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Last Updated: Thursday, 24 January 2008, 19:23 GMT
Gates wants creative capitalism
By Tim Weber
Business editor, BBC News website, Davos

Bill Gates speak at the WEF
Bill Gates says capitalism does not work for all

Bill Gates has challenged companies to engage in "creative capitalism" that delivers profits and helps the poor.

This "capitalism for the 21st Century" had to improve the lives of those who did not benefit from market forces.

The Microsoft founder said capitalism only worked for those who could pay, so firms had to find out "how the power of the marketplace can help the poor."

Mr Gates made his appeal to some of the world's most powerful business leaders at the World Economic Forum in Davos.

It was his last speech in Davos while still a full-time employee of Microsoft. Mr Gates is due to leave the company so that he can focus on the philanthropic work of the Bill and Melinda Gates Foundation.

'Impatient optimist'

Mr Gates said the world was constantly "getting a lot better, in significant ways", with life expectancy rising, and the lives of women and minorities improving.

Many improvements had been triggered by advances in the fields of science, technology and medicine.

Dell and Microsoft "Red" laptop
A share of the profit from this laptop helps to fight Aids

But while he was an optimist, he also was an "impatient optimist," Mr Gates said.

"The least needy see the most improvement, and the most needy see the least improvement, especially those that live on less than $1 a day," Mr Gates warned.

Climate change, meanwhile, had "the biggest impact on those people who have contributed least to its causes".

Mr Gates, who by some calculations is still the richest man in the world, said the genius of capitalism was that it made self-interest serve the broader interest of society.

However, there was one drawback. "As wealth rises, the financial incentives to help people rises, as they get poorer, it falls," and the world's poorest were losing out.

Where profits were not possible, companies should be happy to receive recognition instead.

Red campaign

"We need a creative capitalism where business and non-governmental organisations work together to create a market system that eases the world's inequities," said Mr Gates.

He pointed to the Red campaign, launched two years ago in Davos by rock star and anti-poverty campaigner Bono.

Companies like Converse, Gap and Armani co-branded their products with the Red brand, and in return hand over a share of their profit to a fund fighting poverty and Aids in Africa.

This year, Red hopes to raise $100m (51m) this way, and on Thursday also announced two new branding partners, computer maker Dell and Microsoft itself.

For every computer sold, the two companies will pay between $50 and $80 to the Red campaign.

Mr Gates also lauded drug companies that were selling vaccines to Africa for a much lower price than in developed countries.

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