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THE NEW COMPUTERIZED AGE-4•i

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AUTOMATED GOVERNMENT. / > •

How computers are being used in Washington to streamlinepersonnel administration—to the individual's benefit.

By JOHN W. MACY, JR.

IN ANY EXAMINATION, whetherin high school or college or in acivil service written test, it has

never been considered cricket to showyour paper to anyone else. In thesedays of automated examinations thissame rule may be carried to the ulti-mate extreme: the only eyes that everfell upon an applicant's civil servicetest may be his owrf Even though thetest may be sent across the continent,graded, and compared with the papers

'of other competitors, and even thoughthe applicant may be hired and enterupon a lifetime career largely on thebasis of this test, nobody but him needsee it after he completes it.

This is one aspect of automation thatbids to revolutionize personnel man-agement in the federal government.Some may regard this feature as deper-sonalizing. But the truth is that massexamination scoring never was a highlypersonal activity. The automation ofmuch personnel work of a clerical typemay well serve to increase the personalattention managers can give to prob-lems requiring human attention.

Automated examining techniquesused by the U.S. Civil Service Com-mission may be both more advancedarid more limited than the generalpublic realizes. During fiscal 1966 theCommission's computer automaticallyscheduled more than 700,000 applicantsinfo 1,000 examination points through-out the nation, computed the scores ofthose who took these nationwide ex-aminations, and notified applicants ofthe results. On the other hand, thesehigh-volume figures deal only with na-tionwide written examinations. In manyinstances, persons who apply for posi-tions are not tested, but rather are evalu-ated by a team of experts in a specificoccupation, and are graded solely ontheir previous training and experience.

For one of the 700,000 persons whoapplies for an automated examination,the initial action on his part is simple

and easy. He files only a small cardform. In due course he receives an ad-

mission card, telling him to report at a

John W. Macy, Jr., is Chairman of theU. S. Civil Service Commission,

SR/ July 23, 1966

specified date and hour at an examina-tion point convenient to him. His ex-amination has been scheduled by ma-chine, and the time and location havebeen printed automatically. In the ex-amination room, the competitor markshis answers to the questions by shadingthe appropriate block on a set of test-answer sheets. When the sheets are re-turned to the commission, computersthen take over the next steps. Theiroutput even includes a letter to thecompetitor notifying him of the testresults.

The notification letters roll out of thecomputer in one long sheet', are me-chanically separated, and are finallystuffed into mailing envelopes virtuallyuntouched by human hands. Not onlyis this process immensely faster, it ismore accurate and requires substan-tially smaller expense than processingby hand. In addition, the computer isprogramed to 'check the validity of testresults, to prepare studies showing howdifferent groups of applicants per-formed on various sections of the ex-amination, and to assist in establishingappropriate passing scores.

Automatic data processing has beenapplied to personnel management in

A nation's records—nearly 6,000miles of magnetic tape at the U.S.Internal Revenue Service's NorthAtlantic regional center containrecords ranging from 15,500,000tax returns to the payroll for 40,-000 agency personnel. This is one ofseven such data processing centers.

the federal government for only aboutsix years, yet the roots of the cyber-netic revolution in government extendback to the 1880s. In fact, there is reasonto think that the entire development ofautomatic data processing was initiatedby an invention of a young Census Bu-reau employee appalled by the paperwork of the 1880 tabulation.

Herman Hollerith was a young engi-neer working oh the 1880 census. See-ing a need for something better thanhandwork on the mass of census statis-tics, he put together a tabulating ma-chine that he called his "statisticalpiano." It was somewhat reminiscent of

Business tax returns are being processed nationwide for the first timethis year in the U. S. Internal Revenue's seven regional service centers.Honeywell 200 computers, such as this one, are used to check the returns.

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a player piano, in that it used a rollof punched tape to feed instructions intothe machine. People who, then as now,condemned the civil service for a lackof imagination and innovation, musthave been looking the other way. Eventhe inventor may not have realized whathe was starting, but in the 1890 censusHollerith's device was credited withsaving two years of work and $5,000,-000, Later it became the foundation fora phenomenal business—the companynow usually referred to by the initialsIBM.

The government also pioneered in thedevelopment and use of electronic dataprocessing. One of the first completelyelectronic computers ever built wascalled ENIAC, for Electronic NumericalIntegrator and Calculator. It was pro-duced by the War Department and theUniversity of Pennsylvania, working to-gether in 1946 to solve problems inballistic research. In 1951 the first com-mercial computer, UNIVAC I (Univer-sal Automatic Computer), was installedin the Census Bureau, some three yearsbefore a private company put a UNI-VAC into operation. The governmentreceived good value from its investmentin UNIVAC I, running up more than73,000 hours of operational use on themachine before retiring it to the Smith-sonian Institution in October, 1963.

When first developed, the digital com-puter was used merely as a large andvery fast calculating machine, or forcomplex accounting and statistical pur-poses. In government, priority was givento its employment in the primary missionof the agency by which it was used. Bythe early 1960s, however, the Depart-ment of Agriculture was using computerfacilities for centralized personnel man-agement data processing purposes. ItsMODE (Management Objectives withDollars through Employees) system isa large-scale centralized personnel rec-ord-keeping and reporting operation,utilizing a computer in New Orleans. Inaddition to records and reports, the sys-tem computes the pay checks for Agri-culture's 100,000 employees throughoutthe nation.

The Veterans Administration, with156,000 employees, was the second largeagency to install a centralized, auto-mated personnel system. This system,called PAID (Personnel and AccountingIntegrated Data System), operates atHines, Illinois. PAID encompasses gen-eral personnel management statistics andreports, career development and trainingrecords, a file on employees' length ofservice, payroll information to permitcomputation of checks by the machine,and information on the authorized num-ber of positions as compared with the

"Yessireei Our new long-range bugging device is going to putyour long-range bugging right off the market, Amalga-mated Sonics! Are you listening, Amalgamated SonicsF'

number of employees on the rolls. Thesystem also contains a "suspense" file ofpersonnel matters to be brought up oncertain dates.

Twenty-two agencies of the govern-ment now have automated personnelsystems covering 1,500,000 federal em-ployees. Systems covering an additional500,000 are being developed.

The Civil Service Commission firstentered this field in administering the.government-wide retirement systemThrough an automated procedure, 750,000 retirement accounts are maintainedwith an annual increase of 45,000 newannuitants.

Three years ago a 5 per cent increasein all current annuities was authorizedby Congress. This necessitated recom-putation of the annuity for every personon the retirement rolls. The last timesuch a task was required it took monthsThe added workload was augmented bya stream of letters from Congressmanjustifiably wanting to know why theirconstituents were not receiving their'higher retirement checks. But in 1963thanks to the wondrous capability of thecomputer, 630,000 annuities were re-computed in just ten days and checksstarted flowing out before complaintsand inquiries began pouring in.

The system is now being used to com-pute deductions for Medicare paymentsfor those annuitants who are not receiv-ing Social Security benefits. A recentlycompleted management study of retire-ment and insurance operations indicatedthat over the next decade more than$3,000,000 can be saved through furtherautomation.

Increased automation is to be ex-pected. But it is time to ask searchingquestions about these systems and whatthey should be doing for us.. Automationpersonnel systems put into use during|the past few years are basically recordkeeping and reporting systems. But it isa serious mistake to think of personneloffices primarily in terms of records andreports.

Personnel management is pincipallyconcerned with finding the best qualifiedpeople to fill vacancies, insuring ????mum utilization of manpower resourcesimproving working conditions and thenby improving work—and providing ???employment opportunities to all our citi-zens, not only at the point of entranceinto the service, but throug training,promotions, and full career development.Seen from this perspective,of personnel operations is just beginning.

As we advance, the question facing usis this: Which parts of the job cancomputer do better—and which can wedo better? We know that a large partmanagement is actually clerical decisionmaking, though we have often describedit in the past with the word "judgement."It requires the identification of relev???

SR/ July 23, 1966

facts and the selection of predeterminedactions on the basis of those facts. Thisa computer can do beautifully.

In scheduling civil service examina-tions, for example, our computer makes"decisions" of this kind by the thou-sands. Why should the time of a man orwoman be devoted to such work withless accuracy and little satisfaction? Wehave other work for men and for women,in which they can do a far better jobusing the huge data resources of thecomputers. This work involves decisionson personnel planning, the matching ofmen and jobs, the forecasting of man-power needs, and the important decisionsof career-planning.

For proper decisions in these areas wemust have integrated information sys-tems. This will require the use of infor-mation across departmental boundaries.It is here that current efforts to standard-ize symbols and codes will pay divi-dends. Direct tape-to-tape feeding ofdata from one department to anothermay become common. These systemswill mesh well with developing plansfor an executive-level staffing programwhich will be designed to locate the bestpossible man for any given top-level as-signment, no matter where in govem-ment he may be serving.

The computer's ability to search itsperfect memory and pick out records ofindividuals with specific characteristicshas been applied in the search for can-didates for Presidential appointments.A computerized file containing thenames and employment data of some25,000 persons, all considered likelyprospects for federal appointive posi-

: tions, is searched electronically. This tal-. e n t bank, with its automated retrieval

system, broadens the field of considera-tion for the President in critical decisionsof leadership selection.

Throughout the government, one ofthe great responsibilities is to provide

.. true equality of opportunity in employ-ment. To know where we have failed toprovide it, where we have succeeded,and how best to plan, we need a multi-tude of data. Through head-counts weknow only that a certain number ofNegroes, for instance, were on the rollsin certain grades at a certain time in the

• past, and now we can count that thereare fewer or more. But these data donot reveal whether the people in certainjobs came from lower jobs or from out-side the government. They do not assistus in recommending training or evaluat-ing it. They fail to give us the manage-ment information required to do a con-scientious job in creating conditions thatwill make a reality of equal opportunity.

To obtain additional and more accu-rate information, a new effort has beeninitiated in this area. By menns of avoluntary racial designation prepared by

(Continued on page 70)

SR/Jnly 23, 1966

THE NEW COMPUTERIZED AGE - 5

PLUG-IN INSTRUCTION

Computers, harnessed to teaching machines and television,promise a new era in universal public education.

By PATRICK SUPPES

CONTRARY to the expectations ofmany, the computer may makeclassroom teaching more, rather

than less, an individual affair. And indoing so it will facilitate learning at aspeed and depth of understanding thatnow seem impossible to achieve.

The theme of individualizing instruc-tion is very old in education. Psycholo-gists long ago documented the fact thatindividuals differ in their abilities, ratesof learning, and even in their generalapproaches to learning. And educatorshave concluded that, ideally, the mosteffective teaching is that which is tai-lored to the needs and abilities of eachindividual. But the costs of providingindividual instruction in a society com-mitted to universal education are pro-hibitive. Meanwhile, administrators andteachers continue to struggle with theproblem by such means as grouping

Professor Suppes is Director of the Institutefor Mathematical Studies in the Social Sci-ences, Stanford University. This article wasadapted from The Computer in AmericanEducation, to be published this fall by JohnWilev & Sons.

students with roughly similar abilities,and following the concepts of the un-graded classroom and of team teaching.

Surprising as it may seem, the bur-geoning technology of computers mayoffer one of the best means of providingindividual instruction at reasonable cost.A handful of experiments throughoutthe country already are exploring thevaried possibilities of this new type ofindividualized instructional technology.

Computer-based teaching systems,designed to aid the teacher in the in-dividualization process, consist of a vari-ety of student operated instructionaldevices. These learning machines arenot to be confused with the large classof so-called "teaching machines" of re-cent years—frequently identified withthe educational process of programedlearning. Typically, these mechanicaldevices dispense instructional materialin a fixed sequence of small, easy-to-takesteps of one or two sentences, usuallyfollowed by a question. All studentstraverse the same sequence regardlessof differences in background and apti-tude. With computer-based teaching de-vices, however, the student will study

(Continued on page 29)

Working at a teletype keyboard, this fifth-grader types out the answer to a prob-lem sent by telephone line from Stanford University. The teletype booth is placedin; a corner of the school classroom, and each youngster spends about five minutesa day working on a drill at one of five levels of complexity. As each child worksthrough a drill, the computer records his total ""time, correct or incorrect an-swers, percentage of problems correct to date, and the total time in the program.

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employees themselves after employment,reliable information now can be fed intocomputers where it can be confidentiallystored and used.

Most federal managers need moreknowledge of computers in order to bestuse their capacities. With this in mindthe commission last year established anADP Management Training Center inWashington. More than 2,300 federalemployees have attended its sessions.

There seems no doubt that increasinguse of computers in government, accom-plishing many of the clerical tasks bymachine, will affect the skill require-ments and the "occupational mix" ofgovernment service in the future. TheCivil Service Commission has made anextensive study of this question, and isgiving it continuing attention. Employeedisplacement has not been extensive;with intelligent planning an agency canprevent hardship for the employees af-fected.

An outstanding example is furnishedby the Internal Revenue Service, whichhas done an exemplary job of minimiz-ing the impact on employees in its exten-sive ADP conversion program throughadvance planning, and intensive retrain-ing and placement efforts. This is thekind of personnel job no computer canhandle.

This seems to me to be the answer tothose who fear that computers will de-emphasize humanity. Far from it! Byremoving the clerical decisions and themass of paperwork details the computermay well free the mind of man for moreworthy use.

Already it has heightened the needfor imaginative and innovative managerswho can grasp ideas, think in broad,philosophical terms, and apply suchterms in decisions relating to public wel-fare. It has forced a finer degree ofquantitative precision in executive judg-ment. It has liberated the manager togive his mind to greater scope of cre-ativity. Rather than degrading the worthof the human being, the computer hasplaced a premium on man at his best.

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SR/July 23, 1966

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THE NEW COMPUTERIZED AG6-9 y •". ....

WHITHER PERSONAL PRIVACY?Computer technology may enlarge Man'g liberty or inhibitit; new rules must be made; new questions answered.

By JOHN LEAR

BETWEEN my resignation as aneditor of the slowly dying Col-lier's and the inauguration of SR's

Science and Humanity Supplement, Iwas for a short while a minor adviserto Thomas J. Watson, Jr., son of thefounder of the International BusinessMachines Corporation. My experiencethere contradicted two popular beliefsabout IBM.

The first belief was that all IBM em-ployes were required, as a condition ofemployment, to wear white shirts on thejob, stay sober at home, and maintain up-right on their desktops identical copiesof a small sign bearing the personal com-mand of Thomas J. Watson, Sr.: THINK.I wore light blue shirts, drank cocktailsat lunch, and put the THINK sign onthe windowsill of my office whenevermy secretary put it back on my desk;yet I had a standing invitation to youngTom's sanctum.

Automatic type composition bythe IBM 1130—"a computer cando only what it is told to do."

The second of my working conditionsthat ran against supposed IBM traditionhad to do with that then-new phenome-non, the so-called "giant brain," or high-speed electronic computer. IBM has soldan enormous number of electronic com-puters. According to legend, a loyal IBMsalesman would leave his wife if neces-sary to clinch another sale. The truthabout IBM computer sales, as I experi-enced it, was that an immense share ofIBM's sales investment went into per-suading eager customers to delay thepurchase of computers.

Delaying was sound business practicebecause a computer can do only what itis told to do; it must follow instructionsliterally; until the instructor himself issure where literal pursuit of a long seriesof tiny steps will lead, turning the taskover to a computer can be dangerous.The machine may complete its assign-ment before its owners realize that theoutcome isn't really the onfe they seek.

The period of my IBM experiencedates back roughly a dozen years. Atthat time, computers could do only onething at a time, in sequence. Computerprogramers — the people who breakeveryday English into binary arithmeticmessages (consisting entirely of numeri-cal zeros and ones) comprehensible tothe machines—were such valuable indi-viduals that IBM allowed them to sit atthe computer control consoles as long asnecessary to figure out flaws in the trans-lation process. Since then, the speed ofthe machines has risen, the size of com-ponents has shrunk, and computer so-phistication has grown to such a statethat a machine can do a number of dif-ferent things at a time, not necessarilyin sequence.

As a result, the computer's time isworth upwards of $300 an hour—too val-uable to be wasted by a programer'shead-scratching; and each programernow must figure out unexpected prob-lems in a separate place while the com-puter goes on with other people's prob-lems. In other words, it is now possiblefor wrongly instructed computers tomake more disastrous and far-reachingmistakes in a shorter time than ever.

Paul Baran, of the RAND Corporationin Santa Monica,, has studied this di-lemma more searchingly than most ob-servers of the phenomenon.

"As we pass thrpugh life," he remindsus, "we leave a trail of records, widelydispersed and generally inaccessible-ex-cept with a great deal of effort and dili-gence. Beginning with a birth certificate,we accumulate hospital and medicalrecords. We become deductions on ourparents' income tax. In school, we gen-erate records of our grades, attendance,IQ tests, personality profiles, etc. (Auto-mated teaching will add to this recordkeeping. The volume of data recordedper child may be expected to increaseeven more markedly.) After school westart accumulating employment, socialsecurity, and selective service records.We may get a driver's license. Most ofus will apply for marriage licenses, andsome of us will collect divorce decreeswhich will end in voluminous court rec-ords. If we are lucky, we will be able toavoid having arrest and jail records.

WE move from job to job in a mobileeconomy creating moving-company in-ventory records of our goods. Even as wemove from place to place we leave be-hind short records of our airplane reser-vations and, for some reason, every hotelmakes a ritual of acquiring and preserv-ing the alleged names and addresses ofits guests for posterity. This is only apartial list. Think of all the records youleave as you go through life.

"Behind all this creating of records isthe implicit assumption that they willsome day be of use. In order to be ofuse, there must be some means of inter-rogating the files to resurrect the infor-mation sought. : .

"An Internal Revenue Department in-vestigator might wish to have immediateaccess to the tax returns of each of theassociates of a man who is being audited,in order to check on consistency of fi-nancial relationships.

"A company may wish to have rapidaccess to its personnel files to knowwhether to give a food reference to aformer employee.

"A doctor may wish to trace the entiremedical history of a patient to providebetter input into a diagnostic computer.

"The Veterans' Administration maywish to examine a man's complete mili-tary record and possible other previousmedical records to see whether the ail-ment claimed as being service-connectedreally is service-connected.

"A lawyer for the defense of a manwill wish to search for jail and arrestrecords, and possibly credit records ofall witnesses for the plaintiff.

"Professional licensing boards maywant to delve into any records to de-termine if an applicant has an unblem--ished character.

"The military in filling extremely sen-sitive positions may even wish a recordof all books borrowed by a prospective

{Continued on page 41)

SR/July 23, 1966

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Continued from page 36applicant to insure that his interests arewholesome and he possesses the properpolitical bias desired.

"Today it is difficult to gather suchinformation about a prospective exam-inee. If one went through direct chan-

nels and asked most sources for theirrecords about a person, he would mostlikely be rejected, if for no other reasonthan that the information is not available—cheaply. Even if the records were pub-licly available, the investigator wouldhave to spend a great deal of time andeffort delving through to discover perti-nent data. Today, as a practical matter,if one wishes to obtain certain informa-tion about a person, he hires a privatedetective who charges a great deal ofmoney and expends a great amount oftime obtaining a little information avail-able from a portion of these potentialrecords. The price for a fishing expedi-tion for information is high and most ofthe fish are inaccessible."

I JJAVTNG thus summed up "the.pleasant past," BAND analyst Baran•Jooks into the future through a three-step review of established processes ofcomputer storage of information. STEPONE: Manual records are kept by humanclerks. STEP TWO: Some of the clerks areeliminated by putting all the records

. into a central computer file with read-out of the records controlled from asingle point. STEP THREE: Information is

| tead into and out of the file from a largenumber of different points,• Baran envisages connection of oneremote-access computer with other simi-lar computers, and through this, "dangerof loss of the individual's right to privacyas we know privacy today." "The com-

.posite information data base may beso large and so easily accessible that itwould permit unscrupulous individualsto use this information for unlawfulmeans," he warns. "Modern organizedcrime should be expected to have thefinancial resources and skills necessaryto acquire and misuse the information."

t He expresses concern not only over thepossible creation of "automated black-mail machines" but over the potentialaddition of "inferential relational re-trieval techniques" now being developedwhich, "when fully refined, could deter-mine relationships of any person, organi-zation, event, etc., to any other person,organization, or event." Noting that "hu-mans, by their day-to-day necessity ofmaking decisions on totally inadequateevidence, are innately prone to jump toconclusions when presented with very

..thin chains of inferred relationships," hepredicts an increase in the already grow-ing practice of unearthing defaming in-formation about candidates for politicaloffice.

The Baran forecast of computer haz-

SR/July 23, 1966

ards is fortified by the studies of anotherBAND researcher, M. B. Maron.

"Consider," suggests Maron, "whatcould happen as machines are usedto make decisions about people. Forexample, consider a situation wherea computer is programed to decidewho should get a security clearance fromthe government, or who should get aneducation loan, or whether someone'sdriver's license should be suspended, orwho should get a passport, or who shouldbe accepted for the Peace Corps or theJob Corps, etc.

"As larger files [of machine-languagedata, stored in computer memories,linked cross-country by telephone] be-come accessible there will be a naturaltendency to use machines for the auto-matic selection (or rejection) of peopleaccording to some pre-programed setof criteria. Supposedly these criteria willhave been carefully thought out beforeprograming the machine. Even so, theimplications are dangerous.

"In such a mechanized situation, howdoes an individual get an opportunity to'tell the system* that its selective criteriadon't apply to his own special case?Ea ch individual is different, each hascertain extenuating circumstances, eachhas information which he believes to berelevant to the selection decision andwhich the system does not considerrelevant. And so on. If an individualdoes not have the opportunity to bejudged on the circumstances of his ownspecial (individual) situation, then he isbeing treated-as a machine! \ ••> ,,.,.

"Will there be a tendency in' the fu-ture to create an environment where wetreat each other as machines; i.e., wherethere is no opportunity to 'change thesystem's mind'? How can we create asociety where we treat our citizens aspeople and not as machines? How canwe create a society where each individ-ual has the opportunity to explore andunfold his own special potentials—to re-alize what he is?

"These questions lead to further ques-tions—to questions about who we areand what it means to be a person. Andthis brings us to the problem of values.What kind of a life do we want? Whatkind would we value—ought we to have?How can we create a society that fostersthose actions and goals that we value?How define and explicate values? Howmeasure and compare and rate values?How select among competing values?How can we estimate the impact of com-puters on our values?

"And if our projections into the futuresuggest that we are heading toward afuture society which is not conducive toa 'good' life, what can be done to isolatethe trouble spots and to influence thosechanges that will prevent the possible'evils'? Such analysis of future prospectsimplies prediction, evaluation, and then

some attempt at control. Can the processof control be made democratic so that asmall professional elite does not domi-nate in influencing the shape of thefuture?

"Finally, there is the problem of time—the time that it takes to initiate andcomplete corrective action. Given an i j :analysis of the impact of computers on ••society and given some corrective actionthat must be taken in order to avoidsome future situation, how long a timelagwill occur between corrective actionand modification of the situation?"

The positive cultural potential of com-puters was emphasized last January in areport to President Lyndon B. Johnsonby The National Commission on Tech-nology, Automation, and Economic Prog-ress. Although this report dissented fromthe "almost. . . commonplace [opinion]that the world is experiencing a scientificand technological revolution" of suf- ,ficient power "to make our economicinstitutions and the notion of gainful em-ployment obsolete," it proposed seriousconsideration of development of a com-puterized "system of social accounts" . •; icapable of analyzing accurately in ad-vance the benefits and costs of any socio-political experiment. Such a system theo-retically could grapple competently withcomplex problems such as water and airpollution, urban blight, the transporta-tion tangle, integration of the Negro into .American society, and the continuingspread of crime.

The Presidential Commission report• (Continued on page 67) x

Sales records being checked electron-ically—"Will there be a tendency in thefuture to create an environment where jwe treat each other as machines?" :, •••./

Personal PrivacyContinued from page 41

defined the phrase, "system of social ac-counts," to include mixtures of systemsanalysis, simulation, and operations re-search in proportions required for par-• ticular cases. Systems analysis andoperations research are now in wideemployment in military planning andextraterrestrial space exploration. Simu-lation techniques are part of currentplans for global weather observation andforecasting.

How close are we to a workable "sys-tem of social accounts"?

One of the best informed men onearth on the subject of computer devel-opment is Dr. Cuthbert Hurd, chairmanof the board of Computer Usage Com-pany, Inc. In addressing the NationalAutomation Conference of the Ameri-can Bankers Association in Chicago lastmonth, Dr. Hurd observed that no com-puter manufacturer today markets an"operating system" flexible enough toapply all the diverse talents of comput-ing machines to any complex problem.

"I suppose," Dr. Hurd told the bank-ers, "that as much as 200 man years ofeffort might be required to produce amodern operating system, costing say$5,000,000."

If such a system were to be perfected,Dr. Hurd said, "it is still unclear whetherproprietorship [of the system] could bei&auntained under the existing patent or• Copyright laws." .',

There are two ways, then, to state.the challenge of computerized society.One was succinctly put in a recent issueof The American Scholar by Lynn White,Jr., professor of history at the Universityof.California in Los Angeles: "Must themiracle of the person succumb to theorder of the computer?"' The other state-ment comes from Paul Baran: "What ajypnderful opportunity awaits us to be-come involved in such problems as toexercise a new social responsibility."

CHARCOALMELLOWED

SR/Jnly 23, 1966

ABOUT THE BIGGEST RUCKUS ever made aroundJack Daniel's old office was the day Mr. Jack kicked the safe.

When Lem Motlow, Jack Daniel's nephew, started at ourdistillery as a bookkeeper, he generally opened the safe.But one day Mr. Jack tried to openit himself, and when he couldn'the got so riled he kicked it. Folksstill talk about the fuss that wentup. But they can also tell youMr. Jack was never impatientwith his whiskey. A sip ofJack Daniel's, we believe, willtell you we're not either.

© 1945, Jack Oanltl Diittll«ry, Um Mollow, Prop, Ine,

TENNESSEE WHISKEY . 90 PROOF BY CHOICEDISTILLED AND BOTTLED BY JACK DANIEL DISTILLERY • LYNCHBURG (POP. 384), TENN.

67

DROP

6BY DROP

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mean that we will be able to do morewith information technology than wenow can even imagine.

Let me turn now to the problems ofputting these machines to work.

N,I OWHERE is the turn toward tech-nology more obvious than in the waywe manage. When we first started toapply computers to business operationsin 1954, we went through a very diffi-cult experimentation period and werefaced with the most puzzling kinds ofproblems. We have largely emergedfrom that period, however, and today weare using computers in business for al-most everything conceivable—and muchthat was not just a few years ago. Seniormanagement has begun to realize thatthe application of this technology is tooimportant to leave to technicians, andthat dramatic things can be accom-plished if people who know the objec-tives of a business will take theresponsibility of putting these new ca-pabilities to work. When this happens,you find remarkable achievements.

But along with this progress havecome new questions and problems.There are, for instance, union negotia-tion questions. Throughout the country,a number of owners of newspapers havebeen willing to stake the very existenceof their enterprises on the right to installa computer to prepare punch-tape todrive linecasting machines. Just over thehorizon, it is clear that this entire processwill be bypassed. Is it worth risking anenterprise on a process that is disap-pearing?

There are many similar questions.What kind of men, for example, shouldbe trained as managers in the new tech-nological environment? How do we cre-

ate an atmosphere that is conducive tocreative people-for more and more ofour businesses must be staffed by high-ly educated and creative personnel?These are only a few of the problemswe face.

Most important are the human as-pects. They are related to every problemwe have in this field: questions of fearand uneasiness when faced with tech-nological changes; questions of educa-tion; questions of identification with anenterprise, with a profession.

But along with the question of howwe manage are questions concerningwhat we manage—of new areas of busi-ness opportunity. Here, I will speak offour main new entrepreneurial oppor-tunities. The first is the obvious onethat has already taken form —the in-dustry that supplies the systems and theequipment. It is already a multi-billiondollar industry, and this is only thebeginning.

The second example, as yet nonexist-ent but about to bloom as an importantbasic industry, is the data utility field.This is analogous in some ways to theelectrical utility industry: It is cheaperfor many people to use a central utilitythan for each individual to have his owngenerator. The same economic reason-ing applies to the data utility industry,where many people can use a machinesimultaneously. The technology of real-time processing, time-sharing, and com-munication will allow this to happen.Small and medium-sized businesses—and for some purposes large businesses—will just plug in for data processing aswe now do for electricity.

The third example is the one nowbeing called the inquiry industry—insome ways, the publishing field of the

future. This will allow the sale of pro-prietary data over a communicationssystem in answer to a query placed bythe customer. The possibilities are un^limited; practically any information caR;:be provided. We have already started b>,see the purchase of publishing firms bji1'electronic companies, and this is just thebeginning. There will be major changesin ownership in this area in the nearfuture as businesses begin to positionthemselves to offer such services.

J.HE fourth example is an industry ofcomputer-based educational systems. Astechnology allows a dynamic or "alive"relationship between a student and amachine system that answers questionsas they are posed and discerns gaps ina student's basic grasp of a subject, the..much-heralded but until now disap-pointing teaching machines (better, Ithink, called learning machines) will be-gin to mean something. Such systemsare already at work in some industrialsituations—IBM's Maintenance Trainingbeing a good example. Other precursorscan be seen in mentally handicappedchildren's use of computer-driven type-writers to help them overcome some oftheir handicaps.

If there is one salient fact about in-formation technology, it is that it is go-ing to produce enormous social change.As the quality of life is changed, as therate of learning, information, travel, andcommunications all change, we will seea major change in living patterns, inhopes and desires. In short, a completenew environment will exist.

Computers in medicine—at the HeartDisease Control program field stationin Washington, D.C., electrocardiogramscan be received by phone and analyzed;.by a computer in less than a minute.

(Left) Technician monitors wave pat-terns on miniature oscilloscope.

(Above) Dr. James K. Cooper ofGeorge Washington University MedicalSchool studies an analysis typed out innumerical form by a teleprinter.

SR/July 23, 1966