Innovation Blog

Throwing Money at Innovation:  Bill Gates Learns a Lesson * 

by Shlomo Maital

 

 

 

   Bill Gates

Five years ago, Bill Gates made an extraordinary announcement.  He invited the world’s top scientists to define the world’s biggest health problems, and then to tackle them, and provided nearly half a billion dollars in five-year grants for 43 proposals (out of a total of 1,500), through the Bill and Melinda Gates Foundation.

  Now, five years later, Gates has brought the grant-receiving scientists together in Seattle to evaluate the results.   Frankly, they are not good.  For instance, the pursuit of vaccines that do not need refrigeration (scarce in poor countries) has failed.

    Says Gates: “On drawing attention to ways that lives might be saved through scientific advances, I’d give us an ‘A’!”  But, he continues, “I thought some [breakthroughs] would be saving lives by now, and it’ll be more like in 10 years from now.”  If then. 

  In some ways, Gates’ medical philanthropy mimics Microsoft’s innovation philosophy.  Microsoft never misses an opportunity to miss an opportunity.  It missed the iPad revolution, and now announces it is coming out with its own version of iPad, using its massive cash reserves to fund expensive “catch-up innovation”.  But throwing money at innovation, large amounts of money, can be self-defeating, because the very existence of money precludes some of the wonderful creativity driven by the very lack of money.   The core paradox here is this:  How do you fund worthy innovation projects, without ruining them with that very funding?  How do you apply former Curitiba Mayor Jaime Lerner’s dictum, which he applied religiously, that if you want innovation, slash two zero’s off the budget?

   Gates is now shifting his strategy.  Like Microsoft, Gates makes mistakes but usually learns from them.  His plan now is to make hundreds of smaller, $100,000 grants.  Mimicking Nature, Gates hopes that a thousand experiments will eventually turn up one or two breakthroughs.

    Of course, we all wish him well and admire his philanthropy.  I wonder if Gates and his foundation might have made better progress and saved hundreds of millions of dollars, had he thought more carefully about the nature of creativity and innovation, and its ambiguous connection with money.

 * based on:  Donald McNeil Jr., “Taking stock of a health quest”, IHT Dec. 21/2010, p.1.