The increased replacement demand also has contributed to the spectacular recent growth in this country’s computer hardware and software industries. A reverse effect, which I believe will shortly become visible, is that many institutions will ‘freeze’ their remediated and tested systems for the remainder of this year, effectively foregoing the installation of major new hardware and software systems.
This moves some spending on technology forward from 1999 into 2000. So, ultimately, we are largely shifting the timing of these investment expenditures, rather than changing their total amounts very much. Another area in which uncertainty about Y2K readiness is likely to have noticeable effects in 1999 is in the management of inventories.