Is the 'paperless' office here at last?

By Thom Patterson, CNN

STORY HIGHLIGHTS

• Experts predicted paperless offices would be the norm by the 1990s

• Analyst: Printing for "read-and-discard purposes" must end to achieve paperless office

• Paperless office won't happen "for ages," says analyst, but the "less-paper office is coming"

(CNN) -- In the front offices of the trend-spotting network and online magazine TrendHunter.com, there are 15 workers wrangling 35,000 worldwide contributors -- but you'd be hard-pressed to find one filing cabinet.

Founder Jeremy Gutsche tells a story about how an accountant had finally put together all the numbers on a project and offered to send a paper report on his work. When Gutsche asked for an electronic copy instead, the accountant "just started looking at me, laughing."

According to Gutsche, the accountant asked, "These are your most important financial performance records -- don't you think you should have a hard copy?" "I said, 'I really don't know what I would do with it.'"

"Buy a filing cabinet," said the accountant.

The exchange goes to the heart of a cultural divide that may explain why businesses continue to print, copy and fax more than a trillion pages of office paper each year, according to the market research firm InfoTrends.

The dream of the paperless office started way back in 1975, when BusinessWeek magazine predicted "a collection of ... office terminals linked to each other and to electronic filing cabinets."

"It will change our daily life," said one bold technology expert quoted in the article. Said another expert: "By 1990, most record handling will be electronic."

Twenty years after that unmet deadline, a national survey found that businesses have chosen to use paper printouts to archive 62 percent of important documents.

The survey of 882 companies, released in February by the content management association AIIM, indicates that most businesses believe paper documents are needed for legal reasons.

So what happened? Where is this streamlined office of the future, free of clutter and file cabinets, that was promised back in the '70s?

By the mid-1990s, the nation was actually moving in the opposite direction.

More and more workstation computers and printers contributed to a big jump in office paper consumption well into the 2000s, according to industry experts.

Before taking a hit from the recession, the estimated number of office pages printed, copied and faxed annually in the U.S. peaked in 2007 at more than 1.019 trillion, according to InfoTrends, a Massachusetts-based market research and consulting firm.

InfoTrends analyst John Shane blamed the nation's love of office printing and copying on convenience.

Many people can't bring themselves to let go of the convenience of a printed hard copy, said Shane. For some, printed paper may be more portable, and easier to read in a cramped airliner seat than reading on a laptop. Some people may find paper more comfortable and preferable to read during a meeting, instead of reading a document on a tiny smart-phone display.

"Most of what people print now is for temporary read-and-discard purposes and for transactions," said Shane. "People like to read paper. Then they throw it away. Then they may want to read it and throw it away again. That behavior needs to change if we're really going to see a paperless office."

There are plenty of motivating factors that would push managers to adopt the idea of a paperless office. Cost saving is one. Paperless-office advocates say they save the cost of paper, envelopes, postage, couriers, printers, copiers and, of course, filing cabinets.

The idea of helping the environment also might push a change in behavior, Shane said.

That's the motivation behind Gutsche's paperless office, his second such system after going through the shift with his previous employer, Capital One.

Three major factors will drive the paperless office movement, says Gutsche: ecological, technological and generational.

"The world's getting more obsessed with eco," said Gutsche, in this case the idea of saving paper and conserving trees. "Eventually it's going to get to a point where it's going to seem awkward when you see someone having something printed."

The paper industry argues that recycling paper and managed tree growth make using paper cheaper and easier on the environment than the cost of recycling computer components.

The technology is available to give even home-based businesses the option of going paperless.

Scanners for electronically storing documents are getting smaller and more affordable. "You get back from a conference -- you drop off 15 business cards into a little scanner and it places them all digitally," said Gutsche.

Portable computer tablets, such as Apple's upcoming iPad, are also part of the equipment of a paperless office. "As soon as I switched to a tablet PC, that eliminated the need to be walking around with a pad of paper to meetings," said Gutsche. "I can write things down immediately on the tablet."

When he's giving someone feedback on a document -- whether it's on a PowerPoint Deck or in Microsoft Word -- it's much more tedious to mark it up on a keyboard, Gutsche said. "But if you use a tablet, you're drawing right on it, so there's no real shift from what you're doing."

Next-generation e-readers and tablets have spurred interest in the prospect of a paperless magazine market.

Bold new e-readers grab attention

For home offices, popular tech blogger Chris Pirillo recommends using a Web-based billing and payment system such as Freshbooks to eliminate paper created in the invoice process.

Kevin McNeil, CEO of Ontario-based Gore Mutual Insurance, said acceptance of the company's paperless office system in 2002 was "a generational thing."

More than half of his approximately 280 employees are under 35, he said.

Younger people -- especially those young enough to have grown up with home computers -- have adapted very quickly, McNeil said. Older workers took longer, but everybody was on board within six months.

"Everyone saw the benefits of being able to take care of their work faster, but young people don't want to deal with old technology. They paid more attention."

As a result, the workflow has gone from sometimes waiting days to retrieve records that were archived off site, to accessing the same files in two or three seconds -- saving time, creating efficiency and improving customer service, McNeil said.

An initial outlay of hundreds of thousands of dollars was well worth it, he said. "For every dollar that we spent on it, we saved that dollar plus another 85 cents."

Gutsche said the shift to reject all paper has already started, but Shane is more cautious in his predictions.

Although Shane does see offices in the near future reducing their printing and copying, he says, "I wouldn't call it the paperless office -- that's not going to happen for ages. But the less-paper office is coming."

By the way, that filing cabinet TrendHunter.com's accountant suggested? According to Gutsche, "it's still empty."

The Naked Euro

Robert Skidelsky

LONDON – Dramatic challenges, and mediocre responses: that is the history of the European Union. All too rarely does the EU rise to the level of events, which is why Europe is fading economically and geopolitically.

The 1958 Treaty of Rome, which established the European Economic Community, was Europe’s great leap forward. But the decision to create a common market without a common government was simply storing up trouble for the future. Everything since – enlargement to 27 member states and the creation of the 16-member euro-zone – has widened the gap between rhetoric and reality. Euroland has gone on promising far more than its history enables it to deliver.

The Greek financial crisis is the latest example of the gap between reality and rhetoric. At root, it is a crisis of “enlargement,” in this case enlargement of the euro-zone. Unprecedented effort at fiscal discipline in the 1990’s – helped in Greece by creative accounting – enabled Portugal, Italy, Greece, and Spain (disobligingly known as the PIGS) to meet the entry criteria in 2002. But once in, the pressure was off. Most of the Mediterranean countries continued on their spendthrift ways, confident that the markets would not call them to account.

Now Wolfgang Schauble, Germany’s Finance Minister, has said enough is enough. He advocates setting up a European Monetary Fund (EMF) to provide emergency lending to countries at risk of default on their sovereign debt. Emergency lending would come with a “prohibitive price tag,” “strict conditions,” and “mandatory penalties” in the event of non-compliance.

Translated into ordinary language, this means that the state finances of a country that was granted help from the EMF would be outsourced, for a time, to external commissioners, much as happened in the nineteenth century to Latin American states that wanted their debts re-financed.

Milton Friedman predicted the single currency would fall apart after a decade or two; this has now become more likely than not. After all, Schauble knows that the conditions he proposes would be politically unacceptable, so he says that any country unable to meet them “should, as a last resort, exit the monetary union, while being able to remain a member of the EU.” Germany might even exit itself, if it cannot bring its weaker partners to heel.

The Mediterranean crisis has exposed the euro-zone’s long-standing flaw: the absence of a single government. Because the euro-zone is not an “optimal currency area,” it needs tools to deal with so-called “asymmetric shocks” – shocks that affect some members more than others. But it lacks those tools, especially a Treasury with powers to tax and borrow, and a central bank that can act as lender of last resort to its member banks.

Schauble’s proposal has both an economic and a geopolitical dimension. Economically, it exposes the deep divide between those who believe that external imbalances are the fault of those who spend too little and those who believe that they are the fault of those who spend too much.

John Maynard Keynes wanted to force surplus countries to either spend or lend. But the older doctrine that it was a deficit country’s duty to “put its house in order” survived. The one concession to Keynes was the creation of the International Monetary Fund in 1944 in order to provide short-term assistance to deficit countries under strict conditions. This, in essence, is the German proposal today in the narrower context of the euro-zone.

Schauble’s view is an expression of Germany’s long-standing deflationary outlook. Germany’s fiscally conservative establishment would like other EU countries with large budget deficits to return to economic health through fiscal discipline, reduced domestic demand, and high export growth. The problem, German leaders believe, is not their country’s high saving rate, but other euro-zone members’ excessive spending.

Martin Wolf of The Financial Times disagrees. He also points the finger at China. Both countries have massive surpluses of savings over investment and huge trade surpluses. Both parade their fiscal virtue and insist that deficit countries stop their irresponsible spending.

Wolf rightly calls this argument economically incoherent. Piling up savings in one place imposes unemployment on the rest. High savers should consume more, allowing the big spenders to export more and start living within their means without dooming them to hair-shirted stagnation. Frugality is no virtue if no one is willing to spend.

But the main impact of Schauble’s bombshell is on the geopolitics of the EU. Europe’s political elite view the Union as one of the poles in a multi-polar world. But what is Europe? Less than a federation, more than a confederation, it lacks any center of gravity, any fixed frontiers. When an American, Chinese, or Russian leader wants to speak to Europe, whom does he call? Without internal coherence or external shape, Europe is little more than a geographical expression.

The implication of Schauble’s proposition, therefore, is that Euroland should shrink to a governable dimension. In essence, it recapitulates the contrast between the Greater Germany dreamed of by idealists in 1848 and the Smaller Germany created by Bismarck in 1871.

Like the little boy who was unafraid to declare the emperor naked, Schauble has pointed the finger of realism at the aspirational rhetoric in which all European leaders are still compelled to clothe their utterances. He has broken with the taboo against calling into doubt any aspect of the European project. For those who prefer solid construction to wishful thinking, his words are to be welcomed.

Copyright: Project Syndicate, 2010.

www.project-syndicate.org

Re-Repairing Bosnia

Morton Abramowitz and James Hooper

Bosnia’s future is becoming increasingly uncertain. An ethnic veto has long made the central government ineffective, and, most recently, Milorad Dodik, the leader of the Serb-controlled entity, Republika Srpska, has responded to efforts at reform with a threat to hold a referendum on independence.

Many consider secession unlikely, but Dodik’s threat does heighten fear that today’s fragile status quo could break down. While nobody expects the mass violence of the 1990’s to recur, that does not justify diplomatic indifference and inaction.

The Dayton Accords of 1995 ended Serb-instigated ethnic cleansing and established peace in Bosnia. But that agreement did not create a functional Bosnian central government with the capacity to undertake the reforms needed to meet the terms of accession to the European Union.

To appease Bosnian Serbs led by Slobodan Milosevic (who died while on trial for war crimes), Radovan Karadzic (who remains on trial for war crimes) and Ratko Mladic (who was indicted for war crimes and is still on the run in Serbia), the West accepted the territorial division of Bosnia at the war’s end. This acceptance was manifested in a constitutional structure that gave the Bosnian Serb region quasi-independence and the power to obstruct the emergence of an effective central government in Sarajevo.

The EU, having helped rescue Bosnia from its past by mortgaging its future, seems in no hurry to change the country’s purgatory-like status. European leaders have allowed their most useful tool for preserving the peace and leveraging change – the once-respected office of the High Representative – to be diminished to the point that many Bosnian officials treat the incumbent with disdain. But it should be recognized that, in post-Cold War Europe, it has proven highly dangerous to allow disrespect for European purpose and resolve to take root.

If the Bosnians lack the capability to modify the iron corset bequeathed to them at Dayton, the EU remains indifferent, and the United States is preoccupied with the Middle East, South Asia, and China, what lies ahead? Leaving Bosnians to explore the options that befall a failed state (with a Muslim plurality) – located within Europe but on the margins of its prosperity, unity, and relative social cohesion – is to acknowledge policy bankruptcy and let others roll the dice on ways to end the current stalemate.

Some in Europe assert that over time the parties may eventually see the benefits of greater cooperation, that dissolution will not occur, or that, if it does, it will likely be relatively tranquil. Such assumptions do not inspire confidence. Violence has been the traditional agent of change in the Balkans, and the level of frustration in Bosnia is growing.

Faute de mieux, the Americans have allowed the burden of dealing with these issues and sorting out the unfinished business of Dayton to fall to the EU. Indeed, it is past time for the EU to take the diplomatic lead in fixing what Dayton left undone. While the new EU’s governance structure seems, at least on paper, to lend itself to more robust efforts in the Balkans, diplomatic habits die hard, and the Union will need to overcome its continuing legacy of relying on carrots without sticks to deal with knotty Balkan problems.

Regardless of the EU’s unhappy diplomatic past in the Balkans, the most practical way forward is to seek political reform in Bosnia rather than hoping for the US to resume its leadership role. Any EU effort should be based on the following reinforcing elements:

• A conference of the three Bosnian parties this spring to fix the Dayton agreement by strengthening the central government sufficiently to enable Bosnians to fulfill the requirements of the EU accession process while maintaining the existing entities. This gathering should include both the US and Serbian governments as active observers. European and US leaders would have to convey to the Bosnians and others that failure is not an option and convince them of the EU’s bottom-line unwillingness to accept opposition from those in Bosnia who impede the EU accession process.

• Since Serbia is essential to the continued existence of Republika Srpska, pressure must be brought to bear on its government, which seeks EU membership, to make clear to obstructionist Bosnian Serb leaders that they cannot hold a referendum on independence, and that they must accept enhanced central-government powers.

• Support for civil-society groups and democratic parties prior to elections throughout Bosnia this October. The EU and the US should underscore the need for political change and for candidates who support EU accession as indispensable to Bosnia’s economic and political progress.

The alternative – tinkering with reform while hoping that time, EU money, and a watchful eye will move the three Bosnian communities toward political harmony – is not prudent policy.

Copyright: Project Syndicate, 2010.
www.project-syndicate.org

Europe’s Lost Decade

MILAN – “Never confess a failure. Whenever you are about to miss a target, just move the deadline. Sooner or later, you will make it.” This simple rule, largely followed in Eastern Europe in the socialist days, is also popular among European Union bureaucrats in Brussels today.

On March 24, 2010, what all observers of European affairs have long known will be written in stone: the EU failed to attain the targets for economic growth, efficiency, and modernization set ten years ago in Lisbon. Rather than becoming “the most dynamic economy in the world,” the EU is losing ground.

The gap in per-capita income of the EU15 (the membership prior to the accession of mainly post-communist states in 2004) relative to the United States – taken as a reference in many targets – is unchanged at 30-40%, depending on the adjustment to purchasing power parity. The EU as a whole has attained none of the 17 quantitative targets set in the Lisbon Strategy. And all the qualitative targets, added later in the process, have been used mainly to feed national bureaucracies preparing plans within the so-called “open coordination method.”

Rather than digging into the reasons for this general failure, the EU is now issuing a document that calls for new ambitious targets for 2020. For another ten years, it seems, we can talk big and dream.

What failed in the Lisbon Strategy? Basically, everything – and the method, above all. Rules without any monitoring and enforcement mechanism are merely empty rhetoric. The “peer pressure” that should have been exerted in the open coordination method has been a powerful tool to exert “peer protection” in justifying delays in attaining the targets.

Second, the targets themselves were wrong, and there were far too many. Those who bravely tried to list them came out with three-digit totals. The only justification for such a long list is that every government could claim to have attained at least one target – a trophy to exhibit at home.

Moreover, the targets mostly involved policies that do not require any supra-national coordination, such as labor policies, childcare, and pensions. Hence, the soft method, and the absence of sanctions for countries delaying the process. In addition, the targets were generally set in terms of outcomes rather than policy instruments. The government of a country hit by a positive shock could attain a target even without having done anything to achieve it.

For all of these reasons, postponing Lisbon to 2020 is a no-brainer. Rather than wasting time and public money to set up or maintain the Lisbon bureaucracy, the EU should closely monitor the attainment of those national and EU-wide targets that involve significant spillovers across jurisdictions. A clear case is environmental protection. The 2012 Kyoto targets are attainable. Any delay by one country in moving in that direction would jeopardize efforts made in other countries.

Another example is energy distribution. The EU is still very far from having a single energy market, which makes it more costly for business and households and reduces efficiency. Here, there is a strong case for having EU-wide targets rather than simply national objectives and sanctions for countries that do not liberalize their markets.

Other targets could instead be set at the EU level, rewarding those countries that contribute the most to attaining them. One such target is skilled migration. Europe is losing out in the worldwide race for talent, and the global recession is providing an opportunity to redesign the geography of human capital endowments.

Selective migration policies and talent-friendly environments supported at the European level could significantly improve the net skill migration balance, which is currently negative or zero in all EU countries. There is a pool of about 300 million graduates to build on, and, according to solid evidence, they react to changes in economic incentives with respect to their location choices.

In this context, there are clear spillovers across jurisdictions, not least because talents go where there is a critical mass of job opportunities for them. People often move as “power couples” looking for good jobs for both adult members of the household. With popular destinations like the United States and Canada cutting back on research and public education and facing the need to raise top tax rates, Europe has a unique opportunity to attract skilled migrants and reduce the exodus of European researchers.

The so-called “blue-card” process has so far been largely unsuccessful, because there was no incentive for individual states to coordinate their policies. How about conditioning EU support to national researchers on the adoption of selective migration policies? That would be the first serious step towards creating a single market for labor in Europe.

If Europe were to take such steps, it would look not only like the land of redistribution, but also like a place where the environment is taken care of, energy distribution is efficient, and talent is highly rewarded.

Copyright: Project Syndicate, 2010.

http://www.project-syndicate.org/