Microsoft founder Bill Gates: How to fix the world’s biggest problems

There are none that top Bill Gates when it comes to money. He is valued at $79 billion, according to Forbes, two billion more than his closest rival, Mexican telecoms expert Carlos Slim Helu. His 40 year Microsoft journey has seen dot com crashes, recessions and the Internet, an invention he says he bet the company on. Having given up the role of CEO in 2000, Bill and his wife Melinda set up the Gates foundation in the same year, the world’s largest private foundation. Biggest, largest – words that resonate with Gates. In this interview with the Financial Times’s Deputy Editor John Thornhill, Gates talks about success as a lousy teacher, charity and that bet he made on the Internet. – Stuart Lowman

The Financial Times of London’s deputy editor John Thornhill interviewed Microsoft co-founder Bill Gates at the FT-125 forum event on leadership and innovation. He kicked off by quoting American novelist Scott Fitzgerald who said that there are “no second acts” in American lives. You seem to be disproving him……

Well, I was very lucky in my first act, to be there at the beginning of the personal computer revolution and play a role in the importance of innovation and software. Not only did it give me a lot of resources, but it gave me an understanding of inequity in the world and the importance of innovation too. Now, I partnered with my wife, Melinda. My second job (and it will be a full-time job for the rest of my life) is taking those resources and trying to help out those most in need.

There’s a global debate about inequality and whether there should be a global wealth tax. Do you think that is the way to go?

Certainly, tax systems are the primary thing that asks those who are the most successful to fund the basics that we’d like to have for everybody. Even in the United States where it’s the largest, philanthropy is only about two percent to the economy. Yet, when it comes to novel approaches such as trying out new types of schools, funding, and new health R&D, philanthropy has been willing to be diverse and to be risk-oriented. In the best case, if it does something like Green Revolution where new seeds are invented, then Government money comes along and really, scales that stuff up. I love philanthropy, but I wouldn’t say that it’s the solution to whatever your views are on wealth distribution.

You said, “Success is a lousy teacher. It seduces smart people into thinking that they cannot lose.” What have you failed at and what have you learned from that?

Microsoft certainly has a lot of things that did extremely well. I haven’t been CEO since the year 2000, and the company has immense strengths, but in areas like search or phones, you have Google and Apple who’ve done very well so we were always in a very dynamic environment. The fact that we got in and really, created this Windows environment, which drove personal computing to a new level; that meant that we were the centre of attention. Really, understanding what it was that we might be missing, required very good management because we were so successful. Yes, you can become confused about what the key elements are, what you need to sustain it, and you have to seek out criticism. Seek out the customers whose needs you’re not meeting. Complacency is typical.

Do you think success at Microsoft blinded you to the disruptive power of the Internet?

Well, no. Not the Internet. I wrote a memo before the Internet was significant at all, saying that we were betting the company on the Internet and that I hoped nothing else was coming along because we were so maniacally focused on the Internet. The Internet exploded in about 1995 and of course, from 1995 to 2000, we at Microsoft doubled our profits. We doubled our profits again, to 2005. The only way you can think of Microsoft as unsuccessful is to say, “Did we lead in every market in the digital environment?” No company has done that. Now we have the little bit of re-energisation under a new CEO who is looking at the Mobile and the Cloud, saying ‘the company has to really, adopt and lead in this environment’ and it’s exciting to see that take place.

In the world today, there are many problems. Which of those do you think is the greatest challenge to mankind and what can we do about it?

Well, the fundamental situation is that life is improving dramatically. Now there’s a tendency – partly because of the way news work or human mentality works – to say, ‘oh, it’s not peaceful everywhere’. Absolutely. These are awful things. We need to get these things solved but it isn’t a framework where people should be negative. They should think of the good things that have happened, and say, “How do we build on that?” I often look to innovation as the thing that will help us do better. Our climate change is a big problem but it’s one which, if you do the right types of R&D, you can actually avoid the ill effects. Development where you get buffer stocks of food and air conditioning… The middle-income countries really, aren’t going to suffer that much. It’s the low-income countries. As we reduce the emissions, knowing that there’ll be some heating, we have to improve farming productivity. We have to help out these poor countries because that’s where most of the suffering will take place.

In a lot of these areas you’re talking about, we need to have cooperation between the public and the private sector to promote innovation? How does that happen?

Well, in some areas like digital technologies; although the public sector was there are the start (the chip industry and the Internet, for example), a lot of defence spending and general R&D helped drive that forward. Now the private market is really, moving forward at full speed. In health, it’s a bit more complicated because the Government is often the Payer. They have to have the long-term point of view – some of the basic R&D – that there is not financial return for it and that that is going on. Likewise, in energy, there is upstage research that will enable the CO2-free lower cost energy generation that Government R&D budget should be increased in order to accelerate innovation in that space. Yes, this boundary of the biggest part of the economy (the private sector) with the second biggest (the Government sector) and then the small philanthropic area. The way they interact with each other, play to their strengths, and help each other out, there’s plenty of room for innovation on those boundaries.