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On 'creative capitalism,' Gates gets it

perspective More people should follow the lead of Microsoft's co-founder in freeing up innovative thinkers to help the developing world, and not just cause it feels good.

Editor's note: CNET News.com editor at large Michael Kanellos and chief political correspondent Declan McCullagh are facing off over Bill Gates' call for businesses to allocate resources that could alleviate problems in the developing world. Click here for McCullagh's take.

perspective If you want to meet someone who's enthusiastic about his job, talk to Don O'Neal.

An engineer, O'Neal is the vice president of Helps International, which has devised an inexpensive, highly efficient wood-burning stove that's distributed to .

A ceramic layer inside the cinderblock stove raises the temperature in the combustion chamber to 1,400 degrees Fahrenheit. At this temperature, nearly all of the wood--and oil from the wood--burns. As a result, the amount of firewood a family needs to survive drops by 70 percent, says O'Neal.

With it, families spend less time foraging for firewood and regional deforestation is slowed. Perhaps more importantly, fewer kids suffer debilitating burns (from traditional floor fire pits) or carbon monoxide poisoning.

And at $120, "it pays for itself in six months," he said. It was one of the best sales pitches I'd heard in years.

The Tech Museum of Innovation recognized Helps, among others, in 2007 for devising interesting, sustainable solutions for the developing world. Proctor & Gamble was recognized for its PUR water purification powder: a 3.5-cent packet of the material can disinfect 10 liters of water. D.R. Mehta showed off a prosthetic foot made out of high-density polyethylene which, at $35, is one-tenth of the cost of ordinary ones. Cambridge University's Helen Lee, meanwhile, exhibited the FirstBurst, an inexpensive urine tester.

When Bill Gates talked about fostering "creative capitalism" at the World Economic Forum in Davos, Switzerland, these are the kind of projects he had in mind. In Gates' vision, private companies should be encouraged to tweak their structure slightly to free up their innovative thinkers to work on solutions to problems in the developing world. It's gung-ho, rather than hairshirt, philanthropy.

"This kind of creative capitalism matches business expertise with needs in the developing world to find markets that are already there, but are untapped," Gates said. "Sometimes market forces fail to make an impact in developing countries not because there's no demand, or even because money is lacking, but because we don't spend enough time studying the needs and requirements of that market."

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While companies or individuals may ultimately profit from this work in developing nations, the reward primarily comes in the form recognition and enjoyment.

So what are the benefits? First and foremost, directing collective talents of North America, Europe, and parts of Asia toward the emerging world could help improve the lives of billions of people mired in dire poverty. It's sounds a bit redundant to mention, but there it is.

But there's also a personal benefit, too. Working on ways to alleviate problems--if the dozens of people I've met who've worked in Africa or Latin America are any indication--is far more rewarding and interesting than six months trying to refresh the marketing campaign for a handheld. Look back at your own life. Chances are, some of your most vivid memories come from brief periods where you found yourself in unusual circumstances tackling something monumental.

And if you want to be completely mercenary, the West isn't going to have a lot of choice. The birthrate in established nations is slowing while it's still rising in the emerging world. Food shortages, global warming, prolonged drought, and economic opportunity are already boosting immigration from North Africa to Europe and Latin America to the U.S. Epidemics, social unrest, and other problems often associated with other parts of the world will come home unless conditions change.

Critics argue that donating funds or freeing up employees to work on charitable projects, even if they one day actually turn a profit, violates corporate charters. Corporations need to maximize shareholder value, which means working on high-margin projects and directing profits to dividends.

The fiduciary duty of corporate officers, however, is quite broad. It does not, and never has, dictated that every spare cent must go toward utilitarian function. (If that were the case, corporate lobbies wouldn't feature artwork and polished reception areas. They'd have orange crates and a bulb hanging from the ceiling.) Free-market absolutists on this point are simply and utterly wrong.

A corporation can give to charity, or free up its employees to work on projects with an altruistic bent, if it helps public relations. Intel gives millions in scholarships. Few of the recipients end up at the company. But by doing so, the chipmaker can foster a tight bond with a major research institution.

Related podcast
News.com's Michael Kanellos and Declan McCullagh
share their differing views.

Creative capitalism can also boost employee morale and loyalty. One of the biggest problems oil companies have faced in recent years has been recruiting. Simply put, oil companies have bad public images and that turns away top grads.

"We will not be able to recruit and retain people if people do not see us as a high integrity industry," Raul Restucci, executive vice president of exploration and production in the Middle East at Shell, said during a conference panel in 2005.

Building leeway and creativity into a job can have huge indirect benefits. And, to focus on the mercenary again, you can't say that these projects won't ultimately prove profitable. After all, how many people 20 years ago believed that the luxury-goods market would be driven by shoppers in Shanghai and Moscow? Fostering relationships now can only help.

Perhaps the toughest roadblock toward acceptance of this kind of system is envy. Deep down, I think most everyone would probably like to work on a project that could make a difference in the lives of others. That is, until you see your college roommate drive by in a Ferrari.

On the other hand, you'll be able to tell him about constructing a subdivision of mud homes in Mali.

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