Al Hammond

Bill Gates Calls for Capitalism That Serves the Poor

In a speech at Davos today, Bill Gates called for a more inclusive capitalism that “would have a twin mission: making profits and also improving lives for those who don’t fully benefit from market forces.” That is a major milestone in the evolving thinking of perhaps the most influential philanthropist of our time.

In 2000, I organized a conference in Seattle on Creating Digital Dividends at which Mr. Gates, in a keynote address, famously said that “poor people don’t need computers” and rejected a business approach to alleviating poverty. Within a year, however, he had changed his mind, and Microsoft became a leader in seeking ways to provide affordable services to low-income populations?in some small measure with WRI’s help.The beginnings of a more full-fledged belief in inclusive capitalism, according to the WSJ today, came at a dinner in Seattle, organized by WRI, in which Mr. Gates spent several hours talking with BOP guru C.K. Prahalad (in his capacity as a WRI Board member). I was also at that dinner, and remember Mr. Gates saying to me that the question was how far towards the bottom of the pyramid could business approaches go?not too far, was his assessment. But again, his thinking evolved.

Now Mr. Gates is arguing that capitalism, appropriately pursued, is in fact the best hope to bring services and improve productivity and create opportunity for the world’s 4 billion poor – and that, accordingly, the world needs to invest much more heavily in the micro, small, and medium-sized enterprises that are close to the poor. If Mr. Gates puts the muscle of his foundation behind such enterprise development – which we have long argued is the principal bottleneck to a successful BOP business approach – then perhaps the world will really change.

Update: The full text of Gates’ speech is available over at Polity. Bruce Nussbaum at BusinessWeek also has some analysis, including kind words for NextBillion ally Acumen Fund and its CEO, Jacqueline Novogratz.