Gates Deflates Digital Dividend Moguls

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October 18, 2000 (6:18 PM EDT)

By Charles Bermant,

SEATTLE -- Microsoft Corp. co-founder Bill Gates challenged participants at the Creating Digital Dividends conference, saying that direct technology investments in developing countries might be useless if the population isn't healthy or literate.

"Once you have solved these problems, then you have the chance to bring in the tools of new communication," said Gates, chairman and chief software architect of the world's largest maker of desktop software.

Gates' comments let some air out of the tires at the three-day conference, which had focused on the ways that private industry can make investments in developing countries.

Most of his address was concerned about health issues, and during a subsequent question and answer session he was unwilling to tailor his remarks to the predilections of Business Week chairman of events Scott Shuster, who was serving as moderator.

At one point, Shuster pressed Gates about the viability of the market of people who make less than $1 a day. Gates paused, and said that this was "not a significant market" before addressing the comment more directly.

"Do people have a clear idea of what it means to make $1 a day?" Gates said. "There is no electricity. No power systems. These people are trying to stay alive. There is no need for a PC."

When Shuster mentioned solar power as a possibility Gates became even more agitated, saying solar power was not affordable at that level. Shuster then talked about CEOs who "get it" with regard to the Internet, and stated that Gates -- if these "health first" comments were any indication -- didn't "get it."

"I've never been a 'get it' kind of guy," Gates said. "But I get there are other things these people need other than technology."

"If people at that income level get access to a computer we'll give them the software for free because it's a good thing," Gates said, "not because it's a business opportunity."

Conference participant Iqbal Quadir, founder of GrameenPhone, Dhaka, Bangladesh, said the concerns for health and technology are not mutually exclusive:

"Normal people need to be empowered and informed," Quadir said. "If you can create an environment where people have the ability to take care of themselves they will find solutions."

In other words, technology investments can help to cure the diseases. And if sick or poor people have no use for PCs, they will when they recover.

Companies used the conference to announce products and initiatives. America Online Inc. (stock: AOL) introduced an alliance with the Peace Corps, in which it will distribute 70 "peace packs" every year, each with two computers, a digital camera, a printer, and Internet access.

"This is a tremendous opportunity to learn how connectivity can change the most rural community," said AOL chief communications officer Kathy Bushkin. "We will see a lot more of collaboration like this, when companies and nonprofits come together."