Taking questions from the floor, Negroponte tells a Xerox employee to "exercise his options soonest". A newspaper owner asking about the future of his industry, is told, wryly: "The unfortunate thing about newspapers is the word paper." Middle management is belittled as relics of the past; in fact middle anything, says Negroponte will vanish without a trace. Asked how governments should respond to the coming digital economy, Negroponte says their only logical response is to step aside.

Nicholas Negroponte's audacity stems from the fact he has more often been right than wrong.

When he first spoke of the convergence of computing, communications and entertainment 20 years ago, he was considered a borderline nut-case. A proposal he submitted to government in 1975 on "multimedia computing" was accepted on the condition that the first word be dropped because it sounded frivolous. Today, corporations are betting billions on the multimedia age.

The 12-year-old MIT Media Lab is proof of this. It is sponsored by 160 corporations the world over, including the likes of IBM, Sony and Warner Brothers. Negroponte is the guiding force behind the 30 faculty staff and 300 student-employees of this respected hotbed for interdisciplinary research on media innovation. He is also the lab's No. 1 salesman, jetting the world to raise funds and speaking at high-level conferences.

Yet for all its high-tech promise, none of the Media Lab's research appears to have any short-term commercial value. Sponsors also cannot specifically cite how their support has paid off. The research projects themselves are intentionally far out. Sample this: a system that reads massive amounts of news at night and delivers a personalised newspaper for you in the morning that caters to your tastes and interests for the day. Or how about a smart refrigerator that monitors its contents and orders directly when its running out of say, milk. Or perhaps a telephone that screens your calls and decides whether or not to interrupt when you are in the midst of dinner or a domestic crisis.

"IF WE STOP PRODUCING IDEAS WE'RE DEAD"

Critics say such ideas are the stuff of dreams and label Negroponte and his charges as hired nerds toying with concepts too far-fetched for companies to justify working on internally. "What my 'business' produces is a commodity that is relatively rare - ideas. If we stop producing ideas we're dead. There are not many institutions that can afford to do that. Very rich companies fund us because they can't afford to do it," he said.

Presumably, they cannot afford NOT to either. One critic surmises that in supporting the Media Lab, companies are hedging their bets against an uncertain digital future. It is the tinkering they hope will lead them down the path to new products and applications in the future. In Negroponte, the lab has a formidable persuader in ensuring the "tinkering" continues.

About three years ago, this academician naively dove into the commercial publishing world by first funding a start-up magazine, then writing a book based on his magazine columns. So why was the digital and multimedia proponent indulging in such flat, non-environmentally-friendly mediums? Why, indeed. Negroponte being Negroponte adds to the paradox: "interactive multimedia leaves very little to the imagination" whereas the "written word sparks images and evokes metaphors that get much of their meaning from the reader's imagination and experience."

Despite such obvious incongruity in the man, both Wired, the digital culture magazine, and Being Digital, the bestselling paperback, have been huge successes for Negroponte. They have made him a pile of money and bolstered his stature as an authority on the future of information-based economies.

"BITS VERSUS ATOMS"

One of Negroponte's profoundest insights that was popularised by his book and truly earned him the title of Digital Guru is his urging for industries to relook at themselves in terms of bits versus atoms. Are publishers, for example, in the information delivery business (bits) or in the manufacturing business (atoms), he asks. "The newspaper business is already a bits business until the last minute. Then it is printed on paper and physically moved around, which is a mistake."

The reason the business is such, says Negroponte - recently enlightened from his publishing excursions - is because readers still like its "wonderful interface". His solution is an invention that researchers at the Media Lab are working on. "The future of newspapers will be to make a cheap enough pulp-based medium using transparent conductivism that turns it into an electronic display. It still has the look, feel and even the smell of paper if you so desire but all you need to do is plug it in everyday and download the news," he said.

In another example, Negroponte said the only reason the concept of a public library works and is no threat to the publishing industry is because it is rooted in atoms." First of all you have to get your atoms down to the library and some of us have a few too many. Then when you get there, you take a book off a shelf and you've left an empty space. When you borrow an atom, there are no more atoms left," he said.

But when a book is turned into bits and stored in an online computer - the entire concept is turned around. "First thing is, I don't have to take my atoms anywhere. I can just access the bits more or less from anywhere. Secondly, when you borrow a bit there's always a bit left. All of a sudden 30 million people can borrow more or less at the same time those bits," he said.

In Negroponte's future, it is the value of bits, not atoms, which will profoundly affect our lives. Wholely new content will emerge from being digital, as will new players, new economic models and a cottage industry of information and entertainment providers. Negroponte says bits also have the characteristic of having no respect for geopolitical boundaries. "Already they raise legal, financial and social issues that governments are not particularly sure how to address," he said. The Internet is a case in point.

Negroponte describes how in February 1995 an Islamic cleric from Pakistan demanded the US extradite Madonna and Michael Jackson to stand trial for violating fundamentalist laws. The US dismissed the request as just plain silly. Yet, that same month the Thomases, a couple in California running a bulletin board service that was legal by local law, were "extradited" to Tennessee, another state, after a postal worker logged in and did not like what he saw. The couple were charged with violating Tennessee law, tried and found guilty.

In another incident, a University of Michigan student named Jake Baker posted a fictitious story on the Net that was read by a man in Moscow who didn't like it. Unfortunately, the reader from Russia was an alumnus from the university and conveyed his displeasure to the president of the university who had Baker arrested. Luckily for Baker, the case was thrown out after the judge deemed that the only crime committed was one of "poor taste".

"These are absurd cases because the law doesn't have a clue how to deal with it. It is also an early warning system telling us that this is 'the big one'," said Negroponte.

The advent of digital cash in a year or two, will further complicate matters. "Once those bits become money you have an extraordinarily different world. All of sudden in the balance of trade the numbers don't make sense. Where are we trading? If you don't like the banking laws in Kuala Lumpur - move your computers to the Cayman islands," he said. Negroponte foresees an age when one won't need a nation-state to validate currency. "Mom and pop companies can issue money and there will be debit cards where no one really knows where the money is."

Digital cash will also spark the emergence of new microeconomic models. Negroponte says there will be many creative ways people will come up with to conduct micro transactions - for example, paying a penny to read a particular column in a newspaper or, in a 3-D role-playing game for children, paying for armour or weaponry to fight the dragon.

On the security of such transactions, Negroponte says the digital world is far safer than the physical world. "The proof of this is the trillions of dollars that banks move around daily in networks of the world. You have not heard of a hacker that recently went off with one per cent of it. These are networks that are not broken into," he said.

The issue of security and privacy, according to Negroponte, is three-fold. "When I send you something you have to be assured it is indeed from me. Second while the message is travelling between us, you don't want anyone listening in. Once you have the message, you have to be assured that no one is going to come in and pull out a bit afterwards." All three are do-able, says Negroponte. The stumbling block is not technology; it is the US government. "The American government has embargoed high quality encryption and regards it as munition - anything over a certain length of keys is deemed as illegal export."

"THE INTERNET CAN BE SAFE AND SECURE BUT WE HAVE TO WANT TO MAKE IT SO"

Negroponte says the US government believes that if you export such technology, drug dealers and terrorists will be able to talk to each other in ways that it cannot listen in. "But the state of the world today is such that the only people who do have good encryption are the drug dealers and terrorists. We have to remove the embargo to let companies, countries and online systems use the level of encryption they want. The Internet can be safe and secure but we have to want to make it so," he said.

In creating a digital world, one of Negroponte's pet gripes is the inadequacy of present-day devices that produce, transmit and display the bits. He finds personal computers needlessly complicated. VCRs require too much effort to learn to programme, fax machines are a "step backward" and cellular phones are "over-featured". Trained as an architect, he bristles at the poor design and the un-user-friendliness of the interface of such products. "It's still much too hard to use computers and is still much too expensive," he said.

On Negroponte's wish list are machines that will see, hear and talk, even communicate with each other. "They will possess all all the qualities inherent in a well-trained, experienced English butler," he said. Negroponte's misgivings of today's "dumb" machines is negated by the recent phenomenal growth of Internet users and the ubiquity of personal computers in homes. "The Internet is an unstoppable, uncontrollable being. It doesn't follow the normal structure that human beings are used to. You grow up in the face of some form of authority - parent, teacher, boss, country. Here is something that has no law, no temple, no country - nothing of the typical hierarchical structures that we are used to - it is a totally decentralised phenomenon."

But to Negroponte, it is not all chaos either. "Laws may never have to catch up with the Internet. It might be a little more self-policing and self-regulating than we think. If you compare it to physical places that have grown fast, they were pretty lawless and awful. But the Net has done very well for itself by scaling rapidly and you discover that the mindset of the world out there is generally helpful and positive-thinking."

Negroponte acknowledges that the transition to a digital economy, one based on valuing bits over atoms, may not be smooth. He has a theory on why there are forces pulling against it. In the US, he says, the fastest growing groups getting online and using computers are divided between teenagers and those aged 55 and above. He calls the people in the middle the "digital homeless". "They are homeless because they arrived on the planet too early - they're not young enough; or too late - they're not old enough. They are missing the important ingredient that people in the two groups have a lot of - time."

"IRONICALLY, IT IS THE DIGITAL HOMELESS WHO RUN COMPANIES AND COUNTRIES AND DECIDE ON THE FUTURE OF THE DIGITAL WORLD"

Ironically, it is the digital homeless who run companies and countries and decide on the future of the digital world, he said. This is the core reason why big corporations and governments are not comfortable with the advent of the digital economy. Ever the optimist, however, Negroponte has hope yet for those wary of learning new skills. It is their children who are going to save them, he says. "I am fervent believer in the indestructibility of kids. Children across the world display the same curiousity towards PCs and are not afraid of the medium. Kids will teach the digital homeless. For if they don't, who else can?"