Bill Gates: Microsoft Government Leaders Forum – Americas 2007

BILL GATES: Well, good afternoon. As Eugenio said, it’s a fantastic time to be having this forum. We have a distinguished group here, but we’re in a period of time where the opportunity to take technology and make investments to improve all aspects of the economy have never been stronger than before.

And so with these opportunities, an event like this gives us all an opportunity to talk about success stories, talk about failures, talk about policies, talk about working together where we can share efforts to fully exploit this opportunity.

I think the framework of competitiveness is a fantastic one, because after all, the world as a whole is becoming more competitive. And this is an opportunity where everyone can benefit. As different countries move up and educate their people in a better way, that creates markets for the other countries, it creates innovation, whether in medicine or education or any sector of the economy that benefits the entire world, and so all countries should be reaching out to seize these opportunities.

Technology as an Enabler

I want to talk a little bit about technology and why it’s become such an enabler. After all, the Internet and the personal computer were not perceived by economists 20 years ago as fundamental change agents, and, in fact, economists have always had trouble dealing with innovation. When they model the economy, they assume that the way things are done is fairly constant, and so innovation has really defied the ability to understand what kind of role it has played or will play in the future.

And yet innovation through technology is actually accelerating. Innovation is where we see products like the personal computer itself that has become a million times more powerful at the same time that its price has been reduced by a factor of 10. We don’t see that in many other sectors of the economy.

The Internet itself, the way that it connects people together, the way it lets you be more informed is a very dramatic thing.

One example I gave earlier today was that the United States government, whenever it would use equipment and be done with it and want to sell it, it used to be the cost of organizing a bid process to sell that used equipment was higher than the revenue you could receive, and so it was a paradox. You could either just throw it away or let somebody sort of take it who wasn’t the right person, or you could spend more money than you’d receive just to make sure you’d gone through the right process.

Well, of course, today that’s utterly changed. No matter what level of government it is, whenever they are done with some equipment, they just post it, and within 24 hours they have a bidder, and you know that’s been done in an open and transparent way. So, the amount of personnel, the efficiency of payment, it’s all dramatically better.

Take another example. Say you can actually use used equipment. Say it’s another part of the government. How would they know about each other? Well, in fact, the Internet has made that possible.

Power of the Digital Revolution

With the all the devices connected to the Internet improving based on the miracle of chip technology that doubles in power every two years, we can expect some amazing things. We can expect that things like looking at maps and seeing a map of the city and seeing the current traffic or pointing to any building, say pointing to the courthouse and seeing what’s the calendar there, seeing a camera of what’s going on there, that will become just a very commonplace thing. For somebody who wants to know are any of my colleagues or friends in the nearby area, is there a nearby restaurant or gas station, being able to glance at your phone and talk to it and say, “Where are the restaurants” and have that show up, and show up according to your preferences, what type of restaurants have you liked in the past, all of that will become just a very standard thing.

Digital approaches are replacing non-digital approaches. The place we’ve seen this most strongly today is that music is moving from being based on physical media, cassette tape or CD, to being something you can download over the Internet. It gives you the convenience of a big catalogue, it lets you get comments from your friends, lets you organize things the way you want. It’s clearly raised huge challenges in terms of piracy, because of the ease of acquiring that, but it is a much more convenient way to use the information.

That same sort of total replacement is taking place in other areas. Take the encyclopedia. The online encyclopedia, whether it’s Wikipedia or Encarta, is far better than anything that’s in print.

If you’re starting a small business in a country, instead of trying to go find a pamphlet or some printout that some government office has done, going to the Internet site and doing a search is a far better way of finding that material.

We used to have phone systems, so-called PBXs. Well, we won’t need those in the future; it will just be low-cost computers connected to the Internet.

TV has been a broadcast medium that’s separate from the Internet, but over time, TV signals will be delivered entirely over the Internet. And what that means is all these limitations of channels that you’ve had, and the fact that the show is the same for everybody, that just completely goes away. You watch the things you’re interested in, and even the news segment is displayed according to what’s important to you. You watch it when it’s of value to you. You can do a search command and say, you know, was my name mentioned on any shows; OK, I’d like to see that, show me what’s going on. Is there a topic that I care about?

Even take the idea of education. The best universities in the world are putting their lectures online so that you can search and call them up and watch them. And so the very best in economics, geology, physics, health, they’re all there.

I’m an avid consumer of those lectures on the Internet. I find it a great way to learn. And I can even find the tests that they give at MIT or Harvard and see if my knowledge matches up with that.

So, the digital revolution is accelerating. The elimination of paper forms and printing things in paper, that really is coming. And if we look at a long period like 10 years, the idea of a very inexpensive tablet-like device that connects up to the wireless Internet, and is far superior for reading than any other approach, that will be the way that certainly young people will consume newspapers and magazines and books and any interaction that they’re willing to have with government would be done in that kind of digital way.

Even the very tough problems in software like speech recognition or visual recognition, with the power of these chips, we are making progress on being able to achieve that.

Our storage systems used to be able to store documents so that now you could type your entire life and not fill up a $50 disk. Well, the disks we’re getting now, we can even record meetings, and that video fits very well. So, the idea that all the government meetings are recorded, a transcript is created so people can search and find things in there, that’s commonplace. If you have an organization where you have offices at a distance, inexpensive video cameras can record the meeting, software can direct it, create a transcript by doing the speech recognition, and people who are remote can either participate in that meeting or go back later and just see the part of the meeting they’re interested in. In fact, we let them watch it at double the speed that the meeting took place. So, talk about saving time; you’ll only watch the part of the meeting that you’re interested in, and you watch it twice as fast as the people who had to actually attend. Just that alone, think of the world’s productivity, think if meetings were twice as effective as they are today. Even for business that would be a huge impact, not to mention government.

And so the technology horizons are very wide open.

Digital Economic Power

We can see the economic opportunity created in IT as well. Just taking taxes, one measure, the IT industry in 2005 paid $8 billion in taxes in Latin America, and by 2009 that will be over $11 billion. We have great job growth. Over the next four years it will go up from 10 percent to about 20 percent, generating lots of new jobs. And one thing I can say for sure is that to the degree your universities are turning out people who know how to do great work in science, math, engineering, or computer software, the demand for those people will far exceed the supply. That’s actually true even inside a country. There are very few countries that will turn out more of those skills than they need just for projects in their own country, not to mention taking those people and having them work in businesses to do work that could be offered on a global basis. So, we have this global shortage, and wherever those people are, there will be lots of great jobs created around them.

Now, Microsoft has had a long-term commitment to Latin America. In fact, it was very interesting in the 1980s, because we had a constant commitment to the region, as the economies would sometimes boom and bust, many of our competitors would actually pull out, and so we ended up because of our constant engagement going through the ups and downs, actually having great long term relationships and great partners.

The way measure ourselves worldwide is actually through these partnerships, how many partners do we create in a country who have the skills to do things like the most challenging e-government project, or to help the businesses in a country be as competitive as possible. And so whatever the economy has specialized in, whether it’s biofuels or another type of agriculture or healthcare, whatever it is, make sure that the partners in the country have the best skills possible to deal with that.

One ratio that’s interesting is that for every dollar in sales that we have in this region, our partners have about $15 in sales. So that’s the hardware, the consulting, the support, and the applications.

And our goal is actually to make that ratio be as high as possible so that we can stay focused on the base platform software, things like speech recognition that’s very global in nature, and let the specific understanding be something we bring together with our partners.

Microsoft’s Investment in Human Resources

I know in this forum there will be a lot of talk about education, and that’s fantastic. If you had to say, OK, what drives competitiveness, yes, there are a lot of things. You want to have a great network infrastructure with low-cost broadband, you want to have deregulation wherever possible, you want to tap into market incentives wherever that’s possible, but I think number one without anything even being close is the investment that’s made in education.

If you look at any economic miracle, any economic advance that’s taking place in the world today, and put aside a few cases where oil or other resources created that one opportunity, with that one exception, it’s all driven on the investment in human resources.

People often say to me, well, what are the tax policies that encourage software development? Well, there are some great things in terms of R&D credits and export credits and things like that. But the United States, which is not well-known for low taxes, its success is not because of some financial structure, it’s rather because of the strength of the universities.

And so education brings us two interesting challenges. We need to train all the students to be familiar with IT and have great education, and we need to make sure that the universities are turning out these world class students. And so we have to address both of those things in parallel.

I think that schools will change, not overnight but they will change substantially. It’s easiest to think how the university will change, because there these online courses and the fact that the students are quite motivated means they will seize these digital tools.

As you move down to a younger age, it’s much more the social framework that the teacher creates, the motivation around that teacher that makes a big difference.

So, how can we help those teachers? Well, let’s say that they can go online and find some way to explain their topic in a way that’s more engaging, find something, say they’re trying to explain calculus. Well, they might go out and get something about rockets or something about global warming or something about volcanoes and show how you need those tools of math to understand very interesting questions about those topics. Now with the online world, the idea of teachers sharing their work, not just videos of what they do, although that will be part of it, but also the animations, the pictures. They can learn from each other and share and search out the things of interest.

Part of that involves getting computers into the classroom, and in every country in the region we’re involved in what we call Partners in Learning in doing that.

We’re also starting something new, which is taking schools that are designed for how all schools will be within the next 10 years. We call these our Innovative Schools, and in these we go ahead and together with our partners make sure that every student has a laptop or tablet computer; rolling them out in 12 locations around the world, and three of those in this region, one in Brazil, one in Chile, one in Mexico, and we’ll be adding to those. In fact, I was talking today with some people here who are looking at doing Tablet pilots, which is really part of what this is about, how do you change the curriculum, how do you get the teachers engaged. After all, the teachers need to be enthused about this. If they feel like the students are going to be way ahead of them and that when you bring computers in, they’ll just look poorly, then they’re going to be resisting this change, and yet we want them to drive it.

You know, we’ve seen some incredible students from this region. For example, our Imagine Cup, which is a global competition, a lot of the students from this region have ranked very much in the top in what’s come out of that, so, the potential is clearly here.

I talked about this Partners in Learning. That’s where we provide low-cost and donated software, but more than that, we provide training. The amount we have now, in 19 countries we have over a million teachers who have been trained. And that, of course, is just the beginning because there’s even more to go.

We also think of education as a lifelong thing. So once you graduate from school, you may need to acquire new skills. And that’s where what we call Unlimited Potential where we’re in the community centers comes in. There are some particular target activities that we tune to the country that we’re in.

One theme that we have on a global basis is how software can help disabled people. There’s quite a range of disabilities. For example, people who are blind, historically they had very little access to information. They could get a few books that were put into Braille form many years after they were published, but less than 1 percent of books were ever put into that form. Today, with the software work that’s been done, you can actually as a blind person connect up to the Internet, and through what’s called a voice readers navigate and have the full benefit of browsing. So, it’s not just all the books that are online, but any of the Web sites, and you can use the software tools. And so even in that case, which has been one of the most difficult, their opportunity to qualify for jobs has been greatly improved.

Other people with disabilities, doing special work to make sure that the keyboard can work for them and special things, there’s a lot of particular work.

We have a great partner, which is the Partnership for Opportunities in Employment through Technology in the Americas, POETA, that has done great work, and we’re pleased to be working with them. In fact, we have 29 centers with them today, and today we’re announcing that we’re going to create eight new centers, and that’s going to reach 25,000 additional people.

And I always say so the engineers at Microsoft, if you want to understand why our work is so important, you can visit many places to see it, but going to these centers where we’re helping disabled people, that’s probably the most impactful of all. It just shows how the magic of software, when used in the right way, really can change people’s lives.

Digital Challenges: Security

Now, another challenge as we’re moving to this digital world is security. That’s an issue for businesses, it’s an issue for parents, it’s an issue for e-government applications, and it’s a big area of focus for Microsoft. We’ve had things like where we share all of our security expertise, including even through Windows source code, with governments who are interested, and we have Security Response Centers where we work together with the governments.

Recently SERPRO, which is a Brazilian IT center, together with the Brazilian federal university, Microsoft created a center, which has all this expertise, and so this ability to bring together private expertise but people from the country to think about, OK, how do we make sure that identity theft or flooding the Internet or doing something bad, through this critical infrastructure how do we bring the right expertise to that, that’s something we’re all responsible for getting involved with.

In terms of online safety, part of that is training kids. We have a particular thing that’s Navega Protegido, which is making sure that kids get an exposure to understanding what Internet safety is all about. We’ve got a lot of good partners in that, and one of the partners, a new one, is the Ricky Martin Foundation, who’s using his fame, his commitment to this area to produce awareness videos that will help draw more kids in.

We also, of course, were able in our new software to build in more capabilities. A lot of things you would have had to buy that were extra are now standard. So, for example, when my kids are using the Internet, I do a little bit of restriction about where they can go, but that’s not the key thing. The key thing I do is I have it so the log, the audit of where they’ve been on the Internet is maintained as a file on the computer. And so about every week I can go in and browse that, and think, OK, where has my daughter or my son, where they have been going, and is that something that I’d like to talk to them about, and just think it’s invaluable for them to be in a discussion about that.

And they know this log exists, and so perhaps that influences their behavior as well, and helps them think about this. And in the past that would have been very difficult to do, and now that’s been made fairly simple.

Another system that relates to security is that police forces worldwide, we’ve made available a piece of software called the Child Exploitation Tracking System, CETS, that’s being used in more and more countries. Brazil and Chile have it available, and Colombia and others are looking at putting that into place.

It’s a good example where a best practice in this case emerged up in Canada. We weren’t involved in the original creation, but we saw that and we encouraged them to make it available worldwide, we put some money into that, and now we have literally dozens of countries. And not only is it a good system, it’s based on very inexpensive hardware. So, it often replaces paper-based systems that are more expensive to run, or mainframe based systems, but it’s way more effective, and particularly as you have more and more people using a standard system, doing this tracking between countries becomes very straightforward because the way that things are described and tracked and notified is very simple.

Of course, there are many examples like this that are going on. Government databases now with low-cost hardware can be done in an amazing fashion. The idea of having government employees empowered where they have the PC, they’re connected to the Internet, they have electronic mail, you have these server systems where even a database that has information on every system, those can be very inexpensively created today. And so now the issue is how does the design work, how does the user interface work, how does the integration work. And we’ve seen that smaller governments have an easier time. Why is that? It’s the integration across the departments is so much easier, and so many of the best practices are coming out of small countries in different parts of the world.

So, again I want to thank you all for coming. For all of you, I do encourage you to share. That’s the whole idea here. Whether it’s a success or things that have been a big challenge, that’s what we all want to hear.

I do think there’s a lot of entities that are part of building this future: private entities like Microsoft, nonprofits like many foundations that step in, in some of these areas. And I hope the examples here will really inspire you; I know they do me, and that’s why, as Eugenio said, this Government Leadership Forum has been something I’ve devoted a lot of time here.

And I think if we look at the current mood of investment in competitiveness here in Latin America, 10 years from now, I think we’ll say, wow, that was the approach that made the difference and allowed Latin America to seize these 10 years and make even more progress than the optimists expected.

Thank you.