Collaborating on the Y2K Problem

On July 13 the nation's leading brokers, stock exchanges and clearinghouses rolled the clocks forward on their computers, past the date Dec. 31, 1999, to see whether the software that handles the trading of stocks, options and bonds was year-2000 compliant. Despite the fact that the test followed a carefully crafted script and involved a small volume of stocks in a fictional trade, it was front-page news in The New York Times.

The strong interest in this limited test stems from the growing belief that Y2K, or the millennium bug, is bound to turn into an uncontrolled virus that could wreak havoc on the global economy. As it becomes more apparent that two-digit dates are widely used in computer systems from Akron to Zimbabwe, alarm is spreading that the response needed to fix software code and computer chips has been two little too late, despite the fact that we've known about the problem for years.

Pessimists -- such as Edward Yardeni, chief economist of Deutsche Bank Securities -- are predicting a worldwide recession beginning in 2000 because of Y2K. They point to a number of estimates, such as the one showing only 8 percent of German firms have a formal plan to deal with Y2K compared to 80 percent in the United States. Analysts also emphasize the fact that many countries in Latin America, Africa and parts of Asia appear to be ignoring the problem altogether.

Meanwhile, parts of the U.S. government sector may feel confident that it has begun work in earnest on the problem, with many federal and state agencies projecting full compliance well ahead of the deadline. Large urban cities and counties also report having the problem in hand and expect to see the millennium arrive with only minor glitches at best.

However, the public sector also has its own "Third World" problem relating to Y2K. Recent surveys show that as many as two-thirds of U.S. cities and counties have not taken the necessary steps to avoid the problems of a Y2K meltdown. Just as bad, large jurisdictions, which have major efforts under way, report that schools, hospitals, banks and innumerable small businesses have done little to become Y2K compliant.

With less than 18 months to go before the date change occurs, the window of time left to fix the bug has become extremely small. If ever there was a need for intergovernmental cooperation and public/private partnerships, it is now. Too many small and midsize jurisdictions don't believe the problem will affect them or that there's little they can do. That kind of attitude among government officials can be contagious, affecting businesses and nonprofit organizations as well.

Yes, big government agencies, major financial firms, such as Citibank, and high-tech behemoths, such as Hewlett-Packard, will make it through the worst aspects of Y2K. But many small businesses will not survive if forced to shut down for days or weeks. Small local governments also face the prospect of crippled service delivery if their computers and embedded chips aren't compliant.

So who's taking the bull by the horns and pushing for a collaborative approach to dealing with Y2K? The federal government has offered little leadership on this spreading problem. The White House and Congress seem intent on scoring political points by issuing press releases with widely different views on the readiness of federal-agency computers. State governments have made progress with their own systems, but they have ignored, to a large extent, the problems faced by local communities.

Local governments, somewhat belatedly, have begun to realize that their own communities and the ones next door are ill-equipped to deal with Y2K, and they are organizing collaborative approaches to fixing lines of software code. For example, the city of Phoenix has been meeting