A friend sent this to me from the Lowell Y2K site. While it is pretty dry reading in parts, it is an interesting analysis of the Y2K scene now in global terms from some one who is studying the scene

>Interesting article written up by Jon Huntress: > >=========== Y2K and "Non-Cooperative" Behavior with Martyn Emery > >Chicago was a good conference and there was a lot of valuable >material presented. One of the best presentations was a >session by Martyn Emery. > >Martyn Emery is the founder and CEO of Corporation 2000 Inc. >and Fellow of the Business Continuity Institute and one of >the leading authorities in the world in understanding the >global implications of the Year 2000 crisis. His work on >city infrastructure analysis is used by governments and >corporations throughout the world. > >The title of the talk, "Y2K Strategic Simulations" seems >fairly dry but this was a very interesting presentation >because it showed that we really do not know what is going >to happen with the problems that are expected to arise in a >few months. And there will be problems, some of them major. >We know that there are countries that have done very little >to fix their computers and that some of their basic >functions, such as communications and even customs, probably >won't work for some period of time. We also know that many >businesses around the world and also here in the U.S. have >not fixed everything, and have not tested their remediated >systems. We can make some educated guesses about what will >break where, but we don't really know. It is relatively >easy to plan for specific infrastructure failures, such as >an outage of electricity or a disruption of gas supplies >and this is why contingency planning is necessary. But how >people will react to changes in their lives is a question >that is much harder to plan for. It is always helpful to >have a plan B, and a plan C too. The alternative is, as my >sister is fond of saying, "When in danger or in doubt, run >in circles, scream and shout." > >Martyn focused on the behavioral dimension of Y2K and he >began his talk by saying that very few people are considering >this aspect. There has been some press on this issue, mainly >focused on whether people will panic or not, and the >potential problems from hackers and viruses created just for >the millennium change. Martyn brought up several other >aspects of this issue that need to be looked at, and some of >them were surprising. > >He mentioned in the beginning that the roll over will happen >during the month of Ramadan, which means that the impact on >the countries where Islam is the dominant religion will be > >different from the rest of the world. Another factor is >that January 1 in Islamic countries is a Saturday, which is >a normal business day and not a holiday. The Islamic >countries will actually be the first in the world to >experience Y2K during a normal business day. > >Martyn sees Y2K less as a survival issue but as a major >competitive issue that will define the major players in the >world economy in the new millennium. There is a diversity >of approaches toward the problem at the corporate, industrial, >country and regional levels and within these levels there is >a complete range of expenditure and achievement of goals. If >there is a number of failures at any of these levels, there >will almost certainly be damage to reputations and investor >confidence. This is an obvious statement, but the massive >worldwide shift to e-business creates a life or death >situation for any loser at any level. He stressed that there >is too much emphasis on January 1 and not enough on the long >term effects. The effects of a disaster linger long after >the event itself, and this will also be the case with year >2000. > >Martyn thinks that if a company or country fails at Y2K, they >will also fail to be a player in the e-commerce revolution, >and knock themselves out of the running for the next decade >or longer. A company wouldn't last that long, but a whole >country could easily lose out to the competitors who finished >early, then cleaned up. If you handle Y2K right, you are very >well positioned for e-commerce and vice-versa. He sees a >single digital currency within the next decade. > >As an example, he pointed to the country of Mauritius in the >Indian Ocean. Mauritius sees Y2K as an opportunity to leap >frog their businesses into the world economy using e-commerce. >They have a government-wide Y2K program that is working very >hard on all aspects of the problem. They are advertising >themselves as a safe haven for money from Southern Europe or >Africa. Mauritius is stockpiling as a contingency and also >to obtain a competitive advantage. > >Reputation is very important around the world and countries >are very sensitive to criticism. He gave the example of >South Africa and Cargill. Cargill is a large US multinational >agricultural company who announced a few months ago that they >would not be trading in South Africa from December 16 to a >month after the roll-over. The South African Government got >right on it and arranged a meeting with Cargill which resulted >in Cargill reversing their decision one day later. But other >countries are not doing well. Martin was in Romania recently >and they had not started their Y2K plan as of late August. > >The views people hold on the issues are firmly entrenched now >and motivation is slipping. This means there is less >flexibility to deal with problems that develop. Martin sees >this as a bigger problem in the US and UK than in the rest of >the world. > >In explaining how he came up with his economic impact ideas, >Martyn covered economic theory, game theory, decision theory, >general equilibrium theory, and mechanism design theory. This >is a very complicated process and gives you a good sense of >why we don't have a good measure of what will actually happen >with Y2K. It isn't that someone is hiding the truth, it is >that nobody knows the truth and we have to use every means at >our disposal to come up with an intelligent guess. Right now, >businesses and governments are considering Y2K to be a >"business as usual" situation. If Y2K is approached from a >different perspective, using a different set of rules, if >business is not, "as usual" the predicted outcomes will >change. These theories were presented as background to show >how he came up with his conclusions. > >The availability of oil is one of the areas of concern and >Martyn gave a summary of the factors that go into making a >decision as to what to do about oil stocks. To begin with, >the oil consumers need to decide who to buy oil from and in >what quantity. Who do they use as contingencies and at what >stage is this decision made? What is the likelihood of >stockpiling and how will that effect the supply? What are >the implications for developing countries? Also, what will >OPEC do? They can change all the rules and the price at a >moment's notice. > >One of Martyn's main points was that in game theory, there >are two behavior types, those who work cooperatively for the >common good, and those who are out for themselves. He set up >a game with the audience, having everyone become partners in >crime with the person sitting next to them. (The crime was >skimming Y2K funds.) Both people then pretend that are >caught and interrogated in separate rooms and offered deals. >Everyone wrote down whether they would accept the deal and >rat on their partner, or not. He asked for our decisions. > >About half the room went against their partner. His point >was that when self interest is factored in, you don't really >know if the person next to you will cooperate for the common >good or not. > >At different times, any individual or corporate entity can >play either role. Martyn expects a lot of non-cooperative >behavior with Y2K and mentioned that one source of this could >very well be banks. He explained that in periods of turmoil, >savvy investors can take advantage and make money. He gave >as an example, an investment officer of a bank borrowing a >billion Lei from Romania a week before the roll-over, then >leaking the information that Romania is expected to have all >kinds of problems with their infrastructure. The value of >the Lei would fall and the bank would need to repay the loan >with much less money. Any kind of turmoil works to the >advantage of some currency traders, especially when they >have a chance to influence the direction of the confusion. > >Can you think of other examples of non-cooperative behavior? > >Martyn's presentation for the New York Conference will be on >the impact of Y2K on the infrastructure of the City of New >York during the roll-over and long term. It should be >another good one. > > >Best practices >Jon Huntress >jon@year2000.com >====================================================

-- Jean Wasp (jean@sonic.net), October 10, 1999