BUSINESS CYCLE

BUSINESS CYCLE, term used in economics to designate changes in the economy. Ever since the Industrial Revolution, the level of business activity in industrialized capitalist countries has veered from high to low, taking the economy with it.

Phases of the Business Cycle

The timing of a cycle is not predictable, but its phases seem to be. Many economists cite four phases prosperity, liquidation, depression, and recoveryusing the terms originally developed by the American economist Wesley Mitchell (18741948), who devoted his career to studying business cycles. During a period of prosperity a rise in production becomes evident. Employment, wages, and profits increase correspondingly. Business executives express their optimism by investing to expand production. As the upswing continues, however, obstacles begin to occur that impede further expansion. For example, production costs increase; shortages of raw materials may further hamper production; interest rates rise; prices rise; and consumers react to increased prices by buying less. As consumption starts to lag behind production, inventories accumulate, causing a price decline. Manufacturers begin to retrench; workers are laid off. Such factors lead to a period of liquidation. Business executives become pessimistic as prices and profits drop. Money is hoarded, not invested. Production cutbacks and factory shutdowns occur. Unemployment becomes widespread. A depression is in progress. Recovery from a depression may be initiated by several factors, including a resurgence in consumer demand, the exhaustion of inventories, or government action to stimulate the economy. Although generally slow and uneven at the start, recovery soon gathers momentum. Prices rise more rapidly than costs. Employment increases, providing some additional purchasing power. Investment in capital-goods industries expands. As optimism pervades the economy, the desire to speculate on new business ventures returns. A new cycle is under way. In fact, business cycles do not always behave as neatly as the model just given, and no two cycles are alike. Business cycles vary considerably in severity and duration. In the U.S. the major cycles have lasted slightly longer than eight years, on the average. Minor cycles have a shorter span, generally from two to four years. The American economist Alvin Hansen (18871975) accounted for 10 major and 23 minor cycles in the U.S. between 1857 and 1937. The most severe and widespread of all economic depressions occurred in the 1930s. The Great Depression affected the U.S. first but quickly spread to Western Europe. The American economy, however, suffered the most. From 1933 to 1937 the U.S. began to recover from the depression, but the economy declined again from 1937 to 1938, before regaining its normal level. This decline was called a recession, a term that is now used in preference to liquidation. Real economic recovery was not evident until early 1941. Since then, the U.S. has been spared another severe depression. Recessions have, however, occurred repeatedly. In addition, the general pace of economic growth has slowed.

Special Cycles

Apart from the traditional business cycle, specialized cycles sometimes occur in particular industries. The building construction trade, for example, is believed to have cycles ranging from 16 to 20 years in length. Prolonged building slumps made two of the most severe American depressions worse (in 1872 73 and in the 1930s). On the other hand, an upswing in building construction has often helped to stimulate recovery from a depression. Some economists believe that a long-range cycle, lasting for about half a century, also occurs. It has been shown that a periodic shift in wholesale prices recurred in the U.S. throughout the 19th and early part of the 20th centuries. The pattern went as follows: From about 1790 to the early 1800s, wholesale prices rose; about 1815 this trend was reversed, and prices declined until the middle of the century; after another rise, prices again declined following the American Civil War and continued into the 1890s; a rising-price trend took over until 1920; thereafter prices fell until 1933. These rise-and-fall cycles averaged about 50 years each. Studies of economic trends during the same period were made by the Russian economist Nikolai Kondratieff (1892c. 1956). He examined the behavior of wages, raw materials, production and consumption, exports, imports, and other economic quantities in Great Britain and France. The data he collected and analyzed seemed to establish the existence of long-range cycles similar to those just described for wholesale prices. His "waves" of expansion and contraction fell into three periods averaging 50 years each: 17921850, 185096, and 18961940. Such studies, however, are not conclusive.

Causes of Cycles
Economists did not try to determine the causes of business cycles until the increasing severity of economic depressions became a major concern in the late 19th and early 20th centuries. Two external factors that have been suggested as possible causes are sunspots and psychological trends. The sunspot theory of the British economist William Jevons was once widely accepted. According to Jevons, sunspots affect meteorological conditions. That is, during periods of sunspots, weather conditions are often more severe. Jevons felt that sunspots affected the quantity and quality of harvested crops; thus, they affected the economy. A psychological theory of business cycles, formulated by the British economist Arthur Pigou (1877 1959), states that the optimism or pessimism of business leaders may influence an economic trend. Some politicians have clearly subscribed to this theory. During the early years of the Great Depression, for instance, President Herbert Hoover tried to appear publicly optimistic about the inherent vigor of the American economy, thus hoping to stimulate an upsurge. Several economic theories of the causes of business cycles have been developed. According to the underconsumption theory, identified particularly with the British economist John Hobson (18581940), inequality of income causes economic declines. The market becomes glutted with goods because the poor cannot afford to buy, and the rich cannot consume all they can afford. Consequently, the rich accumulate savings that are not reinvested in production, because of insufficient demand for goods. This savings accumulation disrupts economic equilibrium and begins a cycle of production cutbacks. The Austrian-American economist Joseph Schumpeter, a proponent of the innovation theory, related upswings of the business cycle to new inventions, which stimulate investment in capital-goods industries. Because new inventions are developed unevenly, business conditions must alternately be expansive and recessive. The Austrian-born economists Friedrich von Hayek and Ludwig von Mises (18811973) subscribed to the overinvestment theory. They suggested that instability is the logical consequence of expanding

production to the point where less efficient resources are drawn upon. Production costs then rise, and, if these costs cannot be passed on to the consumer, the producer cuts back production and lays off workers. A monetary theory of business cycles stresses the importance of the supply of money in the economic system. Since many businesses must borrow money to operate or expand production, the availability and cost of money influence their decisions. Sir Ralph George Hawtrey (18791975) suggested that changes in interest rates determine whether executives decrease or increase their capital investments, thus affecting the cycle.

Accelerator and Multiplier Effects

Basic to all theories of business-cycle fluctuations and their causes is the relationship between investment and consumption. New investments have what is called a multiplier effect: that is, investment money paid to wage earners and suppliers becomes income to them and then, in turn, becomes income to others as the wage earners or suppliers spend most of their earnings. An expanding ripple effect is thus set into motion. Similarly, an increasing level of income spent by consumers has an accelerating influence on investment. Higher demand creates greater incentive to increase investment in production, in order to meet that demand. Both of these factors also can work in a negative way, with reduced investment greatly diminishing aggregate income, and reduced consumer demand decelerating the amount of investment spending.

Regulating the Cycle

Since the Great Depression, devices have been built into the U.S. economy to help prevent severe business declines. For instance, unemployment insurance provides most workers with some income when they are laid off. Social security and pensions paid by many organizations furnish some income to the increasing number of retired people. Although not as powerful as they once were, labor unions remain an obstacle against the cumulative wage drop that aggravated previous depressions. Government support of crop prices shields farmers from disastrous loss of income. The securities markets are now regulated by the Securities and Exchange Commission and the Federal Reserve System in order to prevent a recurrence of the 1929 financial collapse. The government can also attempt direct intervention to counter a recession. There are three major techniques available: monetary policy, fiscal policy, and incomes policy. Economists differ sharply in their choice of technique. Monetary policy is preferred by some economists, including the American Milton Friedman, and is followed by most conservative governments. Monetary policy involves controlling, via the central Federal Reserve Bank, the money supply and interest rates. These determine the availability and costs of loans to businesses. Tightening the money supply theoretically helps to counteract inflation; loosening the supply helps recovery from a recession. When inflation and recession occur simultaneouslya phenomenon often called stagflationit is difficult to know which monetary policy to apply. Considered more effective by American economist John Kenneth Galbraith are fiscal measures, such as increased taxation of the wealthy, and an incomes policy, which seeks to hold wages and prices down to a level that reflects productivity growth. This policy has not had much success in the post-World War II period.

The U.S. has not experienced a major depression since the 1930s, in part because of the federal governments use of anticyclical measures, including wage and price controls, and deficit spending. After a period of economic stagflation in the U.S. during the 1970s, inflation and unemployment were brought under control in the 1980s. The national debt, however, almost quadrupled in that decade. Thus, the federal governments response to the recession that began in 1990 did not include major new spending programs because of a reluctance to increase the deficit. In fact, an important concern in dealing with the problems of the business cycle is the fear that inappropriate measures might precipitate a severe recession or even a depression.

BUSINESS
BUSINESS, pattern of complex operations in the lives of people concerning all those functions that govern the production, distribution, and sale of goods and services for the benefit of the buyer and the profit of the seller. Control of production in the modern world is largely in the hands of individual businesspeople or entrepreneurs, who organize and direct industry, induced to do so by the expectation of business profits. Since the beginning of that extraordinary era of economic progress ushered in by the Industrial Revolution, old ways of conducting business have been modified, and new forms of business organization have been introduced. This has enabled various branches of industry to adapt to changing conditions and to function more easily, efficiently, and profitably. The main forms of business organization are described below.

Individual Proprietorship
In this form of organization the owner is in sole charge of the business and is responsible for its success or failure. Unless an activity is specifically prohibited by law, no line of business is closed to an owner. Although advantages for the small business exist in this form, certain drawbacks make it undesirable for larger concerns. In the first place the single owner is seldom able to invest as much capital as can be secured by a partnership or a corporation. If single owners are able to invest large amounts of capital, they run great risk of losing it all because they are personally liable for all the debts of their businesses. This is called unlimited liability. Only in agriculture is the individual owner still a predominant figure.

Partnership
A business association of two or more persons who have agreed to combine their financial assets, labor, property, and skill or some or all of these things. The agreement to form an association of this nature is called a partnership contract and may include general policies, distribution of profits, fiscal responsibilities, and a specific length of time during which the partnership is in effect. Unless a limited partnership has been established, in which one of the partners assumes complete financial responsibility for losses, all parties equally share the burden of loss and debts.

The Corporation
It was to provide a financing device that did not have the weaknesses of the single ownership and the partnership that the corporation came into existence. According to the classic definition given by Chief Justice of the U.S. John Marshall in the Dartmouth College case in 1819, "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law." In general, the corporation laws of

each state set forth the requirements for the persons who may incorporate. The granting of a charter usually follows when the requirements for incorporation have been met. Business combinations may be classified in several ways. The major simple forms of integration are as follows. A vertical integration characterizes companies that engage in the different steps in manufacturing or marketing a product. A horizontal combination brings under one control companies engaged in the sale of the same or similar products. A complimentary combination takes place when companies selling allied, but not competitive, products combine. A conglomerate combination involves firms in widely diverse industries, such as an automobile company owning a food manufacturer or book publisher. After the corporation became the accepted method of carrying on business in the U.S., means were sought to control production and prices by combination. One of the early methods was pooling. A pool was a federation of independent units sometimes used to limit production, to control prices, or to accomplish both purposes. The one major disadvantage of pooling was that the arrangement was temporary. The corporate structure then sought a more permanent combination, and the trust seemed to meet the need. In a trust the stockholders of the corporation deposited their stock certificates with one or more trustees and received in exchange trust certificates. Many abuses of this practice developed, and the resulting demands for reform caused the breakup of the trusts. The business community then turned to the holding company, which is a corporation that holds the common stock of other corporations. As business became more competitive, new and more complex corporate combinations came on the scene. A merger is the absorption of one or more companies by another. In an amalgamation, the corporations involved form a new corporation, exchange their stock for that of the new corporation, and all give up their individual charters. An interlocking directorate exists when two or more corporations have officials who serve on the board of directors of each company. A community of interests, with respect to the control of corporations, exists when a small number of persons having other interests in common hold the stocks of two or more corporations. In the 1960s and 1970s a speedup occurred in the merger movement, particularly in connection with takeovers by conglomerates that brought under one management scores of companies belonging to unrelated industries. The number of mergers increased further in the mid-1980s. A corporate combination that is contrary to the letter and spirit of American antitrust laws is the cartel, a voluntary association of private business concerns for the purpose of coordinating marketing practices. It may engage in price fixing, limitation of production, the division of marketing territories, and the pooling of profits. Of great economic importance is the multinational corporation. Such companies maintain extensive business activities and large-scale production facilities throughout the world, and their revenues sometimes exceed the total revenues of some countries in which they operate.

Levels of Business Operation

The operation of large business firms is characterized by great complexity of organization and administration. The highest level of management is concerned with the overall planning and evaluation of production and distribution, and various administrative departments carry on the functions of research, production, finance, and marketing. Business management is a specialized field of study that investigates the requirements of efficiency in the context of technological expansion.

Regulation of Business by Government

Public interest requires that the organization and operation of business be subject to governmental regulation, and many laws have been enacted for the purpose of ensuring a competitive pluralism with regard to production and trade. Trusts and monopolistic practices are outlawed by the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914); stock and bond issues are under the control of the Securities and Exchange Commission.

Profit and Responsibility

In a free enterprise economy, business is governed by the theory that businesses profit to the extent that they serve their communities. Responsibility to consumers has become an established principle, and measures such as guarantees benefit the customer while enhancing the sellers reputation. Business ethics are determined by the competitive system, which makes it profitable to satisfy the consumer.

OFFICE SYSTEMS
OFFICE SYSTEMS, equipment used to create, store, process, or communicate information in a business environment. This information can be manually, electrically, or electronically produced, duplicated, and transmitted. The rapid growth of the service sector of the U.S. economy that began in the mid-1970s furnished a new market for sophisticated office automation. With the increasing incorporation of the integrated circuit into office equipment, the line between the computer and other equipment was blurred. Most modern office equipmentincluding typewriters, dictation equipment, facsimile (fax) machines, photocopiers, calculators, and telephone systemscontains a microprocessor. The computer has become virtually indispensable in such formerly manual tasks as text preparation, accounting, graphic design, production scheduling, and engineering design ( see COMPUTER-AIDED DESIGN/COMPUTER-AIDED MANUFACTURE). In addition, computers and computer-based equipment offer new functions such as voice mail and electronic mail that greatly increase the efficiency of offices.

Document Preparation

Office documents are generally mechanically or electronically produced records: letters, spreadsheets, memos, invoices, and so on. These are produced on a variety of equipment, including typewriters, dedicated word processors, and computers, and may be saved on paper or in electronically encoded form.

Typewriters

Introduced in the 1870s, the manual typewriter has all but disappeared from the modern office, having been replaced successively by the electric typewriter, the electronic typewriter, the dedicated word processor, and computer-based word-processing software. The electric typewriter uses either individually molded metal characters or a rotating ball with raised characters that strike a sheet of paper through an inked or coated ribbon to create an impression of the character on paper. Many electric typewriters have a separate ribbon segment that removes the impression from the paper, permitting the user to erase text. Electric typewriters have been supplanted, in turn, by electronic typewriters equipped with internal memory capable of storing anything from a few lines of text to more than 40,000 characters. This memory capability makes it possible for a user to produce many copies of the same letter with different addresses and salutations. A hybrid between electric typewriters and computers, electronic typewriters which contain a microprocessorcan automatically center headings, align decimal points in numerical tables, and flag words that are not found in its "spellcheck" memory. Most electronic typewriters also permit rudimentary editing of text before printing through the use of a small liquid crystal display window.

Word processors
In the early 1980s, dedicated word processorsspecial-purpose computers designed solely for word processingbecame common. Today, general-purpose personal computers with word-processing software have largely replaced the dedicated equipment. Word-processing software features multiple editorial functions that facilitate manipulation of text, including the ability to insert new text at any point in a document, delete text, "cut and paste" (move blocks of text to a new location), and search for and replace portions of textenabling users to make multiple changes in a document without extensive retyping. In addition, word-processing software may incorporate a type-composition function and a page-layout function, enabling the user to electronically design and lay out a printed pagekey features of the office activity that has come to be known as desktop publishing.Text generated by word processing can be stored on a magnetic disk or other medium for later use and may be transmitted to a printer to produce a document on paper, or "hard copy."

Computers
During the first half of the 20th century, financial and other numerical record-keeping tasks were performed manually or by bookkeeping machines, billing machines, tabulating equipment, and other types of electromechanical accounting devices. In the 1950s, such machines were increasingly replaced by mainframe computerslarge, very expensive, high-speed machines that require trained operators as well as a special temperature-regulated facility to prevent overheating. Use of these machines today is limited to large organizations with heavy-volume data-processing requirements. Time-sharingallowing more than one company to use the same mainframe for a feewas instituted to divide the cost of the equipment among several users while ensuring that the equipment is utilized to the maximum extent. Mainframes with remote terminals, each with its own monitor, allowing for simultaneous input by many users, became available in the mid-1970s. The advent of the minicomputer provided a far less expensive alternative. Microelectronics made manufacture of these smaller, less-complex machines practicable. Minicomputers, the first of which entered general business use in the early 1960s, are now widespread in commerce and government. Terminals linked to the central processing unit (CPU) are under the direct control of the individual user rather than centralized staff. It is the microcomputer or personal computer, however, that now plays the principal role in most office workplaces.

Desktop personal computers have become increasingly affordable, and it is now feasible to provide virtually every office worker with one. Personal computers may be equipped with suites of software with components for word processing, spreadsheets, charts and diagrams, e-mail, and Internet access, which function together in an integrated fashion. Most companies link or "network" multiple personal computers into a unified system so that workers can share resources and data, stored on a minicomputer or a host microcomputer known as a server, as well as peripheral equipment such as printers. The local area network (LAN) was created in response to the need for a standardized system of linking computers together in a company. The most common LAN technology is Ethernet, which transmits data over copper wires among personal computers and other computers at rates of 10 or 100 million bits per second (bps), depending on the system. More advanced LANs have been developed that will send data over optical fibers at a rate of 1 billion bps, carrying audio, video, and graphics with high quality. Where the computers are not in actual physical proximity, a wide area network (WAN) can be achieved using telephone, microwave, or communications satellite linkage. Where LANs or WANs are not available, as in small businesses or home offices, a device known as a modem, usually already built into modern personal computers, provides "connectivity." Modems permit two computers to communicate by telephone lines in order to access databases, transmit files, upload and download fax transmissions, and send and receive e-mail. Early transmission speeds using this equipment were relatively slow300 bps. Some modems now operate at speeds of 56,000 bps and have error-checking and data-compression features. In many areas, connections to the Integrated Services Digital Network (ISDN) are available; with such connections, modems may operate at speeds as high as 128,000 bps. Text materials in typed or printed form can be input directly into a computer by means of a scanner. To read text, optical character recognition (OCR) software must first be used to convert printed documents electronically into computer-readable files. Scanners obviate the need to rekey printed text in order to input and edit it; they can also be used to input graphic material.

Dictation equipment
Dictation units use a microphone and record/playback device to input speech electronically for storage on a magnetic tape, or other magnetic medium, to be used at any later time for transcription by typists. The equipment commonly includes a foot-actuated control that enables typists to play, stop, reverse, or fast forward a recording while their hands remain free to operate a keyboard. In 1993, dictation software for personal computers became available commercially. The software recognizes spoken words and converts them into printed words on the personal computers video display screen. Users can utilize the software to compose e-mail messages, reports, and letters.

Document Reproduction and Storage

Office machines for the full-size reproduction of documents can be divided into two groups: copiers designed to make one or several reproductions, and duplicators designed to make many copies. Companies still store paper documents in file cabinets of various types, but much document storage today is electronic or on film.

Copiers and duplicators

Most modern copiers are electrostatic devices in which document images are created by means of electrical charges and powdered ink, or toner, particles. In the electrophotographic (or "xerographic") process the most common photocopying method, a mirror image of a printed page is induced electrostatically onto a metal cylinder from which it is transferred to a sheet of plain paper. Copier speeds range from a few pages per minute to more than 100 pages per minute. Advanced devices are equipped with automatic feeders, collators, and staplers. Some machines can copy both sides of a document automatically, reduce or enlarge the image, and reproduce color documents in color. Instead of electrostatic technology, duplicators employ offset lithography, in which a specially prepared master is used to produce multiple copies. Offset printing, using small presses, is most often used in large organizations that have a central printing department with trained personnel. In general, offset printing is economical for runs of 1000 copies or more. In 1990, fast printing machines were introduced that accept input in electronic form (from disks or over a LAN) instead of requiring a paper original. Since press preparation is not needed, such machines can economically print only as many copies as are immediately needed. They eliminate long press runs and the need for storage space in warehouses. Models that print in color as well as black and white are now available. Several other copying and duplicating processes retain a very limited role in the contemporary business office, but are still used in schools and other institutions. In spirit duplication, a paper master bearing images formed from carbon dye is moistened with an alcohol solution, dissolving some of the dye, which is then deposited on a piece of paper. This process is repeated rapidly to print multiple copies. In mimeography, a stencillike master is created by typing or otherwise removing an ink-impervious coating from a fibrous tissue. The master is mounted on a cylinder that forces ink through the stencil onto paper. The diazo process, using ammonia-sensitive paper, is still used in engineering and architectural offices to reproduce graphics at scales that can only be accommodated on large sheets of paper. The electrophotographic process is supplanting diazo, however; photocopiers are available that can handle sheets approximately 1 m (36 in) wide by any manageable length.

Computer printers
A considerable volume of office computer output is via the printer. Among the earliest printers used with personal computers in business offices were daisy-wheel and thimble printers, so-called because of the shape of their printing elements. Although offering type quality comparable to a typewriters, they were slow and could accommodate only text, not graphic materials. As a result, they have been supplanted in most offices by dot-matrix, ink-jet, and laser printers. The dot-matrix printer may have a 9- or 24-pin print head. The pins impact the paper through a ribbon, creating patterns of dots in the shape of letters and numbers in multiple fonts and type sizes. The ink-jet printer, an advance over the dot-matrix, provides both high resolution (the higher the resolution, the better the print quality) and quiet operation. The laser printer represents an even greater advance. Similar in technology to a photocopier, it offers speed, high resolution of 300 dots or more per inch, ability to reproduce complex graphics, and silent operationall of which make it virtually essential for desktop publishing. Full-color printers, as well as those that print only in black and white, are available in both ink-jet and laser technologies.

Microfilm/Microfiche

Although computer-generated documents are usually stored as files on magnetic tape or disks, both computer documents and paper documents may also be stored on microfilm or microfiche. The space

needed for document storage is reduced, and handling and retrieval are simplified by use of microfilm equipment, which photographically reduces images, producing miniature transparencies that can then be magnified for viewing or printing.

CD-ROMs
In the late 1990s, inexpensive compact disk writers became available. These machines "burn" data onto a blank CD with a Read-Only Memory (ROM) to create a CD-ROM. With their large capacity (about 600 megabytes), CD-ROMs are ideal for storing graphic images, backups of network drives, data archives, and encyclopedias that would not fit conveniently on other storage media.

Communications
In a fax machine, the dark and light areas on text or graphic material are converted into a series of electrical impulses and sent over the telecommunications network. At the receiving site, the incoming signal is reconstructed to produce a facsimile of the transmitted information. Special types of fax equipment can transmit microfilm images to remote locations for reconstruction as microfilm or paper copies. In addition, many personal computers with internal fax modems can send and receive faxes directly, without making a paper copy and inserting it into a fax machine. Telex, a system of direct-dial teleprinter exchange, and teletypewriter exchange (TWX) are wellestablished examples of electronic messaging technology. TWX is customarily used within North America, and telex for international message transmission. In either case, a message is entered at a typewriterlike terminal for transmission over a network of telegraph lines to a designated compatible receiver that prints the message onto paper. An operator need not be present at the receiver. Some word processors can also prepare messages for transmission to TWX or telex terminals or to other word processors.

E-mail
E-mail has become a key part of the communications networks of most modern offices. Data and messages can be transmitted from one computer to another using telephone lines, microwave links, communications satellites, or other telecommunications equipment. The same message can be sent to a number of different addresses. E-mail is sent through a companys own LAN or beyond, through a nationwide or worldwide communications network. E-mail services use a mail server to store messages and data and to route them to their intended destination. With a subscription to an Internet service provider, an individual personal computer user needs only a modem and a telephone line to send and receive written or vocal messages and access resources on the World Wide Web.

Voice mail
Like an answering machine, voice mail provides a recorded greeting and records messages when the called party does not answer. A computer-based system, it can also record messages when the phone is busy, even from more than one caller at a time. It offers callers various choices through voice "menus:" to listen to a recorded announcement on any of various subjects; to complete a call to a designated extension; to find an unknown extension by dialing the first few letters in the called partys name; to leave a message in a voice mailbox; or to connect to a human attendant. A called party can

retrieve, save, delete, or reply to messages, or forward them to other voice mailboxes.

Telecommuting
All of the electronic links among the people in a modern office can be extended beyond the buildings walls to workers at home or in satellite offices. This capability has led to a sharp increase in telecommuting. In 1997 an estimated 11 million people in the U.S. worked as telecommuters, compared to 5.5 million in 1991. Managers, professional employees, and self-employed workers are the major participants in this trend. Reports of increased productivity among people who no longer spend hours traveling from home to office indicate that further increases in telecommuting are likely.

Other Advances in Automation

Although some purely mechanical devices remain in use, the newest models of many other office machines contain electronic components. These devices include mail-handling equipment (postage meters, scales, letter-opening machines, folding and inserting machines); automatic addressing equipment; audio paging systems; paper cutters, binders, and staplers; time-recording machines; and coin-sorting, counting, wrapping, and related money-handling equipment. Electronic calculators, both hand-held and desktop devices, have virtually replaced older, strictly mechanical adding machines. They are built around an integrated circuit and incorporate a display unit, such as a liquid-crystal display; a keyboard; and, in some models, a paper-printing function. Calculators designed for statistical, engineering, and scientific tasks are programmed to perform predetermined sequences of mathematical operations automatically. Even a labor-intensive task like mail distribution has been automated to some extent. Fully automated mail delivery machines are used in some very large offices. Mail-carrying robots travel along an invisible fluorescent guide-path painted onto the floor, illuminating the path by ultraviolet light and tracking it by photoelectric sensors. Stops and other directions are encoded in the guide-path. Such systems increase the frequency of mail delivery and eliminate most of the need for central collection and redistribution.