Those Who Predict the Future Are Doomed to Repeat It

by Victor Rozek

Since life is an unpredictable blend of the serious and the silly, it is fitting that the future of IT be examined through both the sober and the satirical end of the predicting scope. And although skeptics claim that predictions are notoriously inaccurate, it must be pointed out that skeptics themselves have been known to err on occasion. No less a notable than Ken Olson, president of Digital Equipment Corp., creator of the VAX midrange computer, which the IBM midrange is a reaction against, once opined that "there is no need for any individual to have a computer in their home."

Well, since I have several computers in my home, I figure I've got at least as good a shot at predicting the future as your average CEO. Maybe better. So, with equal parts caution and hard-earned humility, I peer through the serious end of the scope, and see an IT future that looks--not so great. But then again, it looks no less great than the future of most other economic sectors.

The Serious Side

"I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year."

--Editor in charge of business books for Prentice Hall, 1957

The demise of IT was then, and is now, premature. This industry is nothing if not innovative, and its ability to reinvent itself and to spread with the vehemence of a digital cancer across the face of the globe means that, like the striving middle class, it will always be with us. That's a summary of the good news. Of greater concern is that, just like the striving middle class, IT is not immune to economic realities. As a support function, IT will sink or swim with the rest of the economy, so the larger question is, what will the economy do?

We know the economy is iffy, and two things will keep it in a state of uncertainty for the foreseeable future. The first is the threat of terrorist disruption. We saw its impacts after Sept. 11, when people quit flying. In a highly integrated economy, a malady affecting a single sector has an inescapable domino effect. Thus, when non-essential airline travel was sharply curtailed, related industries, such as tourism, also suffered, as did the many suppliers to the airline industry. For that matter, the airlines themselves have not yet recovered, and bankruptcy protection is now a favored destination.

Since we have been repeatedly told that further onslaughts are either likely or imminent, imagine, for example, the economic impact of coordinated terrorist attacks on major shopping malls: terrified shoppers staying home by the millions, manufacturers, distributors, advertisers, and retail outlets feeling the economic pinch. They would predictably respond by laying-off workers, which, in turn, would leave even fewer people with discretionary income. Since IT is not a profit center, chances are that under such circumstances, as part of a general belt-tightening effort, IT budgets would be cut, development would be curtailed, workers would be laid-off, and low-cost labor remedies would be pursued.

If the economy is disrupted by external forces, the level of IT activity will shrink in proportion to the disruption, with the possible exception of IT operations within the government and military sectors, where spending will remain robust.

But even if we are spared a terrorist attack, the nation's unprecedented deficit, huge and growing, will exact an economic toll. The government is now in the business of borrowing money--colossal amounts of it: $147 billion in the first quarter of next year alone--and it is competing for available funds against the private sector. Since the money supply is finite, and too many hands are reaching for it, inflation will be the natural consequence. The cost of money will go up, and the price of everything else right along with it. And since so much cheap labor is available overseas, domestic salaries will be unlikely to keep pace with inflation. IT is particularly vulnerable to inflation because outsourcing is established and growing, and is regarded as a hedge against rising labor costs. So, to the degree that inflation threatens to push up salaries, it will also push out jobs.

If the good news is that more tax cuts are on the way, the bad news is that they are unlikely to offset the results of coming inflation. Refunds are intended to prompt the wealthy to reinvest in the economy: to build new factories, hire new workers, pay them salaries, and reinvigorate the private sector. While that sounds foolproof in theory, no one is going to build new factories or invest in a business unless there are people with enough discretionary income able to buy their products. The reality is, we have excess production capacity in every sector of the economy, so creating production redundancy is not very helpful. Selling more of what is already produced is the challenge, and if inflation eats up those modest middle class tax cuts, discretionary income levels will not improve. Inflation will also increase hardware and software costs, thus decelerating the frequency of upgrades and new system purchases. Simply stated, supply side economics works well when the economy is already thriving, but it will not make an ailing economy flourish.

But perhaps the most troubling economic indicator will not be found on any balance sheet. It is an attitude that permeates the corporate world, a competitive mania that invites deliberate fraud and discounts the lives of both employees and customers. Two examples: IBM professes to hold a long-standing value of "respect for the individual." But how are individuals respected when the corporation decides to abandon its traditional pension plan and adopt a cash-balance plan, which can slash the retirement benefits of older workers by up to 40 percent? What kind of people look at a balance sheet and decide to cheat their most loyal and senior employees out of a pension they worked a lifetime to garner? Employees sued the corporation and won, convincing two courts that federal pension laws prohibiting discrimination based on age had been violated. As further proof of how much it respects the individual, IBM is appealing the decision.

Then there's Merck. Apparently, management of the drug maker knew for years that Vioxx was killing people. Yet they did nothing. Patients using Vioxx doubled their risk of heart attack and stroke. According to the AARP Bulletin, a single study estimated that as many as 27,000 heart attacks and sudden cardiac deaths could have been avoided if patients had used a competing drug. The company responded with a press release that confirmed a "Favorable Cardiovascular Safety Profile for Vioxx." The FDA called the claim "simply incomprehensible."

It was an eerie coincidence that, the day I was writing this article, I came across the following in the comic strip Dilbert. In the first panel, Dogbert is consulting and tells the staff, "Once you embrace the idea that your customers deserve to die . . . it frees your mind to invent splendidly profitable products." It struck me that the cartoon wasn't very funny, because it's not much of an exaggeration.

It's no coincidence that the companies that have been guilty of the most unethical behavior are always the loudest champions of deregulation. By default, lack of sensible regulation spawns a system in which we "deserve" whatever happens to us. Thus, we have become numbers on a balance sheet; as disposable as used tires and individually as inconsequential as yesterday's newspaper. To the modern multinational corporation, unburdened by conscience, we are no longer human beings, but either resources, like iron ore, or sheep, to be manipulated and fleeced and, yes, sometimes slaughtered for the good of the bottom line. As a labor policy, outsourcing is just another manifestation of the contempt with which loyal and capable workers are sometimes treated. And if IT workers have an uncertain future, it is because companies are rewarded for callous and unethical behavior.

The Silly

"But what is it good for?"

--Engineer at IBM's Advanced Systems Division commenting on the microchip, 1968

Looking through the silly end of the scope, it's clear we might as well laugh at where we're going, because we may not be laughing when we get there. So here's a satirical look at the future of outsourcing.

The outsourcing craze reached its predictable conclusion when IBM announced it would send its few remaining American jobs to the Amazon basin. "Since the Chinese have already rounded up all available Mongolian nomads," explained Chairman Sam Palmisano, one of IBM's few remaining stateside employees, "indigenous Indian tribes like the Yanomani and the Kayapo are the last great untapped labor pool. They're hard to find 'cause they keep moving around a lot, but we managed to trap enough of 'em to begin our Amazon operations. This is not," Palmisano insisted, "as some have implied, a vote against the American worker; it simply demonstrates our ongoing commitment to diversity."

A lack of basic infrastructure initially presented some challenges, but it also offered certain advantages. "We didn't have to build any buildings, because these people aren't comfortable indoors, anyway," noted Palmisano. "We'll just give 'em cell phones and laptops, and they can roam around all they want, as long as they get their work done." Without power, of course, laptops were problematic, but IBM Sahara developed tiny solar panels that attach to the laptop lid and keep its batteries charged indefinitely. "Our Saharan programming staff is fully mobile, and we'll model our Amazon operations after them. You wouldn't think somebody could drive a camel through a sand storm and type at the same time while talking on a cell phone," said Palmisano, shaking his head in disbelief, "but our Nomadic Dromedary Programming Brigade can find its way through blowing sand and never miss a keystroke. Unfortunately, there's a lot more shade in the Amazon than in the Sahara, so until we figure something else out, somebody is going to have to climb to the top of the canopy and hold the laptops up toward the sun for a couple of hours each day."

Language was, of course, another challenge, but not unknown to forward-thinking IT management. "Nobody here spoke Yanomami or Kayapo, and they only spoke a few words of English. But we figured that wasn't much of a problem. We put them on technical support. Hell, those people in India and China who staff all the technical support desks don't speak much English, either, so we figured nobody would be able to tell the difference. We've been monitoring calls, and so far customers have not been swearing any more frequently at the Yanomami than they did at our Chinese technical support staff. So I think our customers will continue to enjoy the same high level of technical support they've grown accustomed to."

Palmisano hopes that IBM Amazon will also provide a model for future IT compensation. "At first we offered 'em $2.00 a week, which we thought was pretty generous, considering they hardly wear any clothes and the nearest WalMart is 3,700 miles away. But they didn't have much use for money and insisted on getting one howler monkey and three piranha per person, per week. Well, in real dollars, that's more than our American workers get. But we figured, what the hell? People gotta eat. Besides, we're saving money on office furniture. So we shut down what's left of our Poughkeepsie plant and sent the management staff down there to catch monkeys. Not easy in wingtips, I can tell you. And after one guy fell in the river, nobody was really anxious to catch piranha. But we keep telling 'em, if they want to be a part of the global information technology sector, they'd better get catching."

"Some of these guys ran around the jungle for a few days and couldn't catch a single monkey, so they gave up. I'm told a few of 'em started a consulting business to prepare other indigenous tribes for employment opportunities in the global economy. But I could have told 'em those natives are about as hard to find as those monkeys. So we've got some employment opportunities in Primate Resources at IBM Amazon. We're looking for Associate Primate Retrieval Specialists. You gotta be young, quick, and able to climb trees."

"Hey, the days of the desk job are over. It's an IT jungle out there."