fears of the Y2K computer bug seem to be growing out of all proportion to reality. There are people getting guns, moving to the wilderness, preparing for the breakdown of society. But we're here at Boston's Computer Museum because this isn't a story about the panicky. Instead, we wanted to talk to those sober souls who are trying to solve the Y2K problem, the people whose job it is to get inside the old computer systems, find the Y2K bug and fix it. And what they told us was genuinely surprising. Before the surprise, though, a quick cram session on Y2K for those who still don't get it. At Primeon outside Boston, Carl Giallombardo showed us an actual line of computer code. PAUL SOLMAN: Show us the year 2000 problem. CARL GIALLOMBARDO, VP Consulting Services, Primeon: This is a line of code. And what it's doing here is taking a date that happens to be a two- digit date and storing it in another location. It is always adding 1900 to the year. So whether or not the year is 02 or 95, it will always be 1902 or 1995. The individual who wrote this piece of code assumed that you would always add 1900. PAUL SOLMAN: And so the problem is, when you start adding 01 or 02, it thinks it's 1901 and 1902 as opposed to 2001, 2002. CARL GIALLOMBARDO: That's right, and then when the information is used later in the program, it will be used incorrectly. PAUL SOLMAN: So a program that deletes old data might wipe out all new entries starting January 1st, thinking they are 100 years out of date. Throughout billions of lines of code, the dates are hidden. It takes human and automated sleuthing line by line of every single computer program to find and fix every single two-digit date. The total projected tab: $600 billion in the U.S. alone. And so a whole industry has grown up to ward off the catastrophes of power failures, missile mishaps, market meltdowns. But here's where the surprises start. The cyber sleuths we talked to say we may be focusing on the wrong date. In fact, they told us the real problem may not come on New Year's Day, but afterwards. Systems might keep working but start putting out bad data and no one will realize that it's because the computer thought the date was 1900, and, for example, started using the interest rate of 1900 for the bonds in your pension fund. Tim Cho, who runs Reasoning, Silicon Valley Y2K firm, talked to us by remote. TIM CHO: So what we may ultimately see actually is a corrosive effect moving through the first couple of months of the year where bad data's calculated, bad data's stored, bad data's used, and suddenly, maybe on March 1st, you're staring at a report and wondering, "well, how come this capsulation is wrong? What's going on here?" PAUL SOLMAN: Thus, Y2K could put subtle errors into your pension fund, bank account, bills, requiring real vigilance by all of us to closely check what comes in the mail. Okay, so maybe we should worry more about the lingering Y2K problems hidden in giant computer systems than one big crash. But after all the talk of Y2K apocalypse, such problems wouldn't be the end of the world. And that may explain why some experts are now viewing Y2K not as a crisis, but an opportunity with actual competitive advantages for the highly computerized US economy. CARL GIALLOMBARDO: Folks who have gone through the Y2K process, I think, it has been a real great learning experience. Firms suddenly have a complete picture of their systems world where before they didn't really understand it. TIM CHO: Time and time again when we talk to senior managers in all these major companies, they actually do not view Y2K as a thing that's been bad. It's been a thing that's brought everybody's level of understanding, level of appreciation, up a huge step, particularly into senior management's ranks. PAUL SOLMAN: In other words, say the bug hunters, Y2K has been a spur for US firms to think about, organize, and modernize their computer stems. MIT Economist Lester Thurow agrees. LESTER THUROW: I think Y2K is a positive even if there wasn't going to be a Y2K problem, because it forces you to go through your computer systems, straighten them up, and people, of course, didn't just replace Y2K. They did a lot of improvements. PAUL SOLMAN: We ran into another possible Y2K plus at the Massachusetts statehouse. STATE SENATOR SUSAN FARGO, Massachusetts: Hi there. PAUL SOLMAN: State Senator Susan Fargo has been helping cities and towns cope with Y2K. PAUL SOLMAN: As we've been doing this story, we've been hearing people more and more say that Y2K might, in fact, be good for the American economy. Does that sound silly to you? STATE SENATOR SUSAN FARGO: Not at all. Actually I've been thinking about it more from a community-based point of view, that as towns pull together to confront this whatever, time -- ticking time bomb, that they may develop some resources within the community they didn't know they had. PAUL SOLMAN: Fargo says towns in her area, like Concord, Massachusetts, are using Y2K as a training ground for any emergency-- earthquake, flood. They are finding out who in town can do what if public service or utilities were to fail. STATE SENATOR SUSAN FARGO: You may have somebody in the neighbor hood who's really good at chopping wood, and you may have people that are doctors in the area. Kids are terrific at resolving computer issues. PAUL SOLMAN: In the process, says Fargo, America might again feel the stirrings of community. STATE SENATOR SUSAN FARGO: I mean, I would compare it perhaps to World War II, when people on the home front pulled together and everybody pitched in. PAUL SOLMAN: So Y2K could benefit US companies, communities, and also, some experts now say, the work force, because the US, already ahead in computer innovation, has used Y2K to speed the recruitment of the globe's top high-tech talent. SPOKESMAN: Let me show you some of the programming staff that works here at Primeon. Robert Yang has a Ph.D. from Chinghua University and was a professor at Chinghua for ten years. Jason [Zhicheng] Shi is the manager of year 2000 development. Jason has two Ph.D.'s. Lu Sun is a project manager, has a Masters in Computer Science from Cinghua University, and ended up number two in his class. His wife ended up number one. PAUL SOLMAN: Primeon itself was founded by Fred Wang, a member of China's crème de la crème Class of '77, the first class to enter the reopened colleges after Mao closed them during the cultural revolution and sent students out into the fields. Wang scored higher than-- get this-- some 200 million potential college applicants. Just to get his spot at one of China's top engineering schools, he was one in 10,000. He has recruited his fellow best and brightest. PAUL SOLMAN: This really the very smartest of the computer people in china that have you here? FRED WANG: Yes, I'm sure. Yeah, we have about ten Ph.D.'s and professors. Yeah, it's a very, very-- I mean, they are like a superstar. PAUL SOLMAN: Superstars like Fred Wang and his top classmates. JAMES DONOHUE, Vice President, Human Resources, Primeon: Getting people of Fred's quality to do this kind of work in the US is just about impossible. Y2K is not a glamorous business. The Internet's the glamorous business these days. And to go in and basically spend your time cleaning up "other people's messes" when you could be working on Internet and E-commerce type of situations may put you in a big competitive disadvantage. You can't hire people of that quality to do Y2K. PAUL SOLMAN: Americans won't do it? JAMES DONOHUE: That's right. PAUL SOLMAN: But the Chinese will. JAMES DONOHUE: That's right. PAUL SOLMAN: To most economists, immigrants are a huge plus for the US economy. LESTER THUROW: There is no question about it, if you look at immigrants, they've got more get up and go because we know that, right? They got up and went. It's a big advantage when, hey, you can get a fully trained, let's say, computer software engineer to migrate to the United States. That's a plus-plus, right? We don't have to pay for the education and we get the benefits. PAUL SOLMAN: We get the benefits. Well, not all of us. Not, for instance, older programmers like John Nimmo, relics in the youth-oriented computer industry. Y2K, it was said, would put them back to work fixing the programs they had written way back when. JOHN NIMMO, Computer Programmer: Well, I certainly thought that this was going to be an opportunity to go back to work full-time. PAUL SOLMAN: Nimmo was a top guided missile programmer in the 1960's. By the 1980's, he was considered obsolete. JOHN NIMMO: I applied to over 500 places. I sent out somewhere between 500 and 600 resumes, and I was interviewed in about 35 places, 35 or 40 places, and never received an offer. PAUL SOLMAN: Because? JOHN NIMMO: Well, I had to presume it was because of my age. What they're doing is they're hiring people outside of the country and these people have masters degrees in computer science and they do understand the field, but they're willing to work for half price. So you run a company and you want to increase the bottom line, you know, improve profits for your shareholder ? You're not going to hire me at $70,000, $80,000 a year. You're going to hire some guy from another country who is willing to work for $40,000 and he's probably just as capable as I am. PAUL SOLMAN: For out-to-pasture programmers then, Y2K may have been a minus, a false hope of jobs that were filled by immigrants and younger programmers for whom Y2K has been a blessing. So, after all these twists and turns, what's the bottom line on Y2K? Well, $600 billion is one heck of a repair bill, even if you re upgrading in the process. But if there turns out to be a Y2K crisis, many experts believe that America, by spending so much, will emerge a lot better off than the rest of the world, and that whatever happens, in terms of overall economic efficiency, Y2K will have improved US computer systems, US computer consciousness, the US computer workforce. Amidst visions of catastrophe, it's at least a potentially comforting thought.