Bermuda Re-Launches Its E-Development Initiative

Nigel Hickson

The small country of Bermuda, located just 650 miles off the Eastern shore of the U.S., has re-launched its efforts to attract more e-businesses. As a jurisdiction with no income, sales or capital-gains tax and with a world-class IT infrastructure, the country has been a little puzzled why e-businesses have not flocked to the island during the last five years.

"Clearly at one point back in 1999 or 2000, we had passed our Electronic Transaction Act, a piece of e-commerce legislation which sets into place necessary legal safeguards for electronic transactions," explained Nigel Hickson, e-business consultant to the current minister of Tourism, Telecommunications and E-Commerce. "We were trying to attract Internet start-ups to come and incubate themselves in Bermuda. Working with the private sector, we set up space where e-business companies could come and flourish. That was our original strategy, which was of course also being undertaken by a lot of countries at the time."

But the flood of new e-businesses that Bermuda hoped for never materialized. The dot com frenzy peaked and died. And five years later, the country is now taking a slightly different track in renewed efforts to attract more e-business. "We've been repositioning ourselves to a large extent," said Hickson. "Because of the nature of Bermuda -- small with not much land, but a fairly sophisticated jurisdiction in terms of international business, with a lot of re-insurance businesses and trusts -- we realized we are better suited to be a platform for business-to-business e-business rather than business-to-consumer."

That new strategy stems from a more realistic assessment of what the country can offer: political stability, a highly educated workforce and a country where Internet penetration is among the highest in the world. "We have 73 percent of our homes connected to the Internet," said Hickson, "as well as 92 percent of our businesses with Internet connections. So e-business is endemic to the whole place. It certainly is not just on the periphery."

However, because land is scare -- the entire country comprises no more that 25 square miles -- and because the cost of living is extremely high, Bermuda has realized that it is not going to be an ideal site for large numbers of call centers or for relatively cheap e-business applications. So according to Hickson, the majority of business-to-consumer e-businesses they were tending to attract were pornography and gaming Web sites -- activities prohibited by Bermuda law. A new strategy was needed.

Responsive To Business
Initially, back in 1998-1999, four teams of private-sector and government representatives were set up to address and formulate legislation, policies and programs to address the entire gambit of issues that e-business needed resolved: legal, telecommunications infrastructure, public and fiscal policy and commercial applications.

Stephen Davidson, now head of sales and marketing for QuoVadis, a world-class digital certificate and managed-security services provider (MSSP), served on one of these teams as did the other co-founder of QuoVadis. "It was in those meetings that we actually worked out the opportunity for QuoVadis and we formed the business," explained Davidson.

He added that one of the elements, that in his view makes Bermuda special, is the sense of partnership between the business community and government in the formation of legislation and the regulatory environment.

"With a permanent population of under 70,000 people, if Bermuda were in the U.S., it wouldn't merit a Wal-Mart," he said. "Yet the population has a high education level and a lot of exposure to international business -- a lot of trained lawyers, accountants and IT people. So although Bermuda is the size of a town or a county, the