Bill Gates and Creative Capitalism

Back in January Bill Gates spoke about what he called "Creative Capitalism" at the World Economic Forum in Davos, Switzerland. This week he has written an article for Time magazine entitled "How to Fix Capitalism". It's interesting that Bill, once the richest man in the world, thinks that capitalism is broken. As he puts it:

The world is getting a lot better. The problem is, it's not getting better fast enough, and it's not getting better for everyone. One billion people live on less than a dollar a day. They don't have enough nutritious food, clean water or electricity. The amazing innovations that have made many lives so much better — like vaccines and microchips — have largely passed them by.

Bill doesn't advocate a different political system though:

Creative capitalism…. isn't a knock on capitalism itself. It is a way to answer a vital question: How can we most effectively spread the benefits of capitalism and the huge improvements in quality of life it can provide to people who have been left out?

He says that human nature is based on two apparently conflicting forces, self interest and caring for others:

Capitalism harnesses self-interest in a helpful and sustainable way but only on behalf of those who can pay. Government aid and philanthropy channel our caring for those who can't pay. And the world will make lasting progress on the big inequities that remain — problems like AIDS, poverty and education — only if governments and nonprofits do their part by giving more aid and more effective aid. But the improvements will happen faster and last longer if we can channel market forces, including innovation that's tailored to the needs of the poorest, to complement what governments and nonprofits do. We need a system that draws in innovators and businesses in a far better way than we do today.

For Bill the solution relies not on corporate philanthropy, but on persuading businesses to start researching what they can sell to the world's poor:

It's about giving them a real incentive to apply their expertise in new ways, making it possible to earn a return while serving the people who have been left out. This can happen in two ways: companies can find these opportunities on their own, or governments and nonprofits can help create such opportunities where they presently don't exist.

There are markets all over the world that businesses have missed. One study found that the poorest two-thirds of the world's population has some $5 trillion in purchasing power.

Bill goes on to give examples of creative capitalism at work and suggests ways government and business can work together. Ultimately though, Bill Gates thinks that time is running out:

We can't wait. As a businessman, I've seen that companies can tap new markets right now, even if conditions aren't ideal. And as a philanthropist, I've found that our caring for others compels us to help people right now. The longer we wait, the more people suffer needlessly.

If you don't mind putting up with the preceding advertisement, here's a video of Bill Gates being interviewed by Time editor Richard Stengel: