It’s good to be thinking like the king of the technology world. This Thursday before a standing-room-only crowd at Davos, Microsoft chairman Bill Gates coined the phrase “creative capitalism” to explain his new vision for making the world a better place.
Making the transition from software baron to social philosopher. Gates called for a new type of “creative capitalism” that generates profits while also improving lives of people who don’t fully benefit from today’s market economy.
“There are billions of people who need the great inventions of the computer age, and many more basic needs as well, but they have no way of expressing their needs in ways that matter to the market, so they go without,” said Gates. “If we are going to have a chance of changing their lives, we need another level of innovation. Not just technology innovation, we need system innovation, and that’s what I want to discuss with you here in Davos today.”
“The challenge here is to design a system where market incentives, including profits and recognition, drive those principles to do more for the poor,” said Gates. “I like to call this idea creative capitalism, an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.”
If you haven’t read the speech, you should. It’s quite brilliant–in a totally different league than Gates’s disappointing remarks at the Consumer Electronics Show. Although Gates is known for being one of the world’s most intense competitors (under his reign after all a U.S. District Court found Microsoft guilty of engaging in anti-competitive behavior, and the company continues to draw the ire of regulators across the world), I applaud his attempt to focus more attention and resources on tackling global poverty.
The good thing is that such a movement already exists–and in his speech Gates rightfully recognizes some of the movers and shakers, such as C.K. Prahalad. Over the last five years, many tech companies have invested heavily in developing nations because they already see the huge profit potential in those fast-growing markets. And entrepreneurship is becoming a global phenomenon as many poor people begin to use their own initiative–and small amounts of capital–to improve their living conditions.
The best example is the work of the Bangladeshi banker and economist Muhammad Yunnus, who pioneered the idea of micro-credit. Such loans are given to entrepreneurs considered too poor to qualify for traditional bank loans. In the 1970s, Yunnus started the Grameen Bank to make these small loans. He was inspired during the terrible Bangladesh famine of 1974 to make a tiny loan of $27 to a group of 42 families so that they could create small items for sale without the burdens of predatory lending. In 2006, Yunus and the bank were jointly awarded the Nobel Peace Prize, “for their efforts to create economic and social development from below.”
At the end of his speech, Gates laid down a huge challenge. “I’d like to ask everyone here, whether you’re in business, government or the non-profit world, to take on a project of creative capitalism in the coming year,” he said. “Whether it’s foreign aid or charitable gifts or new products, can you find a way to apply this so that the power of the marketplace helps the poor? I hope corporations will dedicate a percentage of their top innovators’ time to issues that could help people left out of the global economy. This kind of contribution is even more powerful than giving cash or offering employees’ time off to volunteer.”
Has anyone heard of any companies or governments that have answered this challenge? It’ll be interesting to see how people respond to this call to arms.
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