Gates: 'Creative Capitalism' Can Fight Global Poverty
Philanthropy Over Profit
Gates acknowledged Thursday that profits may not always be possible when companies try to serve the poor, so corporate leaders should change their thinking and not expect that they must make money from new business models around philanthropy. Rather, recognition for the good it does in the world should be enough for a company to take an interest in serving others, because that recognition also has business value.
"Recognition enhances a company's reputation, appeals to customers and attracts good people to an organization," he said. "In a market where profits aren't possible, recognition becomes a proxy for profit."
In a question-and-answer period following his speech, Gates said that rather than having goals that are too lofty, companies should focus on the businesses they know -- whether food, drugs, media or technology -- to work with governments in developing countries to bring resources to the poor.
Examples of Sharing
He cited an example of an unnamed Dutch company, sharing its rights to a cholera vaccine to provide the medication to Vietnam for less than US$1 a dose, as an example of a company leveraging its core business to bring much-needed resources to the developing world.
Gates also mentioned the Red campaign as an example of creative capitalism. The campaign, supported by companies such as the Gap, Motorola and Armani, was born out of a late-night bar conversation he had with Bono of the rock band U2, according to Gates.
The Red campaign gives portions of profits from products sold to raise money for disease treatment programs in Africa. Earlier this week, Dell and Microsoft said they will sell special crimson-red versions of the XPS line of computers as part of the program. To date, Red has provided $50 million to a global fund for treating AIDS and malaria, and nearly 2 million people in Africa are receiving "life-saving" drugs today, Gates said.
Prior to the Dell announcement, Microsoft already had been putting Gates' idea of creative capitalism in practice through programs such as "Unlimited Potential," which aims to promote technology skills and bring computers to emerging markets.
Business leaders are not the only ones who will have to change the way they think to put creative capitalism into practice, Gates said. Nongovernmental organizations (NGOs) also must be more open-minded about working with businesses to come up with new ways to serve the poor.
"Once upon a time the NGOs had a bad attitude" about working with businesses, because they would expect too much from companies and, as a result, companies that worked with NGOs often ended up with their reputations tarnished, he said. While "there is still some of that, the attitudes of both NGOs and the private sector have improved quite a bit," Gates said.