Computer bugs annoying, but not a major economic threat – Aug. 22, 2003
To the extent that they force businesses and workers to waste time deleting tons of spam e-mail or loading anti-virus software, the bugs could shave about half a percentage point from productivity growth in the quarter, said Anthony Chan, chief economist at Banc One Investment Advisors.
“Anything that causes people to spend more time thinking about what they do will clearly have an impact on productivity,” Chan said. “The good news is this is not a permanent situation — these things have a way of clearing themselves up. But will it be completely inconsequential? I don’t think so.”
Productivity, a measure of worker output per hour, is a big deal for the economy, since it lowers the cost of doing business, boosting corporate profits and improving standards of living.
Fortunately, with recent advances in technology and the longest period of labor-market weakness since World War II, productivity growth has plenty of room to fall. It grew at a stunning 5.4 percent rate last year, the fastest pace since 1950.
What’s more, a lot of the money businesses are spending on anti-virus software or hiring consultants to safeguard systems goes right back into the economy — it might even create a job or two, Chan said — though it seems unlikely this would totally offset the negative effects.
“With the disruption of airlines, trains and such, it’s hard to make the case that increased business at anti-virus companies would be totally offsetting,” said James Glen, senior economist at Economy.com.
So for some companies, office automation might be a lose, rather than a win. Air Canada’s reservations system was “crippled” for part of a day due to the latest vorm attacks: how much lost revenue does that amount to and what would be the outcome if the EULA was enforceable as a warranty, rather than as a copyright protection tool?
Given that small business is the engine of the US economy and how few mom and pop businesses are likely to have an IT staff, what was the cost to them and to the economy?