Bill Gates earned billions by anticipating the market’s needs. Now, he’s more well known for his philanthropic foundation, The Bill and Melinda Gates Foundation, which is helping countless others across the globe.
The primary aims of the foundation are to enhance healthcare and reduce extreme poverty. The video below is from The Verge and is one of our favourite interviews with Gates. We’ve provided the full transcript below incase you want to take any notes.
BILL GATES: It's kind of a special year because the foundation is now 15 years old, and also this year we have the UN looking at the millennium development goals, which were the world's progress from 1990 to 2015 and adopting the next 15 years of goals. So what can we get done by 2030? So we picked health, education, farming and banking and say we think some very dramatic things can happen. In fact we go as far as to say we bet that life for the poorest will improve more in this 15 year period than it ever has before.
NILAY PATEL: So let's get right into the four areas, and I want to start with health because I think, that is where you're making both a set of big bets on what technology can do, and what fixing the infrastructure can do. So what are the two areas that you see happening in health?
BILL GATES: Yeah, health is where we spend the most money. The majority of our work has been there. Part of that is the upstream science, inventing new vaccines, and part of it has been the downstream. Once you have those vaccines, how do you get them out to all the world's children? We're raising the money, so that the limited budgets of those countries don't block them from getting even the very latest vaccines. So one for diarrhea called rotavirus. In the next five years we'll get it out to all the kids. One for a respiratory disease called pneumococcus we will get out to all the kids and those two alone will save over half a million lives and that's why we think we can go from the one in 20 kids. Five percent who die before the age of five now and 15 years from now get that down to be one in 40.
NILAY PATEL: In addition to health, Gates thinks farming will get far more productive for the world's poor.
BILL GATES: To get agricultural productivity up, you want many factors working in your favour. You want better seeds, you want farmers to adopt the best seeds. The farmers have got to be a lot more educated because they can often grow two crops in a season and the way they deal with soil health by rotating the crops can make a big difference. They also need a credit system because if they don't have the money to get fertiliser, that alone will cut their productivity very substantially. And so that farmer education system, that's sometimes called the extension system, the R&D to make those better seeds, which is really very underfunded. By managing those things well, we predict that we'll get African productivity up to 1.5 times where it is today. And that will get Africa to the point where even with its population growth, [and] somewhat worse weather, instead of importing food, it will be able to feed itself.
NILAY PATEL: So when you talk about developing better seeds, that to me sounds like you're talking about GMOs without really talking about GMOs. Is that a term that you're avoiding because it’s a boogieman – even though when people figure out what GMOs are they're generally okay with it. It seems like we're not talking about actually big Agriculture companies doing GMO research.
BILL GATES: Well, GMOs are very well accepted in some countries, like the United States. And not as well accepted in Europe. The African countries will have a choice of whether to use those tools. And there is quite a bit of improvement still available with conventional breeding. But in this time frame, the GMO derived seeds will provide far better productivity, better drought tolerance, salinity tolerance, and if the safety is proven then the African countries will be among the biggest beneficiaries. So by making sure that their safety review is well funded... so it's all done on a basis. The same as we do for medicines, I mean after all, with medicines, some are very dangerous and yet every country says if something goes through a safety review, they're not going to deny themselves the benefit of breakthrough medicine. So I think most of Africa will see this as a way to improve their productivity but it's a sovereign decision. No one makes that for them.
NILAY PATEL: Right, so can you step in and provide a quasi-regulatory oversight and say we've invested in Monsanto, we've invested in Cargo, we've looked at this and our foundation will provide the vouch-safe for these things. Or are you going to leave that up to each of these nations to do alone? When they might not have the resources to do it?
BILL GATES: Well, we can fund training so they have scientists who can staff their safety commission. We can make sure the studies are done and done well. We can incentivise the companies that are making these great seeds for rich countries, we can work with them to make sure it's at least available, actually at a lower price. Because that tiered pricing where poor countries get a better price has worked so well in medicines. That same type of thing we can make sure happens with these crops. But at the end of the day, they get to decide, anything about which vaccines, which drugs, which seeds are okay. That's their country. But their expertise is developing so I feel like they'll make a good choice.
NILAY PATEL: And I want to talk about pricing real quick, so I have a quote here from the UN conference in Trade and Development 2013 report and I'm just going to read it real fast. The perception that there is a supply side problem is questionable. Hunger and malnutrition are mainly related to the lack of purchasing power and or inability for rural people to be self sufficient. And so I guess my question is, is this really about developing more crops, more supply, or is it really about the income inequality in these countries?
BILL GATES: Food doesn't magically move itself from one place to another. Otherwise the sinks of rich world homes, all that nice stuff, good stuff, clean doesn't get eaten, it would be there. And we do have population increase where Africa in particular will grow a lot and then we do have as people eat more meat, there is an inefficiency where you have to grow more grain to create the equivalent number of calories in meat. So we have to increase world food productivity quite a bit. Almost double it by 2050, between all the different factors. And one of the few places where there is acreage that's not being used and that the productivity is way below the world average is in Africa. And so it's wonderful that many of the poorest people in the world are African farmers, getting their productivity up, so that they can have more nutritious food, more food and meeting that global demand. Those two things are going to go together and so it's a huge win win. That as we help them we help feed the world.
NILAY PATEL: Let me ask it much more directly, is it better to invest in the supply side or is it better for you, as a very wealthy man, to just buy people food?
BILL GATES: Well the impact of a more productive seed used by millions of farmers multiplies that R&D investment by factors of a thousand. It's like writing a piece of software that millions of people get to use. Like would I have to go to somebody’s typewriter and type up a word document for them, or instead of using excel, I'm actually good at multiplication, I could have done the multiplication for them, or should I create excel and then it can do a lot of multiplications for a lot of people. So there is something that only philanthropy and government do combined. And it's far more impactful than doing that as a handout. The scale of government as a whole is gigantic compared to philanthropy. Philanthropy has to pick the risky, diverse things that neither the market nor government are going to do and R&D, our pilot schemes to improve delivery, those are the kinds of things that philanthropy is unique at driving forward.
NILAY PATEL: Gates's vision for banking and finance is perhaps, his most idealistic. He believes mobile payments and microtransactions will allow the world's poor more and better access to financial institutions and credit systems. Even if problems like regulation and technology lock-in aren't fully solved.
BILL GATES: Part of it is that the fixed cost of ATM machines and bank tellers and all that means that small transactions are money losing in the old system. There is just too much labour, too much paperwork, too much physical activity. In the new digital realm where we take and build a debit card equivalent that's just your cell phone. As we've seen in a few pioneering countries like Kenya with a system called a system called in M-Pacer or talk about the Bangladesh bKash that's a newer one but that's catching on pretty quickly. They're even 50 cent type transactions, you could have an under two percent fee and so it starts to be economic to bank the very poorest. Not with branches or ATMs but simple with the cellphone. Now all these benefits, okay I'm a farmer when I sell my crop, help me to set aside enough to set aside for next year’s seed and fertiliser. Or my kids are going to school, help me do the set aside so I won't be surprised when the fee requests come in. That is going to be delivered through that digital infrastructure.
NILAY PATEL: So digital infrastructure is something you are particularly expert in, so when I look at that I think that's great and the increased liquidity of transactions and assets when you move them to phones instead of cows obviously makes a lot of sense. The flip side of it is that you're offering a lot of power now to technology vendors, who may not be in a market where poor people have enough market power to move off their platform or pick a better rate, or do anything of the normal things that consumers in an otherwise regular technology marketplace would do. How do you solve that problem? Where you want the best technology product to win or the most fair to consumers to win, but because the vendors who get there first can lock people in, might just necessarily run away with it?
BILL GATES: No, it's a good point. There's a need for a utility type service that lets you move money when you want to pay someone else, pay a store, so that you can pay a store no matter if they use the same bank as you do, you can pay your relative in the rural areas no matter if you use a different bank, or if you want to switch your account from bank one to bank two, and so a lot of our work to get this low cost digital debit card using the cellphone going, is making sure the regulator has set up the right safeguards. And that includes a money transfer system that has very low fees, insisting that every bank that's licensed connect up and have these reasonable fees. It's kind of like phone number portability is in the mobile space that you can switch carrier and not have to change that phone number. And so that's why the foundation's role in working with these regulators and taking lessons from different countries, will help get this into the pro-poor form we can.
NILAY PATEL: So let me ask you, cause there is another answer to this question. So you're talking about relying on regulatory infrastructure and banks participating. But there are many, many investors and smart people out there who will tell you that the answer to these questions is Bitcoin. So what do you think about Bitcoin as a solution to these problems?
BILL GATES: Well the effort to make sure your Bitcoin provider isn't going to lose your money and your understanding of the volatility of Bitcoin, I can hardly say that's ready for poor people to have it go up and down by a factor of two. And you know, oops I was at Mt Gox, now that's not good. Now I'm at bit whatever. So that basic technology shows that digital can do these things very cheaply and the fees that have been built up over time won't stand up even for small transactions. Now making sure the thing is fraud resistant, and money can be refunded, there's somebody to call up if you think you transferred to the wrong account, or your account balance is not what you expect. So I'm not thinking that the poor should get out there on the cutting edge. Also governments, for most transactions will want attribution. That is the idea of a system where you can't see is that drug money, is that terrorist money, should that be taxed... you're going to have some tension between the attributed systems like credit card, debit card systems where there is actually a record of who's engaging and the purely anonymous ones. But the one I see getting us to critical mass along with the government and regulatory support that we need is one where it is attributed where we can see who actually did this transaction.
NILAY PATEL: Gates also thinks education will dramatically improve in developing countries, as online learning tools make it easier for students and teachers to connect around the world.
BILL GATES: Well the availability of the world's best teacher who can see where you’re confused, set the right pace for you, where all your engagement with that material your teacher or your parent, or your friend can connect up and see where you're stuck and give you some advice... we're not there yet. 15 years ago we were just sticking cameras in front of people and putting it online and saying isn't that the solution. Now people like Khan Academy and hundreds of others have said the lecture piece is part of it but interactive problem sets and having your coach see what it is and understanding the nature of what you might be confused about, and explaining to you why you should gather this knowledge. And so the view is over the next 15 years, that type of material will be wildly better than even the best is today. And it will be available through phones and tablets, it won't replace face-to-face, the social context, the relationship with that teacher but it will be playing a gigantic role in letting you catch up, move ahead and overcome whatever limitations your class size has.
NILAY PATEL: So you might be the most famous motivated learner of all time and one thing that you had, when you talk about this vision that these kids might not have, is that you were surrounded by open systems by which you could tinker and play. So I think about critical skills 15 years in the future and I think programming is one of those skills, and building and hacking is one of those skills, and if you're doing on a phone, even one of Microsoft's phones or Apple's phones, or you're doing it on tablet to some extent, one of Microsoft's tablets, one of Apple's tablets, these systems are closed. They don't let you tinker and get in there. Where do you see that next generation of hackers coming from in the developed world if they can't have access to sort of the inside?
BILL GATES: Well, I'm sure that it doesn't exist as well as it should today, but there should be sandboxes even inside take the extreme case, iOS, where you can have arbitrary code so we should be able to let people play around. I'd have to say that the priority of getting people coding, and getting people exposed to code that's something I'm a backer of code.org, I think they're doing a good job, a day of coding, girls that code. Lots of good movement there, because we're not dealing with the basics of reading and writing in these poorer countries, I think for the next 15 years, most of the energy is going to go into the basics. I'm enthused about people programming, I think we can enable it but our agenda is really at the more basic level.
NILAY PATEL: So I think this is really important and it's something you bring up in your letter. You talk a lot about the systemic inequality in education, particularly in the developing world, particularly for girls, I haven't seen a lot about how you intend to address it. You just acknowledge that it's a problem and if you add the tools, women with the means and motivations to use them, will use them. But how do you really attack the systemic inequality there?
BILL GATES: Well, if you look at primary school enrolment, secondary school enrolment, 15 years ago versus today. Countries are making a lot of progress on this. The idea that parents should not keep the girl in the house, should let her go out to primary school - that's broadly accepted. Now we need to get there for secondary school. The United States now... business school, medical school, male-female ratio are actually in some cases, favouring the women. It's still the sciences, particularly the very hard sciences, and particularly as you get up to the PhD level where we still have this huge gender imbalance. It's a very cultural thing, each country may have slightly different tactics of how they get the parents mindset about the investment in both boys and girls are equally valuable, equally important.
