Vator.tv exclusive: Bill Gates on why market-based innovation doesn't always work

(Editor's note: the best part of this video, which was shot for Vator.tv by Taylor Buley, a graduate journalism student at Stanford University, begins at the 3:09 time mark.  Many thanks to Buley, one of our first campus correspondents, for his submission.)

Microsoft founder and chairman Bill Gates has been raising eyebrows lately by saying that a market-based system is not always the best way to distribute the benefits of technology as widely as possible.

In this speech, given Feb. 19 at Stanford University, Gates expounded on that argument by giving examples of how there are better ways than markets for getting applied technologies to those who need them most.

"If there's not a market need, it doesn't drive innovation to the particular needs of the poorest," who stand to benefit the most from new technologies, said Gates, the world's richest man.

Most of the benefits derived from the proliferation of technology have gone to people in rich countries "who need it the least," he said, adding that the ratio of spending on baldness cures to that spent on malaria cures is 50-to-1, even though malaria kills more than 1 million people annually worldwide.

Gates described a study done in India that looked at which technologies were most beneficial to raising crop yields and thus improving the lot of tens of millions of farmers.

"Most of the abject poor in the world are farmers," Gates said.

Having agricultural extension workers film successful farmers using a DVD recorder, then playing it back for other farmers in their fields, was three times as effective as other educational programs tried, according to Gates, whose  foundation funds health-  and education-improvement projects in poor communities globally.

While there has been a big push in the United Nations to get personal computers to school children in poor countries, in the case of his example, "they don't need a PC. I don't care if it's a 10-cent computer. They're not going to use that... it won't be as helpful," said the man who made his fortune selling computer software.

In this video, Gates also talks about how students from India and Brazil submit more ideas to Microsoft's Imagine Cup contest every year than do U.S. students.

"More than ever, your opportunities are defined more by your level of education than by where you grew up," he said. "If you have access to educational tools, the sky's the limit."