For those of you disappointed that the Y2000 disaster never came, take heart: another problem, albeit Japan-specific, is looming in 2007.

The “Y2007 Problem” became a buzzword a couple of years ago in Japan when industry insiders observed that Japan’s post-war baby boomers, the seven million strong born between 1947 and 1949, will start retiring en masse in 2007. Their expertise in the 1970s-era “legacy systems”—ancient machines that are still widely used but which few in the younger generations understand—drives the nation’s banks, railways and manufacturers will leave with them. The young ‘uns understand the new IT technology, but they have little ability to operate the fundamentals that drive the workhorses of the Japanese political economy.

Japan’s baby boomers build mission-critical computer systems from scratch, in contrast to the younger system engineers who grew up working on existing systems and who are experts in modern technology. So if you think Japan operates poorly now, just give it a few more years—the baby boomers retirement boom could turn the entire system on its head with fantastic or chaotic results.

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