Bermuda has an "excellent opportunity to become the global electronic hub for the storage, processing and dissemination of digital information'', the chairman of the Bermuda Stock Exchange has told The Institute of Directors.

At the Institute's annual dinner, BSX chairman Arthur B. Sculley expressed a belief that the information industry could become a third "leg'' of the economy, complementing both tourism and international business.

Mr. Sculley said Bermuda could become the "Information Island'' within five or six years. But the biggest hurdle to first overcome was the cost of telecommunication services.

He said, "At the moment, we are simply not competitive internationally.'' While he is optimistic that will change, he questions whether the Island would be able to adapt quickly enough to avoid giving up its advantages.

He emphasised the need to ensure that children had access and encouragement to participate in the Information Age and prepare them for hi-tech jobs of the future.

But he said, "The only major competition I see for us is Singapore. Given their size, they have a number of advantages that we do not have. But I believe Bermuda's advantages still give us an opportunity of being the leader and the premier electronic global hub for storage, processing and dissemination of digital information.

"Furthermore, it could open numerous profitable opportunities for local and offshore business, be stimulating and be a great deal of fun.'' Local advantages include the current telecommunications infrastructure, the Island's sophistication, good reputation, clean business environment, leadership as an offshore business centre, a highly regarded insurance centre and strategic location.

Other advantages include the responsive regulatory and legislative environment, tax neutrality, political and economic stability, and, fresh land at the base lands to site a technology and business park.

Mr. Sculley said, "This could become the catalyst for attracting some very interesting multi-national and virtual organisations to Bermuda.'' Bermuda, he said, could become the innovative centre for the securitisation of insurance risk into capital market instruments, offshore financial derivatives, hedge funds, a data warehouse and processing centre.

He said, "Bermuda could become the `Switzerland of data' for bona fide corporations. Another area is the electronic distribution of software.

"At the moment, it is still done in `shrink wrapped' form from places like Ireland, but Bermuda is ideally situated to become an electronic distribution centre.

"Another area of promise is electronic commerce. In 1996, over a billion dollars of business was done on-line. There are excellent opportunities here for North American, European and Asian companies to locate some of their international activities at the Technology Park.'' Mr. Sculley also believes the Island's professional environmentalists and conservators could use the Internet to show interested people around the world Bermuda's natural resources and national treasures.

He said digitisation; advanced, low-cost, high powered, personal computers; telecommunications advancements; globalisation; and, the new phenomenon of virtual organisations were reasons why the information age has burst upon the world.

The old world of centralised, standardised, process orientated and hierarchical working structures was being replaced by decentralisation, customisation, creativity and much flatter working structures.

Digitisation means text, video, audio, data, pictures and images can be put into the language of computers, a language that can then be easily stored in very tiny chips. The information can be manipulated, integrated and transmitted instantly across fibre-optic cables.

With the capacity of silicon computer chips doubling every 18 months, Mr.

Sculley foresees an age in the near future when "we will be wearing computers on our wrists, downloading recipes on our kitchen computer as we cook and sitting at home reading up-to-the-minute articles'' from various international newspapers.

Telecommunications developments have resulted in dramatic cost reductions and growth in capacity. Telecommunications deregulation has had a significant impact on the movement of more information across longer distances at faster speeds.

Mr. Sculley sees the world becoming smaller at a faster rate. He said news, information, ideas all travel instantly. Globalisation is an important reality for the Information Age.

And, the phenomenon of virtual organisations has brought out an incredible amount of creativity in content, which have applications and accessibility worldwide.

He said, "No longer do individuals or small companies need the resources of large multi-national organisations or governments to have an impact on the global economy. I like to call these virtual organisations centres of excellence.

"They concentrate on certain areas of expertise and work in collaboration with partners -- either in their home country or in other countries -- that are connected to this fast global network.

"For example in New York City over the past three years, 1,200 virtual companies have been created south of 40th Street which used to be the industrial zone and garment district. This area is now called Silicon Alley.'' BUSINESS BUC ARTHUR SCULLEY -- The chairman of the BSX believes Bermuda could become the "Information Island''.