Bill Gates on tax, climate and Microsoft
Microsoft co-founder and Bill & Melinda Gates Foundation co-chair Bill Gates talks to FT deputy editor John Thornhill about philanthropy, tax, energy and health innovation, and Microsoft’s record. Mr Gates was in London to speak at an FT 125 event.
Studio filmed by Rod Fitzgerald and Nicola Stansfield. Produced by Veronica Kan-Dapaah. Edited by Josh de la Mare.
BILL GATES: And I got fairly serious--
JOHN THORNHILL: So we're joined today by Bill Gates, the co-founder of Microsoft, who has been listed as the richest person in the world for 16 of the past 21 years. He is co-chair of the Bill and Melinda Gates Foundation, which spends about $4 billion a year attacking poverty and disease, and promoting education around the world.
Bill is in London to talk at an FT 125 forum event on leadership and innovation. And we're going to explore some of those things today. Welcome.
BILL GATES: Thank you.
JOHN THORNHILL: F. Scott Fitzgerald said that there are no second acts in American lives. You seem to be disproving him. What drove you to your second act? Why are you focusing so intensely on philanthropy?
BILL GATES: 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 software, innovation and software. And it not only gave me a lot of resources, it also gave me an understanding of inequity in the world and the importance of innovation. And so now, partnered with my wife Melinda, my second job, it'll be the full time job for the rest of my life, is taking those resources and trying to help out those in most need.
JOHN THORNHILL: And both of you believe very strongly in giving back. I mean, at a time when there's a global debate about inequality, whether there should be a global wealth tax, do you think that that is the way to go? Or do you think if rich people give back in the way that you do, that is a better way of promoting growth and attacking poverty and disease?
BILL GATES: Well 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. Philanthropy is only, even in the United States where it's the largest, about 2% of the economy.
And yet philanthropy, when it comes to novel approaches, trying out new types of schools, funding some new health R&D, it has been willing to be diverse, to be risk oriented. And then in the best case, if it does something like Green Revolution, where new seeds get invented, then government money comes along, really scales that stuff up. And so I love philanthropy, but I wouldn't say that it's the solution to whatever your views are on wealth distribution.
JOHN THORNHILL: Now I read a quote attributed to you, in which you said, success is a lousy teacher. It seduces smart people into thinking that they cannot lose. I'm very intrigued, because your career is not associated with failure. What have you felt failed at, and what have you learned from that?
BILL GATES: Well, Microsoft certainly has a lot of things that did extremely well. I haven't been CEO since the year 2000. And the company's got immense strengths. But in areas like search or phones, you've got Google, Apple, who've done very, 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. And really understanding what it was that we might be missing required very good management because we were so successful. And so yes, you can get confused about what the key elements are and what you need to sustain it. That type of thing.
You've got to seek out criticism, seek out the customers that you're not meeting their needs. It's kind of, complacency is typical.
JOHN THORNHILL: And do you think that success at Microsoft blinded you to the unbelievable disruptive power of the internet, in particular?
BILL GATES: Well the internet, no. I wrote a memo before the internet was significant at all, saying that we were betting the company on the internet. And that I hope nothing else was coming along, because we were so maniacally focused on the internet. Internet explodes about 1995.
And of course, Microsoft, from '95 to 2000, we double our profits. We double our profits again to 2005. The only way you can think of Microsoft as not successful is to say, did we lead in every market in the digital environment? And no company has done that.
But now we have a little bit of a re-energization under a new CEO, who's looking at the mobile, the cloud, and saying hey, the company has to really adopt and lead in this environment. And it's exciting to see that take place.
JOHN THORNHILL: Now you've described yourself as an impatient optimist. And in the world today, there are a lot of problems. There's turmoil in the Middle East. There's the growth of poverty inequality.
And there is the threat, possibly, artificial intelligence, which people like Elon Musk think are more dangerous than nukes, potentially. And there, is of course, climate change. Which of those do you think is the greatest challenge to mankind, and what can we do about it?
BILL GATES: Well, the fundamental situation is that life is improving dramatically. Now there's a tendency, partly because of the way news works, 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'll help us do better. Climate change is a big problem, but it's one that, if you do the right types of R&D, you can actually avoid the ill effects. Development, where you get buffer stocks of food, you get air conditioning, the middle income countries really aren't going to suffer that much. It's the low income countries.
So, 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.
JOHN THORNHILL: And a lot of these areas that you're talking about, we need to have cooperation between the public and the private sector to promote innovation. How does that happen?
BILL GATES: Well, in some areas like digital technologies, although the public sector was there at the start, the chip industry, the internet, 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's often the payer. They have to have the long term point of view, so some of the basic R&D that there is no financial return for, that that was going on.
Likewise in energy. There's 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.
So yes, this boundary of the biggest part of the economy, the private sector, with the second biggest, the government sector, and then the small piece philanthropic area, the way they interact with each other and play to their strengths and help each other out, plenty of room for innovation on those boundaries.
JOHN THORNHILL: Great. Thank you very much.