The Chinese translation is not quite the same as the English original (it is too long, the English is in the reference materials):
This is what Microsoft Chairman Bill Gates said in Davao in January this year He considered it to be his most important speech given at the Sri Lanka Forum.
There are two huge forces in human nature, one is self-interest, and the other is caring for others. Capitalism harnesses the power of self-interest in human nature and achieves economic progress and social development, but it only serves the rich. The poor can only rely on government assistance and charity. The new capitalism of the 21st century needs to adjust to this and serve the poor through market forces and institutional innovation.
The world is getting better and better, and the progress is very obvious. In the next few decades, humans will also have amazing new powers, more powerful software, more accurate diagnostic methods, more effective treatments, better education, and better development opportunities, and there will be more and more The more talented people contribute creative ideas to solve problems. This is the world in my eyes.
I am a very optimistic person, but I am impatient. It is true that the world is getting better, but in my opinion, the speed is still too slow, and the world is not getting better for everyone. Great progress always increases inequality. Those who have adequate food and clothing can enjoy the improvements brought about by technological progress, while those who are poor and destitute have little benefit, especially the poorest billion people who live on less than 1 US dollar a day.
Globally, almost 1 billion people lack enough food, clean drinking water, and electricity, the basic necessities of life that we have become accustomed to. More than 1 million people around the world die from malaria every year, yet the disease gets less attention than drugs to treat hair loss. The poorest one billion people in the world have not enjoyed the benefits of globalization. On the contrary, they have suffered the disadvantages brought about by economic development. They were left aside. The cause of climate change has nothing to do with them, but it has the greatest impact on their lives.
Why are people’s needs always inversely proportional to the fruits of economic development they can enjoy? The reason lies in market incentives.
In the capitalist system, as a person's wealth increases, the economic motivation to serve him increases accordingly; and if a person's wealth decreases, the economic motivation to serve him weakens until it is completely disappear. We have to find a way to make the very nature of capitalism that works for the rich also help the poor.
The secret of capitalism is its ability to make self-interest serve the interests of the wider society, and to drive innovation through financial returns. The capitalist system driven by self-interest has given rise to many incredible innovations that have improved the lives of many people.
In my opinion, we need a new institutional system to allow self-interested dynamics to work so that everyone benefits. There are two huge forces in human nature, one is self-interest and the other is caring for others. Capitalism harnesses the self-interested power of human nature so that it can continue to play a beneficial role, but only for those who can pay. And those who don't have money to buy services have to rely on government assistance and charity.
But in order to quickly change the lives of the poor, we need an institutional system that is better able to attract innovators and businesses than we have now. This new system has two missions. The first is to make money, and the second is to improve the lives of those who cannot fully enjoy the benefits of the market economy.
In order to make the system sustainable, we must use profits as incentives. And if the objects served by the enterprise are very poor, then profits are unlikely to be generated. Then we need another incentive method, which is recognition. Recognition of an enterprise means that its visibility has increased, and visibility can attract customers. More importantly, it can attract outstanding talents to join. This visibility allows good behavior to be rewarded by the market. When a company cannot make a profit in the market, visibility can be a substitute; and if it can achieve market profits, visibility is an additional incentive.
Our challenge is to design a new institutional system that allows market incentives such as profit and visibility to work, making companies more inclined to serve the poor. I call this idea creative capitalism. Through this approach, governments, businesses and non-profit organizations can cooperate to allow the market to function on a larger scale, so that more people can earn profits or receive recognition, ultimately improving global inequality. phenomenon.
Some people may object to this kind of market-based social change. They believe that if emotions and self-interest are combined, the scope of the market's role will not be expanded, but will be reduced. But Adam Smith, the originator of capitalism, the author of "The Wealth of Nations," a thinker who firmly believed in the value of self-interest to society, wrote this in the opening chapter of his first book: No matter how you look at people, No matter how selfish one is, there are clearly certain fundamental principles in human nature: a person is interested in improving the lot of others and regards the happiness of others as his own necessity, although he does not get anything from it, but he feels happy just seeing it. satisfy.
Innovative capitalism links this interest in the fate of others with concern for one’s own fate, helping others while improving oneself. A combination of self-interest and altruism can benefit more people than pure self-interest.
Innovative capitalism combines business expertise with the needs of developing countries, where markets have always existed but there have been no companies to exploit them. Sometimes, the market economy approach does not work in developing countries. It is not that there is no demand in developing countries or that they are short of money. The real reason is that companies do not spend enough time to study the needs of the market. Prahalad has a wonderful discussion of this in his book "Wealth at the Bottom of the Pyramid". This book has had a huge impact on many companies and enterprises, and it has helped these enterprises expand their profit margins through special innovations.
Here I can give an example. The World Health Organization wants to expand access to meningitis vaccines in Africa. But it did not directly contact the manufacturers of vaccines. It first went to Africa to understand people's ability to pay. The organization learned that if African mothers were to vaccinate their children against meningitis, the vaccine would cost no more than 50 cents. The World Health Organization then required cooperative manufacturers to organize production according to this price standard. In fact, an Indian pharmaceutical company found a new production method and lowered the price to 40 cents. The World Health Organization allows the company to provide 250 million meningitis vaccines to the public health system over the next ten years, while also allowing it to sell its products to private medical institutions.
Another example is that a Dutch pharmaceutical company owns the property rights to a vaccine. The company charges patent fees to companies producing the vaccine in developed countries, while exempting companies producing the vaccine from developing countries. As a result, the cost of producing this vaccine in Vietnam is less than 1 US dollar, and this 1 US dollar also includes shipping costs and immunity promotion costs.
Because the marginal cost of many important products today is already very low, including software, medicine, media works, etc. This tiered pricing approach allows people without money to afford some valuable products. This pricing method can actually be promoted on a larger scale.
The projects I cited can give us some inspiration. People who work to meet the needs of developing countries need to work with scientists, because scientists know where breakthroughs can be made. This is true in the software industry as in the pharmaceutical industry. Together, people from both sides can find ways to get good ideas implemented in poor countries.
Another way to achieve innovative capitalism requires direct government involvement. Of course, the government has done a lot of work to help the poor. This is not just an effort to cultivate the market. The government has invested a lot of financial resources in aid, scientific research and medical care. These jobs are very meaningful. But I think the best way for the government to mobilize resources is to introduce policies and encourage companies through the market to make efforts to improve the lives of poor people.
President Bush recently signed a bill that would allow a pharmaceutical company to sell its highly profitable products if it develops a new treatment for a long-neglected disease like malaria or tuberculosis. , for example, a drug to treat cholesterol can be marketed two years earlier. This priority may mean a market worth hundreds of millions of dollars.
Another way to achieve innovative capitalism is to help companies from poor countries enter the markets of developed countries. I will be here tomorrow to announce a partnership that will help African farmers access the market for premium coffee. The purpose of the plan is to double the income of these farmers from growing coffee. It helps African farmers grow high-quality coffee and connects them with businesses who need to buy coffee. The final plan will lift coffee farmers and their families out of poverty.
Finally, there is one of the most creative ways to achieve innovative capitalism. Late one night a few years ago, Bono (the lead singer of U2) and I were chatting in a bar in the small town of Davos. After a few drinks, Bono became very excited. He talked to me about how we could use charitable companies to use a small percentage of their sales to help change the world. That night he kept calling, waking people up from their sleep, and then handed the phone to me to let me know they were all interested. It took us a while to get this started.
But Bono is right. If a person realizes that while buying a good product, he also has the opportunity to participate in a social cause that he values ??very much, then he will be very happy to buy it. This is how the Red Movement was born in Davos. Products from GAP, Motorola, Armani and other companies have participated in this event.
This week, representatives from these companies gathered at Microsoft to discuss next steps. Over the past year and a half, we have raised $15 million through this campaign to fight HIV, tuberculosis and malaria globally. The result is that today almost two million people in Africa receive life-saving medicines. More and more people around the world now realize that change can be sustained if the right incentives are in place. Because profit and recognition are resources that can be continuously renewed.
What’s more important is that on this basis, entrepreneurs all over the world, regardless of gender, can transform their life-improving ideas into products and services that people can afford. President Clinton played a unique role as a member of a non-profit organization that helped connect producers in developed countries with consumers in poor countries. Some companies also set up special awards for what they consider social capitalism.
I just gave a few examples to illustrate the growing interest in such innovative institutional systems in the world. This will be a global movement, and each of us has the ability and responsibility to accelerate this process. Everyone here, whether you are from business, government, or non-profit organizations, I would like to invite you to engage in innovative capitalism activities in the new year. To see if we can expand the impact of the market economy, we have to get something done, whether it's international aid, whether it's a charitable donation, or whether it's a new product.
Can you use such an innovative institutional system to let market forces play a role in helping the poor? I hope that companies can arrange for their most innovative R&D personnel to spend part of their time thinking about these issues, so as to help people work together to promote the global economy. This type of contribution will be more valuable than a direct cash donation. You might be able to give employees time off to volunteer, allowing the company to focus on what you do best. It is also a form of innovative capitalism, because this intelligence, after making life better for those with money, then works to improve life for everyone.
There are already many pharmaceutical companies, such as GlaxoSmithKline, that allow their most creative R&D personnel to develop drugs that help the poor. Japan's Sumitomo Chemical uses their expertise to build a mosquito net factory and then donates it. In fact, there are many such examples in the food, high-tech, mobile phone, and banking industries. In fact, what I want to say is that if companies in all industries can do what these companies do, the inequality in the world will be greatly improved.
We live in extraordinary times.
If we can explore ways to meet the needs of poor people in the first decades of the 21st century and find ways to bring profits and recognition to businesses, then our efforts to reduce world poverty can be sustained. This mission never ends. I am very excited to be able to devote myself to this cause.