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Bill Gates headlines innovation summit

George Nikitin/TechNet Charles Giancarlo and Netflix

Charles Giancarlo of Cisco, left, said the network will replace the computer as the application platform. Reed Hastings of Netflix, right, also was on the panel, which explored what’s next for information technology.

George Nikitin/TechNet Bill Gates was interviewed Nov. 15 by Charlie Rose at the Technet Innovation Summit

Bill Gates was interviewed Nov. 15 by Charlie Rose at the Technet Innovation Summit. Gates criticized America’s high defense budget, legal costs and medical expenses during the conversation.

BY DAWN LEVY

Will America continue to lead the world in providing information technology, or will China or India more likely produce the next Google or Cisco? And will America show the way in inventing energy technologies, which may rival the Internet in changing the way we live and work?

On Nov. 15 in a packed Memorial Auditorium, business leaders gave their take on the state of American competitiveness in an era of unprecedented globalization during the TechNet Innovation Summit. Co-hosted by Stanford and TechNet, a bipartisan political network of CEOs promoting technology industries, the summit was moderated by journalist Charlie Rose and videotaped for broadcast.

"We particularly have to renew our strengths, where our fantastic universities, like Stanford, are a huge part of why this country does as well as it does, and that's despite the fact that the cost of doing business here is higher than anyplace else," said Microsoft chair and co-founder Bill Gates, whose interview with Rose was broadcast Nov. 23 on The Charlie Rose Show. Gates excoriated America's high defense budget, legal costs and medical expenses but exalted its low unemployment rate and the symbiosis between industry and academia. As the world gets richer—"richer in the meaningful sense of curing cancer, having a malaria vaccine, having more nutrition and educational opportunities for all 6 billion people"—Americans have to get used to the fact that their relative share of power and innovations won't be as disproportionate relative to their 5 percent contribution to world population, Gates said.

"We have to make our education system educate almost everyone, because the only jobs left in a high-cost economy require a much higher level of education than was true when these high schools were designed 10 years ago," he said, citing as a model High Tech High, a San Diego charter school the Gates Foundation has supported. "An equal number of girls [and boys] are interested in math and science because they do it in a more social, project-oriented way and it's not like crossing the desert. You know—learn calculus and somebody will tell you why."

A gain for China or India isn't a loss for the United States, he said. "If those brains are coming to the economy, building great products, inventing new things, the entire world benefits, the same way the world has been an incredible beneficiary of the medical work done here in this country because of the huge [National Institutes of Health] budget."

Rose asked Gates about Microsoft products ranging from the Xbox 360 video game console and Zune digital music player to the Windows Vista operating system and Live.com search engine. But it was clear the world's richest man was more interested in talking about his philanthropy.

Starting in July 2008, Gates will focus primarily on the Bill and Melinda Gates Foundation, which he co-chairs and which aims to improve global health, reduce poverty and increase access to technology in public libraries with its $31.7 billion endowment.

Gates said making a difference in global health "is almost like when the microprocessor came along, where the opportunity is there, but you have to put the pieces together in a different way than has been done before."

Each year, a million children die of malaria and half a million die of rotavirus, which causes diarrhea. In many cases, access to oral rehydration or vaccines would save their lives.

"Most people in the world are in developing countries and are not receiving a significant number of benefits from the advances in technology," Gates said. "Of the last 1,500 medicines that we invented, only 20 have anything to do with the majority of mankind."

Can you hear me now?

In a summit discussion exploring what's next for the field of information technology, Rose spoke with Netflix's Reed Hastings, Yahoo!'s Jerry Yang, National Semiconductor's Brian Halla and Cisco's Charlie Giancarlo. The holy grail is convenient connectivity anytime, anywhere.

Halla envisioned machines talking to other machines in increasingly interconnected networks. Giancarlo said the network will replace the computer as the application platform. Wouldn't it be nice to go to the movies, Halla pondered, and have an announcer say, "Please turn on your cell phones" because the network of theatergoers' phones could form an amplifier? Similarly, cell phones will talk to each other to work on problems of benefit to humanity, the same way distributed computing allows your PC to communicate with thousands of others to study the protein misfolding that underlies some diseases.

For now, technical barriers remain. Battery power limits cell phones, which used to just make calls but now are called upon to take pictures, display video and play music. "And today we're still dealing with dropped calls," Yang pointed out.

While Yang predicted Internet television becoming mainstream and Hastings prophesied millions of channels, Giancarlo noted it would take more than 100 times the existing bandwidth to put video on the Internet. Policies overregulating the telecom industry have hindered American investment in broadband, he said.

Visa restrictions also have hurt innovation by hindering America's access to the world's brightest minds, all agreed. Hastings advocated removing the cap limiting the entry of technically skilled foreign workers. Imagine Sun Microsystems founder Andy Bechtolsheim or Intel founder Andy Grove with "visa denied" stamped on their passports, Halla said.

'Largest economic opportunity of this century'

"Energy is becoming a defining issue of our time as we struggle with questions of how much we use and where we get it," Rose began a panel discussion about green technologies with Scott McNealy of Sun Microsystems, John Doerr of venture capital firm Kleiner Perkins Caufield & Byers, and K. R. Sridhar of Bloom Energy. "Many believe that technology may rival the Internet revolution in its ability to change the way we live and work."

High gas prices, global warming and geopolitical unrest are fueling a search for new solutions. "It's all coming together in a perfect storm," Doerr said. "Green matters to everybody from environmentalists to evangelicals."

Conducting business as usual, with finite energy resources and a growing population, means a lower standard of living, Sridhar warned. "We can't promise our children and grandchildren what all previous generations promised—that they can have a better future."

Doerr suggested changes in national energy policy, including mandatory reductions in carbon dioxide emissions, support for renewables like wind and solar, higher automobile efficiency standards and scaled-up sequestration of carbon generated at power plants.

Corporate responsibility, such as Google's going solar, plays a role in spurring green innovations too, Doerr said. Sun's McNealy said since it takes more energy to move people than electrons and photons, the computer networks his company supports save energy by enabling home shopping, telebanking and other online interactions. Half of Sun's employees work from home on energy-efficient workstations, he noted. Taking an eco-responsible focus "is just good business," McNealy said. "You can make more money because energy does cost money, and there's not a CEO in the world who doesn't understand that."

He described Sun's "Project Blackbox" to put into a shipping container an energy-efficient center capable of storing the data of 10,000 personal computers. "You can ship this to where the energy source is," McNealy explained. "Why not put it in Las Vegas, hook it up to the Hoover Dam and put the cooling-tower coils into Lake Mead, or go up to Calgary where there's cheap energy and cooling is just how much you open the window?"

Doerr praised the $500 million annual investment in green technology of Wal-Mart, the world's largest private consumer of electricity. To control costs, the retail giant now requires its 30,000 supplier chains to use energy-efficient technologies. If suppliers can't afford to invest in green innovations, Wal-Mart will loan them the money.

Such transformations open large marketplaces. Said Doerr: "It could well be the largest economic opportunity of this century."

Surprise visit

Making a surprise visit to conclude the summit was California Gov. Arnold Schwarzenegger, who spoke of efforts to make sure the Golden State still "shines brighter than anyplace else." He noted the state's leadership in environmental protection and stem cell research and its top-ranked university system, and spoke of his recent trade mission trips to Asia and Mexico to keep the world "California's marketplace." The recent passage of $42 billion of bond initiatives to shore up the state's sagging infrastructure and a $200 million investment in broadband to drive telemedicine signal that the state is moving forward, he said.

Still, California and the nation face tough challenges that likely will require nontraditional solutions and politicians who govern and lead rather than bicker. "In California this has happened," Schwarzenegger said. "We're building bridges instead of walls, consensus instead of conflict."