With the proliferation of business-to-business (B2B) Web sites, we're witnessing the emergence of the phenomenon of oligopsony - what economists call a condition where many sellers encounter only a few buyers. For instance, US military weapons manufacturers have only a few customers (governments). So far, oligopsony transactions have been rare because of difficulties in coordinating purchasing decisions among competing sellers.
Stories by Paul Strassmann
I am most grateful for the trouble you took in examining my data critically. In your earlier e-mail you pointed out that I vastly understated the Australian participation in information industries. I do not believe that is the case.
I have examined the list you so kindly provided, which added up to an impressive $US15.653 billion. However, almost all of this money is for telephony, not for IT.
Information technologies originating in the US are emerging as the engines of global economic growth in the 21st century.
B2B e-commerce is being hailed as the next great opportunity to expand the influence of IT people.
Whenever there's a shortage of staff, wages rise, turnover increases and quality declines as companies hire less-qualified applicants. Every economic indicator confirms this is happening today. IT staffs are being paid higher salaries than their business counterparts with equivalent educational and career backgrounds. Nearly 70 per cent of the organisations surveyed by Meta Group say they pay their IT staffs more than they pay end users.
The US in my own estimation, spent more than $300 billion (in Australia it was around $12.5 billion) to secure a smooth computer transition into 2000. My numbers are based on comparisons between Y2K fix-it costs that public corporations filed with the Securities and Exchange Commission and each company's administrative and sales expenses. With financial data about such expenses available for 7600 public corporations, you can come up with a more reliable approximation of Y2K costs than what you'll read or hear from consultants and government officials.
There are fabulously profitable companies with low per-capita spending on computerisation.
The idea that something is amiss with IT investments dates back at least 15 years to when Nobel Prize-winning economist Bob Solow quipped that computers are everywhere except in the economic statistics.
Until now, all year 2000 estimates came from conjecture, opinion polls, guesswork and questionable extrapolations by often self-anointed experts.