Bill Gates: College Tour 2008 – Stanford University

BILL GATES: Thank you. (Applause.)

Well, it’s great to be back here at Stanford. You may know that Microsoft’s CEO went to Stanford, but I induced him to drop out. So, he never got a degree from Stanford. He did get an undergraduate degree, but I still think of him as a fellow dropout. (Laughter.)

We have lots of great people who’ve come from Stanford: Rick Rashid, who runs our research; Chris Jones, tons of great people, so we owe a lot to the school.

And the collaboration that’s going on today, whether it’s between Microsoft and Stanford in areas of software advances or between my foundation and Stanford on global health things, really are fantastic.

I spent the afternoon meeting with faculty, talking about the progress on those things, and sharing our ideas about where we go from here. Really it’s exciting because my optimism about technology is deeply underscored when I meet these brilliant researchers, and see that they are going to get the resources, and take on these ambitious goals.

John mentioned that the middle of this year is a change for me, that I’ll switch to being full time at the foundation, and part time at Microsoft, and that could be traumatic for me. I was 17 years old when I started working full time on Microsoft work, and I’ve done it basically every day of work since then. So, who knows what it will be like to make the change? I’m looking forward to it, and some friends said that they’d like to volunteer to help make a little video so that I’d understand what my last day will be like, and how things will change. So, let’s take a look at the video they helped make.

(Video segment.)

(Applause.)

BILL GATES: Well, we certainly had a lot of fun making that, but the transition is going very well. You saw Ray Ozzie and Craig Mundie in the video, who are taking over a lot of the things I’ve been doing. And I’ll still be very involved in some things I’ve had a lot of passion about, including natural user interface, some things about how we structure knowledge, and really take on the big frontiers in software.



February 18, 2008
Microsoft Chairman Bill Gates announces Microsoft DreamSpark student program to students and faculty at Stanford University in Palo Alto, Calif., Feb. 19, 2008.

Let me talk now about what I think software will do in the decades ahead. Certainly if you go back to the start of Microsoft, nobody thought of software as being important at all. There was no software industry. The little software that there was, was simply bundled along with the mainframe for the very expensive computers. And computing itself was almost thought of as a threatening scary thing, where governments and large companies would use it to track information about you and to print bills that were never right. People talked about stapling the punch cards that came with your bill, if you’ve ever heard of a punch card, and messing up these evil computers.

And so it’s a real mind shift change to say that computing was going to be about individuals, that it was going to be about empowerment, and that even more important than the hardware would be the software that was available, and that a gigantic industry would group up around that.

Now, that dream required some heroic assumptions. We had to believe that the cost of the hardware would come down. We had to believe that the volume would go up. And only then would the economics of being able to spend tens of millions of dollars to write a software package, and yet being able to sell it for say $100 or less, actually make sense.

And so we undertook the idea of reaching out to other people, getting them to start software companies, and making sure that the personal computer became that high volume platform. In fact, today the software industry is gigantic, and the range of solutions and creativity in that industry is absolutely phenomenal.

That’s really changed the way we think about computing. Today, we think about computing as affecting almost everything. Ten years ago, I talked about the start of the first digital decade. That’s about the time where the Internet was just showing up, and nobody was doing their photography in digital form or banking online or organizing their trips or looking at stock results. Well, today, 10 years later, many of those activities, certainly in the rich countries, we almost take for granted. The idea of a printed phone book or a CD or a record almost seems antiquated.

My daughter doesn’t know what a record is. I keep meaning to go find one and show her, but they’re hard to find nowadays. Soon enough things like the phone book or a print-based encyclopedia will be equally antiquated.

So, we’re now at the start of what we call the second digital decade, and I think the changes, the impact of this second digital decade will be far more dramatic than the first; in fact, as dramatic as all the things that software has done in this entire 30-year period since the personal computer came along.



February 18, 2008
Microsoft Chairman Bill Gates with the 2008 Imagine Cup Innovation Accelerator students at Stanford University in Palo Alto, Calif., Feb. 19, 2008.

Part of that is because of the foundation we have. We have over a billion personal computers out there, and several billion people who’ve had a chance to use those. We have several billion people who use cell phones. We have somewhat less, about 300 million people connected up to the broadband Internet, but that’s a number that keeps growing quite dramatically.

We reached an interesting milestone just recently where China now has more broadband users than the United States. You can be sure that the United States won’t catch up, because China has a lot of people who are going to be connecting up. In fact, of all the IT related markets, the personal computer itself and software are the only ones where the U.S. market is still much bigger than the market in China. So, it’s a very, very global business in terms of where the talent is, where the innovation is, where the markets are, and different ways of using these tools to have an impact.

I think it’s fantastic that the Internet has made the world a smaller place. The growth of the personal computer from a device that you create documents and you edit them to one where you can do a little bit of e-mail to one where you could get a little bit of content to now where almost everything should be digital by default, that is a big mind shift change.

For any industry it has huge implications. Even for education, which we think of as being about the same for the last several hundred years, if somebody said to you, the best math teacher lived in 1890, you could say, well, maybe that’s true. You couldn’t say that about the best person who understands physics because there’s been an accretion of knowledge, and people are building on each others’ understanding.

In some areas the ability to watch people who practice very well, to see their results that are numerically analyzed, to understand what those techniques are, it’s been difficult to create that learning cycle. And now that we have things digitally, that we can store videos digitally, that we can look at test scores and correlate things, and other teachers can see what those teachers are doing and try out those best practices and find out how well they’re working, then even in that area we get a fairly substantial change.

Education will probably split into different things. For example, how many universities should have to give lectures on subjects like physics? Well, the answer is very few, because whoever does that well can put it out on the Internet, make it available for free — and there’s certainly a trend towards doing this — and everybody the world over, assuming it’s localized into different languages, which again using labor across the Internet again should be a very straightforward thing that even volunteer labor in most places would be able to achieve, then you have the best teachers of all the college curriculum available on a worldwide basis.

I personally go up and watch courses about physics or chemistry or anything that I want to know about — I have to admit they’re mostly MIT courses at this point, but I look forward to seeing more Stanford courses up there — and I feel so privileged to be able to do that.

Not a week goes by that my children aren’t asking me some question that I go up to the Internet and say, okay, what is it about stars or different animals that I can take a story back and actually be a dad who knows the answers to these questions, and encourages their curiosity. None of that would have been possible before.

The ambition level we can have for different realms of activity should be much higher, and it’s because of what software can achieve. If we think of somebody who works in an office, today they are really information starved: their ability to navigate, to understand customer trends and quality and costs and opinion, even to survey information and look at how that’s changing over time, look at key indicators that make sense to them, to collaborate with people at a distance. You can just talk to these what we call information workers about how valuable their time in meetings is spent, how hard they find it to get data, and you understand they are not yet fully empowered.

The way that even just communications works, where they think about phone numbers and busy signals, and shall I send e-mail or instant messaging, the way that when you’re at a distance you can’t really meet and collaborate in a rich way, it is very, very antiquated. It’s way better than it was say 10 or 20 years ago, but it’s nowhere near to what it can be.

When you start to take products like cars and planes or any physical product, do the design digitally, share those plans around, let people try out simulation models, what might happen with that product over a period of time, you’re shortening design cycles.

So, you take the fact that there are more educated people on a global basis, that they’re connected, and that the power of software will give them better tools, not just to work together but also to model and understand the nature of the product work they’re doing, then innovation will accelerate, and it will accelerate on this foundation of the advances in computing and software.

Why can we be so sure about this? I mean, after all, when Gordon Moore first predicted that the number of transistors would double every two years or so, it was just a prediction.

Well, we can see that that prediction in transistors will remain true for the next 10 years. We can see that the storage capacity will also grow at exponential rates, that optic fiber bandwidth will go up at exponential rates.

If we look for bottlenecks in this, we only see them in a few places. We see a bottleneck in terms of clock speed of the microprocessor. So, finally we have to deal with programming computers to work in a parallel fashion. It’s one of those great problems that when I was in computer science we thought, hey, maybe we’re about to solve this. Well, now we really have to solve it. The brute force of clock speed scaling is not likely to come and bail us out the way that it has in the past.

There are some issues of modularity and proving programs correct both for just reliability and security things that are also now very required as we’re taking all of society and connecting it up digitally, with financial records and product orders and private medical data, all of these things being stored digitally.

So, the basic foundation of how we understand the way that software works to say does this software maintain privacy, does this software control this information properly, there are some fundamental advances in computer science that we need to drive.

Most of the things we want — cheap screens that for US$30 or $40 you can take every wall in your room and project up something at very high resolution; cameras that when combined with software can recognize the kind of gestures that you make, and who’s in the room doing what — these things will be very inexpensive.

And, in fact, we’re on the verge of a big change of how you interact with all these devices. It’s been the mouse and keyboard overwhelmingly. It was just the keyboard, but then the mouse became mainstream, actually invented not far from here in the ’60s by Douglas Engelbart, but then with graphics interface that came and it was standard. That is the way we interact: You sit down at a chair, it’s really just one person.

You’re starting to see the beginnings of a change to a broad range of interaction techniques I call natural user interface. You see it in the 3D controller that the Wii has.

You see it in the touch that the iPhone has.

You see it in products like Microsoft Surface where we have cameras that can look at any gesture, any object that’s appearing, and seeing what you’re doing.

You see it in RoundTable that sees who’s in the room and decides who’s speaking by taking these multiple camera feeds.

You see it in products like the TellMe software that runs in mobile phones where instead of trying to use that keyboard, you simply say what you’re interested in, whether it’s a directory lookup or a software interaction, and it recognizes that speech.

We now have the power to perform natural user interface.

A form factor that I’m a big believer in, that I’m excited to make sure we keep investing in, to drive it so it’s attractive to the mainstream, is the tablet device. This is where you can read off the screen, that it’s light, cheap, long battery life; eventually a replacement for paper-based textbooks.

My daughter goes to a school where they use that Tablet PC, and they use the pen, and they’re very adept at it, and it’s amazing to see how they kind of learn in a different way, because they have that tool.

There’s still a lot of work to be done to get that down to the say several hundred dollars and the lightness and battery life that we need, but that is absolutely coming. It’s a fundamental tool that will change the consumption of learning material, and even in the office place will be the device that you have as you go off to meetings.

We now talk not just about computers on the desk but computers in the desk, because we can recognize what you’re putting there, and let you touch and expand things. Your desk will just be a horizontal surface display, your whiteboard will just be a vertical surface display. So, the ability there to take business information or project schedules and touch and manipulate and see those things, and then have a portion of it that’s a videoconference with another person where you’re working together and interacting, that will just be commonplace. When that’s cheap, people will go to that, and we need a whole new generation of software that can interact and use those things.

In the consumer space experiences like TV, which are very passive today, very channel oriented, will change to be very personalized and very interactive. The dichotomy of broadcast video that you have say through your cable or satellite provider, and the video on the Internet, those will be brought together, so that if I have a child who’s in a sports even and somebody with an HD camera just happens to go and film that, when I go back to my TV menu, based on my interests, that will show up as one of the top big choices that I might be interested in. There’s nothing that will divide those two worlds. The advertising will be targeted, the shows will be interactive. Something like watching the Olympics and picking which sports you’re interested in, or the election and seeing the background and the breakdown of what’s going on with different votes; we are so used to a very limited TV experience, that this revolution that is literally on the verge of happening, people don’t really appreciate how dramatic that’s going to be.

Today, there’s a few million people that are getting their popular mainstream video through pure Internet feeds that can be individualized, and so that infrastructure is starting to get out there. As we get it to the tens of millions and hundreds of millions, then all the content programmers will realize that the dividing line between what’s kind of a set-top box in this environment and what’s been a videogame, there is no dividing line; it’s just a spectrum of content.

So, many of the things that will be available on TV in terms of watching together and chatting with your friends who are at a distance, or trying different things out, some of those you see more in the videogame world today than in the TV world, but we think they’ll be very broadly adopted.

Things like organizing the memories of your children as they grow up, and having the images and the homework and the exchanges with them, and being able to go back and view that in rich and fun ways, that can happen very automatically.

Today, we’re still very device-centric, and we rely on the user to move information between their phones, and their phones and their PCs, and their PCs and their PCs. Well, as we get this sort of unlimited power in the cloud, both in terms of computation and storage, the ability to move that data automatically so that if you buy a new phone your information just shows up, if you borrow a PC your data is there but only available to you, that will become commonplace.

So, the willingness to work with multiple form factors, even in the car where it’s more voice oriented, or in the living room where it’s more distance, 10-foot oriented with gestures and a simple remote control, or using your phone to control things, those experiences will not be bifurcated like they are today.

Now, we also need to revolutionize how we write software, where we can define things at a much higher level. That really hasn’t changed much in these last 30 years. We’re still writing declarative code that can take something like two banks whose products are 90 percent identical, and you can end up literally with a million lines of code that are different between these two banks. And yet if you describe say in English their products, you’d only find like 40 pages of difference.

And so you say, what is that explosion of complexity that is expensive, it’s fragile, it’s hard to prove it’s correct? Well, it’s a failure of abstraction. We have not changed that level of abstraction. And finally we have the computing power and some of these ideas that can create runtime environments that particularly in domains that you focus on like the business domain that so much software is written to, we can make some huge breakthroughs.

This is part of the reason why one of the best investments I think any company makes is in its research group and in the way that research group connects up with universities. It’s something that Microsoft looked forward to doing, and about 15 years ago we were successful enough we were able to start down the research path. People like Nathan Myhrvold, Rick Rashid came in and built something really phenomenal that not just in terms of the research it does but in terms of the way it lets us understand the brilliant ideas at places like Stanford, it has made a huge difference for us.

Every one of our products is dramatically better because of that work. New things we do like ink recognition in tablet or all this visual recognition stuff that is just coming to the mainstream was totally developed there, our machine translation stuff. The breakthrough work that gives us the belief that we can take what search is today and so something that’s dramatically better than that, that optimism comes because we have great people in our research group who are doing very advanced things.

We spend a bit over $6 billion a year on R&D, but it’s really this long term piece that ranges from graphics techniques to quantum computing to natural user interface that really define what the future is going to be.

We’ve now spread that activity across the globe. When people come to me and say, hey, would you put a research center in a certain place, I used to say, well, if you have a billion people, we’ll put a research center there, because we have one in China, one in India, one in the United States — now we have three in the United States, so obviously I’m breaking my criteria that you have to have a billion people. So, it will be a little harder to exactly say the criteria, but it really has to do with where the top universities are.

That research activity is risk-oriented, and it’s actually fairly surprising to me how little research is funded by businesses. Even here in the United States, if you take what Bell Labs and Xerox PARC did, which are some of the foundational work that Microsoft benefited from immensely, the entire personal computer industry had a huge boost by that work. And unfortunately those companies didn’t get an economic advantage; the way they managed the research and thought about it actually set an example that may have set back the willingness of companies to make these investments. I think now you see a range of companies like GE coming around and saying that this is an important thing, but that’s a huge challenge. Those are the kinds of jobs and breakthroughs that really are going to change the world.

Now, when we think about the sciences broadly, the role of software is becoming more important. In the past you could say, well, what was the language of science? You could say mathematics, and it was very important for physicists, chemists, biologists to have some understanding of particular parts of mathematics to express their ideas, to write down formulas, and to make predictions.

Today, the amount of data in most of these sciences is large enough that we can say that computer software and databases and pattern matching that come out of software breakthroughs are really important for what is going on in the sciences, particularly in biology, but I’d say almost as strongly for astronomy where the amount of data and taking a theory about the density of things, the creation of things, it’s not just one telescope, it’s not just being there at midnight and seeing something cool and writing it up and getting the Nobel Prize; rather it’s deep analysis across massive amounts of data.

So, we are sort of the handmaiden of those advances, and making sure that we’re reaching out and collaborating with the sciences, and understanding from them how do they want to process that genomic data, how do they want to take and get insights into it, that’s very important.

We’re doing our best to reach out to scientists, so getting ourselves out of just pure computer science, which is very important, lots of tough problems there, but to play a role in this more interdisciplinary activity that’s happening in a very deep way in the top universities. In fact, in my discussions with faculty this afternoon I was really pleased to see how Stanford is really trying to push the limits of getting departments to work together, and particularly bringing in computer science.

One area of complexity that I’m sure fascinates all of us is studying the brain. There’s a lot of great research going on in that. One of the people we’re working with and providing software to is [Jeff] Lichtman at Harvard. So, I wanted to take just a quick look at a short video about how what he’s doing, and then show how software fits into that.

(Video segment.)

BILL GATES: Yeah, I’ve got the HD View running right here, so you can get a little sense of it.

Processing lots of image data now it turns out with the right algorithms we can do this very well to let you scan in and out, and even apply a lot of recognition algorithms to understand. Here what we really want is a database of all the neuron connections inside the brain, and eventually understanding exactly what’s being connected.

So, if we look here, this is the layer diagram, and I can go in and look at individual layers at any time, try and understand exactly what’s changing as we go through that. A lot of data, but processed very quickly. Then here’s where we take an algorithm that’s trying to understand exactly what the patterns are, and then map that, as was being said, into those structures.

Now, obviously this is just the beginning of this type of capability to really get the model and understand what the meaning of the messages are all the way up to the highest level, that’s going to take a lot of time, but that’s a very software driven activity.

One thing that’s amazing is in the computer industry and sciences broadly is how much students have really been at the heat of a lot of breakthroughs. John mentioned a lot of the great companies that Stanford alum or dropouts have started, and there are other examples as well. So, it’s very interesting that at a young age people are very open-minded about new approaches.

We announced a new program today to actually let students have all the same tool software, things like Visual Studio or Expression, the same software for free that professional developers use, really trying to broaden that out, both to not only the computer science department where we’ve already had grant programs, but to the other departments and even down to a younger age level, so that this access to the very best tools is there from the beginning. Some of these people will go on and start companies, some will just be a lot better in whatever activities they engage in.

This level of interest is very high. We have a contest every year we call the Imagine Cup. Last year, it was about 100,000 students. This year it will be about 150,000 students. The United States is the third biggest country, where Brazil and India have a higher enrollment, but the U.S. at 15,000 is very significant. And the quality of these entrants are really unbelievable. In fact, we had a thing where people won a programming contest, we would just basically give them a job and some of the people who have come out of that have been really phenomenal in terms of what can go on.

And what we’re seeing is we’re really getting to the point where your level of education is what defines your opportunity. It’s less about where you grew up and simply having access to these tools, if you’re lucky enough to get access, then really the sky is the limit in terms of what can be done.

So, this brings us to my final topic, which is the question of as we have all these advances, how are benefits of those advances spread in terms of the richest 2 billion on the planet, say the middle 2 billion, and the bottom 2 billion?

In fact, our record to date is that although there’s benefits in terms of improved medicine and food and electricity to a high percentage of people, that the relative benefit has been overwhelmingly to essentially the people who need it the least, where the marginal benefit is lower than it is say in the poorest 2 billion, where literally for not spending a few hundred dollars a child’s life is lost.

Of the 12 million children that die every year, less than 1 percent of them are in the rich countries, and yet if you look at medical research that’s related to those things, over 90 percent would relate to the conditions that are in the richest countries.

So, you have this big disparity. Consider how much money should be spent on baldness versus on malaria. Well, the ratio is about 50 to 1 for baldness. Malaria, of course, kills over a million a year.

I was pretty stunned when I found out about these statistics, and I have to say it was after I dropped out of Harvard, actually quite a bit, over 10 years, I read about a disease called rotavirus that was killing a half a million children a year, and I thought, what the heck is rotavirus; I’d absolutely never heard of it, this must be — this article must be wrong. You can’t have a disease that’s killing a half a million children and not have had courses. I flipped through the course catalogue; I never saw anything, any of this stuff. In fact, the one medicine there was for that disease, the one vaccine was taken off the market because of things that really it shouldn’t have been taken off the market for, for the key target market, which was the poor countries.

So, we have this disparity that as great as our system is, if there’s not a market need, it doesn’t drive the innovation to the particular requirements of the poorest.

And yet I think that’s a very solvable thing, and, in fact, I think there’s an increasing awareness, a desire of people working at companies, of companies, and of universities to have an impact that’s measured slightly in an additional way besides what the pure market incentives are.

Our research group in India has a special group with a lot of social scientists in it that goes out to the poorest and is looking and talking to them, and very quickly you realize for that segment there’s no electricity, there’s widespread illiteracy; you’re not going to give them a personal computer. I don’t care if it’s a 10 cent personal computer; the problem is very different than that.

So, some of the solutions they’ve come up with in terms of using cell phones or even just using DVDs have been amazing. They take these agriculture extension workers who go out and help farmers, tell them what to do, and they come with a TV set and a DVD, and the very best farmers have been filmed doing these things. Think of it as like American Idol, except this is “Farmer Idol” and they really want to be the ones to choose on the video. That technique has done more for improving the productivity of those farmers, it’s three times as effective as just sending that person out, and yet they don’t need to be nearly as trained. So, some technologies like a DVD player carried out to a village, when used in the right structure, can have a very dramatic impact.

So, at every tier — the bottom 2 billion, the middle 2 billion — we have to think through what technology can work. For vaccines, you have to keep them cold as they get out to these rural villages; that’s a very tough thing.

One of the things I’ll be spending time on is reaching out to both universities and companies, and encouraging them to get more involved in this: food companies on micro nutrients and the ideas they have about buying food and helping the small holder farmers who represent the majority of the abject poor in the world; the pharma companies in terms of doing more on these things.

I absolutely think universities have a big role to play here. One element of it is that I don’t think students should graduate without having some sense, ideally both learning about it and having some direct experience of it, of the average human condition in the world, as opposed to the condition that we experience normally by living here in one of the very richest countries in the world.

So, I think we can apply ourselves to this. I don’t think it requires a revolution, but it does require a focus, it requires some value system that gets expressed, and some measurement, both in terms of who’s doing it well and who’s not doing it well, that’s really going to drive more rapid change.

So, overall I hope you get a sense of my optimism about how technology broadly and software in particular will become an enabling element in the years ahead. I think it’s a wonderful time to be a student and to have gathered these skills, and so I’ll be very excited to see the great work that you can do.

Thank you. (Applause.)

MODERATOR: Great job, thanks.

Well, now we’re going to open the floor up for some questions, and let’s see where we’re going to start here. We’ll start back here. There are some people with roving mics. So, just raise your hand, and they’ll find you.

QUESTION: Certainly as you spanned your topics today, the topic came up of how important it is, how students are at the core, you say, of a lot of breakthroughs, and I think that’s probably also true in your reference to improve the quality in the world.

So, my question is, certainly to support the objectives of the Gates Foundation and other similar efforts to really improve the quality of life in the world, you’re going to need a huge global workforce to accomplish that. To what extent is the Gates Foundation — what kind of efforts are you undertaking to enable the likes of people that are sitting in this audience around here, both the students as well as the experienced professionals, in participating in the kind of activities the foundation is engaging in to improve the world?

BILL GATES: Well, the talent shortage that exists in the poor countries is really quite unbelievable. If you’re born in Mozambique, you will live your entire life, the majority of people, without ever seeing a doctor once in your entire life. So, when people talk about interventions that require doctors, it’s like a fantasy for most of the people involved here. A lot of people will never see anything that’s electrical, they will never be connected.

The total number of people who are trained in the rich world who actually go and spend substantial periods of time in the developing world is very, very tiny. In fact, it’s so exemplary that amazing people like Paul Farmer, who actually go and do it, are celebrated examples, but the total amount of it is really quite tiny.

Now, can we change that? When our India lab opened up this research group about the poorest, the very poorest, who won’t directly touch a personal computer, they were overwhelmed with people who were interested in joining it, and now they’re spinning off NGOs like for this farmer training thing, or helping teachers learn how to do things better.

So, I see some sign of interest in it, but of the people who are trained, you know, you’d think if you’re trained in software, you’d know at least a little bit about software helping the poor; if you’re trained in medicine, you’d know about medicine helping the poor, but the majority of people who go to these top institutions don’t really even get the basic framework. If they get the basic framework, then I think they do care. I have no doubt that the human caring is there. How can we use these new tools, how can we use the fact that some people want to raise the awareness and try and drive that more broadly? Because if you’ve been there and been involved, you won’t get uninvolved the rest of your entire life.

MODERATOR: Bill, don’t you think we need a new mindset for thinking about how people design products? If you design a product for the developed world, you can’t sell it because it costs a hundred times too much what people there can afford.

BILL GATES: Yeah, sometimes trickle down works. Radios are really cheap now; they’re used very well. There are some medicines whose patents have expired that can be made very inexpensively. But you’re absolutely right, there are some things like anything where you have to go and visit a doctor on a regular basis, that’s just too hard. For example, take tuberculosis; you have to take the medicine for six months straight every day. Almost unfortunately, after about three months you start to feel that you’re cured. So, you’ll stop taking the medicine, and not only do you get a recurrence, you actually get this drug-resistant tuberculosis that may in most poor world settings be essentially uncurable.

So, if we could have a depot of drugs that daily would be released and have no bad side effects and various things, that would substitute for doctors. The rich world doesn’t need to invent that. The rich world, the fact that vaccines have to be in refrigerator, that’s fine for the rich world, but it can’t work in the world of the poor.

Even these milking machines, the way they break down and you don’t have a repairman around, that’s fatal, whereas in the U.S. you just call up the repairman and he comes along.

So, it does require a mindset of somebody who’s been out there and saying, okay, here are the constraints, and then the unbelievable toolkit of innovation we have and bringing those together.

MODERATOR: How about over here?

QUESTION: I thank you for partly funding our graduate education over here at Gates Scholars. But I see one of your end goals is to alleviate poverty and promote justice. That’s an end goal, but some of the means I guess is the utilization of guest worker business, exported workers, imported workers that are competing with domestic workers like CS majors, and people tend to work for less wages, and there have been some violations, wage violations, not necessarily in your sector but in other sectors.

So, I was wondering, how do you balance the need to alleviate poverty as an end goal, but the means to get there, there are some advocates that are against those practices, as it can’t be representative democracy, like guest workers that come here that can’t vote for laws, and their protections aren’t enforced often. There are some agricultural sectors, but in the technology sector as well, where there’s no real pressure to enforce the laws that are there, because they can’t vote, they’re not citizens, and they’re expected to go home.

BILL GATES: Well, certainly there are immense human rights violations that take place against people who are illegally in a country. I think it’s a really horrific situation to have the idea that, yes, there isn’t a clear recognition and a clear solution that you just sort of let it go on.

In terms of what is the greatest income source for poor countries today, think what is it, is it trade, is it aid? No, it’s repatriated wages from people who go to countries like the Middle East or the United States. So, those repatriations are — if you look at why literacy has gone up as much as it has in these poor countries, why nutrition has gone up as much as it has, that basic fact of repatriated income is a huge part of that.

So, when people talk about, well, let’s not let doctors in Africa go work in the United Kingdom or the United States, I don’t think that’s the answer. There are people saying, no, force them to stay there.

The real answer is that we should just improve the capacity of teaching those doctors. When you look at the best lectures being on the Internet, available for free, and the course materials and those things, our ability, if we’re smart about it, to take and improve the capacity of creating those trained people, it should not be a problem at all.

So, I’m not someone who says let’s lock down the borders as the answer to this. I think you should recognize who’s in your country, give them certain rights, but then most fundamentally keep the trade, including and labor that has worked so well, but increase the supply by using new approaches.

MODERATOR: Well, Bill, when you made a decision to put a research lab, a Microsoft research lab in China or India, what was your motivation? Was it purely that there were a billion people there, or were there other skills you were trying to get at, or were you trying to labor arbitrage? I mean, that’s the obvious question people might ask.

BILL GATES: Yeah, our business model is not about making the software at a lower price. For us everything is quality of the product, time to market of the product. So, we want to hire the world’s best researchers wherever we can find them.

The country where we spend the most R&D relative to our sales, where the ratio is the highest, that by far is the United States. We are very United States centric relative to our sales.

But we decided we needed to tap into smart researchers on a global basis. And so we were the first to go to China and start a true research laboratory, and the benefit to us, because when smart people come in, other smart people want to work there, that group became immensely productive within two years, even though we thought it would take four or five years. So, the diversity of location has been important there.

India has been a little trickier, because they haven’t had as much of the tradition of graduate research type work, and so there we’re kind of helping them develop that as we grow our research laboratory. In China it was just sort of an overnight success.

MODERATOR: Right.

QUESTION: Thanks for coming. I’ve often heard it said that the biggest problem in a lot of poor countries where you want to give food and malaria nets and things like that is not that we don’t have the money for the malaria nets, but that we don’t have a way to distribute it without it being stolen by corrupt bureaucrats and warlords and things like that in some of these Third World countries.

Is that the biggest problem, and can you comment on what we can do about that, or if we don’t need to worry about it?

BILL GATES: Well, the general thought that the bad governance in these countries hold back improvements in a very dramatic way, that is absolutely correct in terms of the difference between two countries where you happen to get good governance in one and you have bad governance in the other, that determines whether the roads get built and the schoolteachers show up, and there’s a quality system there.

Now, medical interventions actually can be done in countries with very bad governance. You can go in and do vaccination, you can go in and give bed nets. Fortunately, people don’t like to hoard, that rich guy doesn’t want 10,000 polio vaccines. It doesn’t turn him on. (Laughter.) Even a lot of bed nets isn’t that cool for him. You do get a tiny bit where they get used for other things, and you have to be a bit careful about that, but fundamentally these medical interventions, if they’re designed at all carefully, they are not trumped by bad governance.

It’s when you move up to saying, okay, let’s do fertilizer distribution or have fair prices or roads or good education, then that is very difficult to do, where you have bad governance.

Now, fortunately, if you get health right, it brings population growth down, and there’s a lot of data that says that when you have more resources to feed, to educate, these political pathologies you get in are less likely to take place.

MODERATOR: Yeah, I heard one of my colleagues recently say that there are almost never famines in well-governed democratic societies. That’s an interesting insight.

BILL GATES: That’s true. It’s partly because democracy generally comes when you achieve a certain level of wealth, but it is fascinating that — (laughter) –

MODERATOR: But if you’ve got an open press, people find out about the famine much earlier, and get concerned about it.

Let’s go over here.

QUESTION: I believe that the power of Internet comes from the fact that it’s a two-way communication where common people like us can post information, and relay it to the entire world, versus traditional communication devices like the radio or the TV, where certain people control the content that’s being delivered. But I read somewhere that radio and TV when they started it was also a two-way communication where any person could basically put out information on the radio for the world to see and hear.

So, there is some talk about the Internet being regulated in the coming years where content providers can partner with certain companies and actually control what Web site you can visit and what are the activities that you can perform on the Internet.

So, I was wondering if you could comment on the risk of that happening, and what impact that would have on the development of the Internet?

BILL GATES: Yeah. I mean, radio was never two-way in some dramatic way. I mean, there are still ham radios, but it was one to very, very many from the beginning; likewise with TV.

And those were in their time huge breakthroughs. I mean, versus having nothing, that was absolutely phenomenal, really the printing press being the most dramatic change of all.

I don’t see any risk in the world at large that someone will restrict free content flow on the Internet. We can always have disagreements about whether Nazi hate speech should be banned or allowed, or where you draw the line on pornography or copyright or slander or various things. The Internet is not a place where the laws are all just suspended and nuclear bomb designs should be exchanged at will. There are some things that we ought to think, hmm, what about that?

But overwhelmingly you cannot control the Internet. If you’re a country who wants to have a developed economy that’s engaging in trade, you basically have to open up the Internet enough that it’s going to create the ability to find and exchange information.

The people who have tried to do restrictions have actually in terms of any user with any sophistication at all, really haven’t been able to create that type of block.

So, both on a global basis and even in most cases on a local basis, put aside somebody like North Korea where they don’t have much Internet, and they don’t care if they shut down their trade connections, this thing really permanently puts society into a very open situation; in fact, so open that things like designs of bioterrorism and nuclear weapons, or if you don’t like certain types of speech out there, it does begin to raise some very tricky problems, for parents, for example, how should they get involved in making sure there’s not a problem?

MODERATOR: So, would you care to make a prediction about what happens in China and their attempts to regulate Internet access?

BILL GATES: It’s a sieve. Anyone in China who really wants to get at information has a way to get information. E-mail, you know, you can send encrypted e-mail to anyone, and they can’t block that. They can make it so that the most popular homepage doesn’t go and do something in particular, that can happen, but by and large once you have the Internet in place, the power of computation at each of the nodes in terms of encryption means that you really aren’t able to centrally look down and see what the content of that information is.

So, it’s done. I remember when Singapore was debating this about, oh, 14 years ago, that should they allow the Internet or not, and they finally decided they really needed to. I mean, they’re as interested in controlling information as any government in the world, but they decided it would have too high of a cost for them to do it.

MODERATOR: Okay, let’s go over here.

QUESTION: I want to thank you for coming here.

One thing I want to point out, which I’m sure you’re well aware of, that charity is not legislation, and social service is not social justice. But by means of letting there be, like many goals are obtained quicker, but in many cases they are not sustainable.

In what ways is the Gates Foundation leaning towards social justice so that the work you do today will be continued 10 years from now?

BILL GATES: Well, the creation of say the smallpox vaccine eliminated the disease from the face of the earth, and that’s a sustainable thing, it’s gone, assuming no bioterrorist brings it back. The elimination of polio, which is a big cause that we fund, with any luck, within three or four years, we’ll declare that as the second big diseases that’s been eradicated.

These vaccines are really miracles; that is, eventually you can make them for less than a dollar, and a kid takes typically three shots and gets lifetime immunity from the disease, and that even creates some community protection even for the kids who don’t have it.

So, the big barrier is that cost of invention. By the time there is an AIDS vaccine, something over 40, 50 billion will have been spent. By the time there’s a malaria vaccine, that one will hopefully only be more like a few, say $3 to 5 billion will have to be spent. So, once you pay that upfront cost, it’s like software that you develop. Nobody can un-invent it. And the marginal cost of making it is very, very low.

And the great breakthrough in understanding the impact of these things came after the 1960s. In the 1960s the Club of Rome said we’re never going to be able to make enough food, there’s a population bomb; the understanding that as you improve health that you got rid of this growth that meant that you always were up against the limits of how much you could feed people, not to mention educate and other things, that insight only really emerged in the 1970s, and it’s still not broadly understood.

In fact, in the ’80s I didn’t know it, and I thought, well, if I do global health, that’s bad because then there’s more people, and so what do I want, more people or less people. It seemed really confusing. (Laughter.) Then when I saw this link, which is not really commonsense, I thought, oh good, I can go really figure out what the heck is going on with this rotavirus thing.

So, these are fundamental changes in society. If you go to a place like Vietnam today, and see what’s happened as they’ve improved health and education there, it’s just unbelievable the virtuous cycle that a country can get into, once you get out of the trap, the trap having to do with education, governance and health as the things that hold you down in this bad situation.

MODERATOR: So, Benjamin Frankly actually predicted this many years ago, that as societies improve the quality of life, they would have fewer children. It just took a long time to get the message out and make it work.

QUESTION: Hi, Bill. Welcome from the balcony. I’m a big believer in microfinance, a supporter of Keva and Unitas, which I know Gates Foundation and both Microsoft are stakeholders in. It feels like some of the bottlenecks you talked about exist really in capital markets, creating the economic incentives to get at the lower 2 billion of the population. Have you looked at ways to enable financial innovation, securitization of individuals, those types of ways of aggregating consumer interest and unleashing economic potential so that people will go after solutions and cures for people in the lowest 2 billion pyramid of the market?

BILL GATES: Yeah, the key in terms of finance is to do more than just loans, and to have savings and even rudimentary insurance products related to health and crops be part of the mix. And the way to do that is you’ve got to lower the cost of these transactions. Even if you have a zero default rate, the actual interest rates that are break even in the microfinance sector are very, very high. I mean, it would be illegal lending in rich countries.

So, by using the cell phone as a way of knowing who the person is, gathering the data, basically doing digital currency, getting rid of the risk of theft, because you’ll be able to use some biometric in terms of the transfer permission, I think something quite revolutionary can happen to bring particularly savings but also loans and the other products into that bottom 2 billion.

There’s a lot of banks that are partners in looking at this, the cell phone companies who work in these countries, there are some tests going on in Kenya today, and if we just do it the way it’s been done, the transactional cost will mean that it does not scale in a very big way. But fortunately cell phones are out there, there’s a lot of benefits, even in healthcare we see the cell phone coming in, in a very big way, and so that can become the platform that’s used for a variety of these interventions.

MODERATOR: Let’s go over here.

QUESTION: I do a lot of work with children, and we’ve been doing some work, volunteer work in Africa. One of the issues that has really come up for us at the very small level, not at the large level, is the politics of actually getting people in and reaching people.

I was curious as to what your foundation might be doing to help expedite the exchange of humanity back and forth in terms of getting resources to people who need it, whether it’s doctors or people coming in from smaller organizations.

BILL GATES: Well, I don’t think there’s anything that prevents say anyone here from volunteering and going and spending time in Africa for a period of years. You do have to look pretty carefully at how long people are willing to go and spend time in tough conditions. If you go say for a month, that may be a good thing in terms of your enlightenment and how you come back and say lobby the government to be more generous or think about innovations that can help the poor. That’s not a payback period in terms of the work that you actually do in the country; that’s more like a two-year timeframe, say Peace Corps if you don’t drop out or various other programs like that.

And it’s been very tough to get rich country people to come into these things. As I say, the total number, particularly if you leave out religious, nuns in particular, the total numbers are just nothing in terms of what’s really being done there.

Part of the hope here is what some people call south to south, which is getting middle income countries like the people who are well trained in parts of India to not only go to India but also go to Africa. China now has a very interesting set of things where they’re offering to provide agricultural training to people at our foundation gets to come in. Africa as a whole has less than 10,000 agricultural specialists. China has a million and it shows in terms of the kind of productivity, and fortunately, there’s a lot of the crops that are in common.

Can things be done at a distance? Tele-presence type things help in a few isolated cases where you have common language, and people understand the disease or the thing they’re dealing with, but it’s still frustrating that having lots of expertise move into these countries and being willing to stay there, it’s more just the willingness on the part of the rich countries, certainly the poor countries in most cases in any reasonable governance situation are very, very interested. If you take countries today like Ghana or Rwanda or Mozambique, they are just so desirous and trying to make it as attractive as they can, and yet you’ll find more Cuban doctors in Africa by a factor of 10 than American doctors in Africa.

MODERATOR: So, Bill, let me just ask you one last question, because we’re almost out of time. Given the student interest in trying to make a difference in these really poor parts of the world, and given the scale problem which you just alluded to, what’s the one piece of advice you would give them? What’s the experience or how can they really make a difference?

BILL GATES: Well, I’d say two things. One is as a voter, look at how little generosity this country provides. I mean, we do provide some, it’s way better than zero, a few things like PEPVAR, the U.S. government aid thing is an exemplary thing that’s been created in the last five years, and it’s having an incredible impact, but overall relative to our position, we are not nearly as generous as most European countries. So, hopefully people will look at those basic facts and be activated to really speak out about those issues. Basically for less than a thousand dollars you can save lives, and we’re fundamentally treating those lives as being about a ten-thousandth as worthwhile if you just look at the value equation.

I’d say the second thing is probably more interesting, which is pick something, not the whole broad set of problems, but education, a disease, microfinance, and even if it doesn’t necessarily relate to your full time job — although if you can get a connection there, that’s good — and really learn about it.

Now, in the Internet today you can see videos from these villages, you can find out the non-governmental organization that’s really on the ground and doing these great things, and hopefully that will activate you to actually go spend some time there, offer your expertise, even if it’s mostly going to be in the United States, offer some of your resources, pick one of these things to get involved in.

I think one thing that intimidates people, and I think it’s natural, is there seem to be so many things that you can pick, and the ideal is just pick one and have a feeling of a connection and understanding that you’re taking your incredible education and helping to make a difference in that place.

END