Is the productivity boom coming to an end? Researchers have suggested that Moore's Law - which states that computer processing power doubles every 18 months - may lead productivity to reach its limit in the next few years.
Ironically, additional gains could flow from a source many view as a potential crisis - the year-2000 computer bug.
Until now, most economists and analysts have viewed Y2K as a drain on corporate resources. Few have tried to calculate the long-term return to consumers, shareholders, and the economy on the $600 billion investment companies have made to prepare for 2000.
As the accounting firm PricewaterhouseCoopers concluded in a recent publication, companies that "have approached Y2K planning and projects as a tremendous, enterprisewide opportunity, as opposed to a defensive, 'must do' task, have taken giant steps into the technological future." Multiply these improvements across the entire economy, and America's recent productivity gains look like just the tip of the iceberg.
I'd like to say that Visa's Y2K efforts are unique, but I believe most proactive companies have made similar investments to prepare for the new millennium.
Visa's Y2K efforts began in 1994 and have been extended to 247 countries; we worked with our more than 21,000 member banks and with 16 million merchants. Looking at the results, we are finding that Visa's computer systems are not just compliant but are actually ahead of where they would be if we had not been forced to address the Y2K issue.
Our technology team has eliminated duplicative or outdated computer applications and introduced further automation. For example, prior to the overhaul, software upgradings had to be handled by individual technicians at more than 2,300 sites worldwide - for each financial institution directly connected to Visa's network. Because upgradings were costly, time-consuming, and labor-intensive, computer systems tended to lag the latest technology.
Today, our developers in San Francisco can distribute upgradings through a digital network stretching from Singapore to Sao Paulo. The result is faster upgrading and more advanced computer systems - not to mention fewer airline tickets for our staff.
Though these technological advances will create lasting benefits, so will the changes in corporate culture prompted by them. Companies that have successfully dealt with Y2K have brought information technology departments out of the back room and integrated them into every business unit. Managers at every level have been given a crash course in technology and the opportunity to rethink how it can benefit their businesses. Contingency planning at many companies has also made the leap from a largely theoretical exercise to a problem-solving function that can be deployed to meet challenges beyond 2000.
In addition, while addressing Y2K our employees have met face-to-face with their counterparts in member banks around the world - a collaborative effort that will sharply increase the speed at which the organization can solve problems or take advantage of opportunities.
We have also strengthened our relationships with important suppliers in the telecommunications and power industries, making future improvement in these areas easier.
If technology investment truly drives productivity, then the Y2K bug may well turn out to be an economic blessing instead of a curse. Perhaps we should encourage computer programmers to embed a "Y-2010" bug that would force companies to remain on technology's leading edge. Then again, maybe that is a lesson we won't have to learn twice. Mr. Williamson is president and chief executive officer of Visa International, San Francisco.