What ever happened to the paperless office?

The dream seems to recede further into the future every year. But now sales show that offices may finally be turning the page on paper use.

For office innovators, the unrealized dream of the "paperless" office is a classic example of high-tech hubris. Today's office drone is drowning in more paper than ever before.

But after decades of hype, American offices may finally be losing their paper obsession. The demand for paper used to outstrip the growth of the US economy, but the past two or three years have seen a marked slowdown in sales - despite a healthy economic scene,

Analysts attribute the decline to advances in digital databases and communication systems, employment trends, and a generation of office workers who are more comfortable with the new technology. Escaping our craving for paper, however, will be anything but a cold-turkey affair.

"Old habits are hard to break," says Merilyn Dunn, communications supplies director for InfoTrends/CAP Ventures, a market research firm in Weymouth, Mass. "There are some functions that paper serves where a screen display doesn't work. Those functions are both its strength and its weakness."

In the early to mid-'90s, a booming economy and improved desktop printers helped boost paper sales by 6 to 7 percent each year. The convenience of desktop printing allowed office workers to indulge in printing anything and everything at very little effort or cost.

But now, the growth rate of paper sales in the United States is flattening by about half a percent each year. Between 2004 and 2005, Ms. Dunn says, plain white office paper will see less than a 4 percent growth rate, despite the strong overall economy. A primary reason for the change, says Dunn, is that for the first time ever, some 47 percent of the workforce entered the job market after computers had already been introduced to offices.

"We're finally seeing a reduction in the amount of paper being used per worker in the workplace," says John Maine, vice president of RISI, a pulp and paper economic consulting firm in Charlottesville, Va. "More information is being transmitted electronically, and more and more people are comfortable with the information residing only in electronic form without printing multiple backups."

In addition, Mr. Maine points to the lackluster employment market for white-collar workers - the primary driver of office paper consumption - for the shift in paper usage.

The real paradigm shift may be in the way paper is used. Since the advent of advanced and reliable office-network systems, data storage has moved away from paper archives. The secretarial art of "filing" is disappearing from job descriptions. Much of today's data may never leave its original digital format.

The changing attitudes toward paper have finally caught the attention of paper companies, says Richard Harper, a researcher at Microsoft and coauthor of the book, "The Myth of the Paperless Office" (2002). "All of a sudden, the paper industry has started thinking, 'We need to learn more about the behavioral aspects of paper use,' " he says. "They had never asked, they'd just assumed that 70 million sheets would be bought per year as a literal function of economic growth."

To reduce paper use, some companies are working to combine digital and paper capabilities. For example, Xerox Corp. is developing electronic paper: thin digital displays that respond to a stylus, like a pen on paper. Notations can be easily erased or saved digitally.

Another idea, intelligent paper, comes from Anoto Group. It would allow notations made with a stylus on a page printed with a special magnetic ink to simultaneously appear on a computer screen.

Even with such technological advances, the improved capabilities of digital storage continues to act against "paperlessness," argues Paul Saffo, a technology forecaster at the Institute for the Future, a think tank in Palo Alto, Calif. In his prophetic and metaphorical 1989 essay, "The Electronic Piñata," he suggests that the increasing amounts of electronic data necessarily require more paper.

"The information industry today is like a huge electronic piñata, composed of a thin paper crust surrounding an electronic core," Mr. Saffo wrote. The growing paper crust "is most noticeable, but the hidden electronic core that produces the crust is far larger - and growing more rapidly. The result is that we are becoming paperless, but we hardly notice at all."

In the same way that digital innovations have increased paper consumption, Saffo says, so has video conferencing - with its promise of fewer in-person meetings - boosted business travel.

"That's one of the great ironies of the information age," Saffo says. "It's just common sense that the more you talk to someone by phone or computer, it inevitably leads to a face-to-face meeting. The best thing for the aviation industry was the Internet."

As buzzwords go, "paperless" has been bandied about for a long time with little or no results. The term "paperless clearing houses" was probably first coined in a 1966 article in the Harvard Business Review in reference to the emergence of digital data storage.

But "paperlessness" did not enter the public's imagination until 1975, when a Business Week article entitled "The Office of the Future" predicted that by 1990 "most record-handling will be electronic."

The article quoted Xerox's George Pake, who rightly predicted a "TV-display terminal with keyboard" on office desks by 1995. "I'll be able to call up documents from my files on the screen, or by pressing a button," Pake told Business Week. "I can get my mail or any messages. I don't know how much hard copy [printed paper] I'll want in this world."

Throughout the 1980s and '90s, the term "paperless" came to embody technology's promise to permanently change the way people do business.

The exuberance sometimes took on a life of its own, with the trendiest companies demanding "paperlessness" long before it was practical.

In 1993, advertising mogul Jay Chiat of Chiat/Day was inspired to "free" his employees from paper - and to make that freedom mandatory - by eliminating desks and filing cabinets. The awkward, abortive attempt backfired: Employees started storing paper in the trunks of their cars and hauling it around the office on toy wagons.

"You can never go wrong by betting that change will go slower than everyone expects," says a sage Saffo. "We're still lurching into the paperless office future. That's a little bit of a surprise to me, but I didn't expect paper to disappear completely."

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