2010 bill gates annual letter

8/14/2019 2010 Bill Gates Annual Letter

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2010 Annual Letter from Bill Gates


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Tis is my second annual letter. Te ocus o this years letter is innovation and how it canmake the dierence between a bleak uture and a bright one.

2009 was the rst year my ull-time work was as co-chair o the oundation, along with Melinda and my dad. Itsbeen an incredible year and I enjoyed having lots o time to meet with the innovators working on some o the worldsmost important problems. I got to go out and talk with people making progress in the eld, ranging rom teachers inNorth Carolina to health workers ghting polio in India to dairy armers in Kenya. Seeing the work rsthand remindsme o how urgent the needs are as well as how challenging it is to get all the right pieces to come together. I love mynew job and eel lucky to get to ocus my time on these problems.

Te global recession hit hard in 2009 and is a huge setback. Te neediest suer the most in a downturn. 2009 startedwith no one knowing how long the nancial crisis would last and how damaging its eects would be. Looking backnow, we can say that the market hit a bottom in March and that in the second hal o the year the economy stoppedshrinking and started to grow again. I talked to Warren Buett, our co-trustee, more than ever this year to try tounderstand what was going on in the economy.

Although the acute nancial crisis is over, the economy is still weak, and the world will spend a lot o years undoingthe damage, which includes lingering unemployment and huge government decits and debts at record levels. Laterin the letter Ill talk more about the eects o these decits on governments oreign aid budgets. Despite the tougheconomy, I am still very optimistic about the progress we can make in the years ahead. A combination o scienticinnovations and great leaders who are working on behal o the worlds poorest people will continue to improve thehuman condition.

One particular highlight rom the year came last summer, when I traveled to India to learn about innovativeprograms they have recently added to their health system. Te health statistics rom northern India are terriblenearly10 percent o children there die beore the age o 5. In response, the Indian government is committed to increasing itsocus and spending on health. On the trip I got to talk to Nitish Kumar, the chie minister o Bihar, one o the pooreststates in India, and hear about some great work he is doing to improve vaccination rates. I also got to meet with RahulGandhi, who is part o a new generation o political leaders ocused on making sure these investments are well spent.

Te oundation is considering unding measurement systems to help improve these programs. Rahul was very rankin saying that right now a lot o the money is not getting to the intended recipients and that it wont be easy to x. Hisopenness was rereshing, since many politicians wont say anything that might discourage a donor rom giving more.He explained how organizing local groups, primarily o women, and making sure they watch over the spending is onetactic he has seen make a big dierence. Te long-term commitment to measuring results and improving the deliverysystems that I heard rom him and other young politicians assured me that health in India will improve substantiallyin the decade ahead.


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From let: Visiting a smallholder dairy arm in Kabiyet (Rit Valley Province, Kenya, 2009); Indian politician Rahul Gandhi speaking in Raipur Phulwari (Uttar Pradesh,India, 2008); cassava research laboratory at the National Crops Resources Research Institute (Namulonge, Uganda, 2009).

Innovation: Te Dierence Between a Bleak Future and a Bright OneIn India, just like everywhere else we work, the needs o the poor are greater than the resources available to help

them solve their problems. It is important to get more money, but that alone will not solve the big problems. Tis iswhy Melinda and I are such big believers in innovations that allow you to do a lot more or the same cost.

During the last two centuries, there have been a huge number o innovations that have undamentally changed thehuman conditionmore than doubling our lie span and giving us cheap energy and more ood. Society underinvestsin innovation in general but particularly in two important areas. One area is innovations that would mostly benetpoor peoplethere is too little investment here because the poor cant generate a market demand. Te second area issectors like education or preventative health services, where there isnt an agreed-upon measure o excellence to tellthe market how to pick the best ideas.

I we project what the world will be like 10 years rom now without innovation in health, education, energy, or ood,the picture is quite bleak. Health costs or the rich will escalate, orcing tough trade-os and keeping the poor stuck inthe bad situation they are in today. In the United States, rising education costs will mean that ewer people will be ableto get a great college education and the public K12 system will still be doing a poor job or the underprivileged. Wewill have to increase the price o energy to reduce consumption, and the poor will suer rom both this higher cost andthe eects o climate change. In ood we will have big shortages because we wont have enough land to eed the worldsgrowing population and support its richer diet.

However, I am optimistic that innovations will allow us to avoid these bleak outcomes. In the United States,advances in online learning and new ways to help teachers improve will make a great education more accessible thanever. With vaccines, drugs, and other improvements, health in poor countries will continue to get better, and peoplewill choose to have smaller amilies. With better seeds, training, and access to markets, armers in poor countries willbe able to grow more ood. Te world will nd clean ways to produce electricity at a lower cost, and more people will

li themselves out o poverty.

Although innovation is unpredictable, there is a lot that governments, private companies, and oundations can doto accelerate it. Rich governments need to spend more on research and development, or instance, and we need bettermeasurement systems in health and education to determine what works.

Melinda and I see our oundations key role as investing in innovations that would not otherwise be unded.Tis draws not only on our backgrounds in technology but also on the oundations size and ability to take a long-term view and take large risks on new approaches. Warren Buett put it well in 2006 when he told us, Dont justgo or sae projects. You can bat a thousand in this game i you want to by doing nothing important. Or youll


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INNOVATION TIME FRAME BENEFICIARY BENEFIT CONSTRAINTS RISK PARTNERS

Pneumonia

and rotavirusvaccinedelivery

30 percent

coverage in5 years, 80percent in10 years

135 million

children borneach year85percent in poorcountries

More than 490,000

lives saved per year;less disability andlower medical costs

Can it be made cheaply enough

or countries to aord it? Willthey have the approval anddelivery systems in place?

Low National public health

delivery systems; the GAVIAlliance; UNICEF; WHO;vaccine companies

Invention o avery eectivemalariavaccine

815 years 600 millionpeople living inhighly endemiccountries inArica

Prevent 207 millionmalaria cases and770,000 deaths inArica each year;much greaterproductivity and lowermedical costs

Is it possible to make a highlyeective vaccine? I so, can it bemade cheaply enough? Can it bedelivered?

High Malaria Vaccine Initiative;nonprot researchers;drug companies; the U.S.National Institutes oHealth (NIH)

Invention o apill or gel toreduce the risko getting HIV

37 years 150 millionpeople at highrisk o gettingHIV

60 percent reductionin HIV incidence in thegroups that use it

Will it be eective? Will it becheap? How quickly can it beapproved? Will countries adoptit? Will people use it requently?

Medium NIH; nonprots; drugcompanies

Inventiono a moreproductivecorn seed thatcan toleratedroughts

610 years 4 to 8 millionarmingamilies

24 to 35 percentincrease in ood to eatand sell, even duringdrought periods

Will regulatory agencies approveit? Will seed companies be ableto make it cheaply enough? Willcountries accept geneticallymodied seeds? Will armers usethem?

Medium Seed companies; nonprotresearch centers; Aricancrop scientists and policyexperts

Financial toolsto make it easyor poor peopleto save money

35 years 50 million poorhouseholds

Less hardship intough times and moremoney to invest

How can transaction costs below enough or small amounts?Can shops or mobile phonesreplace visits to bank branches?

Medium Financial regulators;banks; mobile operators;retail chains

Sanitationsystems asgood as fushtoilets withoutneeding sewers

510 years Poor peopleworldwide

30 percent reductionin diarrhea inchildren; better livingconditions

How much will they cost to makeand to maintain? Will peoplereally want to use them?

Medium Scientists; universities

Measureo teachereectivenessand systemsor helpingteachersimprove

1015 years 3 millionteachers and27 millionless-privilegedstudents in theUnited States

800,000 more highlyeective teachers; 63percent increase inwell-qualied less-privileged high schoolgraduates (500,000more per year)

Will teachers, including theirunions, schools, districts, andstates, be willing to change? Willbudget cuts slow the work?

High U.S. Department oEducation; schooldistricts; charter schools;teacher groups

Great onlinecourses withvideo andinteractivelearning

10 percent in3 years and80 percentin 8 years

Studentsand teachersworldwide

Teachers learningrom the best andassigning pieces tostudents as well asindependent studentsusing the material ontheir own

How appealing are the courses?Can they be integrated withtraditional schooling?

Medium Great teachers; sotwarepartners; onlinecommunity

All librarieshaving PCswith Internetconnectionsand thetraining to usethem

U.S. installationproject was19972006;now ocusedon maintainingaccess

People withoutInternet PCsat home

49,000 computersinstalled to provideInternet access or2027 million people

Will local communities sustainunding or keeping librariesopen, maintaining connectivity,and rereshing hardware?

Low Libraries; librarians;library supporters; localgovernments; telecomcompanies

Innovation Chart: Examples o ideas the oundation is unding

GLOBAL HEALTH PROGRAM

GLOBAL DEVELOPMENT PROGRAM

UNITED STATES PROGRAM


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bat something less than that i you take on the really tough problems. We are backing innovations in education,ood, and health as well as some related areas like savings or the poor. Later in the letter I talk about why we dontcurrently see a role or the oundation in energy.

We have a ramework or deciding which innovations we get behind. A key criterion or us is that once the innovationis proven, the cost o maintaining it needs to be much lower than the benet, so that individuals or governments willwant to keep it going when we are no longer involved. Many things we could und dont meet this requirement, so westay away rom them. Another consideration or us is the ability to nd partners with excellent teams o people whowill benet rom signicant resources over a period o 5 to 15 years.

Our ramework involves unding a range o ideas with dierent levels o risk that they could ail. Te ones withlow risk are where the innovation has been proven at a small scale and the challenge is to scale up the delivery. High-risk innovations require the invention o new tools. Some are at the rontiers o science, such as nding a new drugand running a large trial to see how well it works. Other high-risk eorts involve changing social practices, such aspersuading men at risk o getting HIV to get circumcised.

It is critical that we understand in advance what might prevent an innovation rom succeeding at scale. For work

in developing countries, the lack o skilled workers or electricity might be a key constraint. For work with teachers,we need an approach to measuring their eectiveness that they will welcome as a chance to improve rather thanreject because they think its more overhead or ear that it might be capricious. Even with the best eorts to makesure we understand the challenges, we need intermediate milestones so we can look at what we have learned aboutthe technology or the delivery constraints and either adjust the design or decide that the project should end. We areocused on strong measurement systems and sharing our results where we have successes but also where we haveailures. Innovation proceeds more rapidly when dierent parties can build on each others work and avoid goingdown the same dead end that others have gone down.

o provide some examples, in the chart on page three I show nine innovations we are investing in, broken intosections or each o the oundations three divisions. Overall we have about 30 innovations we are backing. Althoughthe chart includes only one new vaccine and one new seed, we are unding vaccines or several diseases (malaria,AIDS, tuberculosis, etc.) and new seeds or many crops (corn, rice, wheat, sorghum, etc.). For each innovation I show

the time rame, beneciaries, and constraints. A ew things we do, like disaster relie and scholarships, do not t thismodel, but over 90 percent o our work does.

Childhood DeathsTe improved health o children in poor countries is a great example

o the power o innovation. In 2008, or the rst time ewer than9 million children under age 5 died. In 2005, the last time the numberwas measured careully, it was just below 10 million. Tis is hugeprogress, and it is due to improvements like increased vaccinations and

better malaria treatment and prevention.

Te pie chart to the right shows the primary causes o these deaths.Notice that all deaths or children under 30 days o age are groupedinto a single category called neonatal. Because the world is making

very little progress in reducing these deaths, but is making progress inreducing deaths rom other causes, the percentage o neonatal deathshas grown to account or more than 40 percent o all deaths in childrenunder 5. I we make the progress we expect in preventing deaths rom

Other

19%

5%42%5%

10%

Measles1%AIDS2%

Malaria8%

Diarrhea(rotavirus)

Diarrhea(non-rotavirus)

Neonatal

Pneumonia(pneumococcus)

Pneumonia(non-pneumococcus)

8%

Causes o Death or Children Under Age 5

Preliminary estimates by the Child Health Epidemiology ReerenceGroup o WHO and UNICEF.

Total under-5 deathsin 2008 = 8.8 million


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other causes, and still make no progress in preventing neonatal deaths, they will soon represent 60 percent o all deathsor children under 5.

Most charts showing childhood deaths dont group all o the neonatal causes together. Tey are broken out intocategories like birth asphyxia, pre-term births, or neonatal inection. Tis is partly because the eld o childrenshealth used to be very siloed. Te nutrition experts, or example, didnt talk to the pre-term birth experts. But this ischanging. In the past decade, public health experts have realized that having separate groups ocused on each o theseis not the best way to improve the situation. Now leaders in global health are talking about how all these problemsare connected, and they are seeing the need to ocus on these deaths in an integrated way that includes interventionsto reduce mothers deaths and improve voluntary amily planning. Te oundations strategy has evolved in the sameway. Over the past our years we unded several pilot projects and built a strong team to lead this work. Te pilotsshowed that the right integrated approach made a huge dierence. It involved educating the mothers and the birthattendants as well as giving them some new tools such as easy-to-use antibiotics. Based on some o the early successwere seeing, we are now increasing our investment to see i we can scale up these approaches.

Melinda has a particular interest in this area and has several trips planned or 2010 to see these projects. Our working

partnership makes it very comortable or one o us to ocus more intently on a particular area but always share whatis being learned so we can work together in guring out how it should t into the overall strategy. Ive always had astrong partner in the work I have done. In the early days o Microso it was Paul Allen, and in the later days it wasSteve Ballmer. Although some people dont need this kind o partnership, I have ound that only when I have a partnerwho knows my strengths and weaknesses can we together have the condence to take on projects that take a long timeand are high risk. When one o us is being overly pessimistic or optimistic, the other can provide a balanced view.

In the next ew sections o the letter, Ill write about how innovation can help the world make progress on the othercauses o childhood deaths.

Mother with her one-month-old girl in the village o Rampur Ashu (Uttar Pradesh, India, 2007).


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Te Miracle o VaccinesVaccines are a miracle because with three doses, mostly given in the rst two years o lie, you can prevent deadly

diseases or an entire lietime. Because the impact is so incredible, vaccines are the oundations biggest area oinvestmentmore than $800 million every yearand the return is substantial. We are working to get other donorsto put more resources into vaccines because we still have big challenges. Te rst challenge is to invent them, and thesecond is to make sure they reach everyone who needs them. Achieving ull coverage is hard in poor countries, wherecost and delivery are big barriers.

Various innovations can simpliy the delivery. Sometimes its possible to combine dierent vaccines into one.A great example o this is the vaccines or diphtheria, tetanus, and pertussis (whooping cough). Tey were rstintroduced in the 1920s. In 1942 they were combined into a single vaccine, called a trivalent vaccine because it hasthree active elements. Te price o all three doses o this vaccine is now less than 50 cents, and over 77 percent ochildren in the poorest countries o the world get all three o the doses they need to be protected. Since the trivalent

vaccine was introduced in developing countries, tetanus deaths are down nearly 88 percent and pertussis deaths aredown 70 percent. Almost all deaths rom the three diseases would be stopped altogether i vaccine coverage wereimproved to 95 percent everywhere.

Even when a vaccine cant be combined with others, you can still improve distribution by making it ree or poorcountries, or cheap enough that they can aord to buy it. Tis has been a key ocus or the GAVI Alliance, which wehelped create almost 10 years ago. GAVI gives grants to poor countries to improve vaccine coverage and to help payor new vaccines. GAVI has worked to get two new vaccines into widespread use since it was started. One preventshepatitis B, an inection that eventually causes liver cancer in adults and kills over 600,000 people per year. Te otherprevents HiB (or Haemophilus infuenzae type B), a type o bacteria that causes meningitis and other lie-threateningproblems during childhood. By the end o 2008, 192 million children had received the hepatitis B vaccine and41.8 million children were protected against HiB.

Now the hepatitis B and HiB vaccines have been combined with the trivalent vaccine to create a vaccine with veactive elementsa pentavalent vaccine. GAVIs work in helping to provide both the stand alone and pentavalent

vaccines has raised hepatitis B coverage to 68 percent o newborns and HiB coverage to 24 percent o newborns in the

poorest countries.

From let: Francis Prez Meja receiving her third and nal dose o rotavirus vaccine (Pantasma, Nicaragua, 2009); a technician conrming that rotavirus vaccine hasremained cool during transport and is sae to use (Pantasma, Nicaragua, 2009).


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Cost is still a problem. oday a ull set o doses o the pentavalent vaccine costs over $8 more than the trivalent vaccine. But as manuacturers produce more vaccine and additional competitors come into the market, the costpremium should drop by hal in the years ahead. Tis is why the global health community has a goal o raising coverage

o HiB vaccine to over 80 percent by 2015, which could then save 250,000 lives per year in the poorest countries inaddition to eliminating lots o suering and disability.

With the progress on these vaccines, GAVI will add a ocus on two vaccines that are already being used in richcountries: one or rotavirus, which causes diarrhea, and another or pneumococcus, which causes pneumonia. Youcan see in the childhood death chart what a large impact these new vaccines can have i widely used. Rotavirus vaccinecould save 225,000 to 325,000 lives per year, and pneumococcal vaccine could save 265,000 to 400,000 lives per year.

In last years letter, I said that I thought we could get the rotavirus vaccine out to over hal o the kids who need itwithin six years. I still think we can achieve this in the ve years we have le, but it is going to be a lot harder thanI expected. Many countries have not added a new vaccine or over 20 years. Incredibly, some countries dont evenhave a process or deciding whether to add a new vaccine. In others, the process is still there on paper, but no oneremembers who is supposed to do what. We avoided this problem with HiB and hepatitis B by creating the pentavalent

vaccine, but it wont be possible to combine rotavirus and pneumococcus with other vaccines. In addition, countriesunderstandably hesitate to add an expensive new vaccine until they have specic proo o the disease burden in theircountry. Sometimes they accept data rom similar countries, but sometimes they dont.

Tis year the oundation helped launch a new approach to encourage a high-volume, low-cost supply o a pneumococcusvaccine that meets the needs o poor countries. Tis approach is called an Advance Market Commitment, and it involvesa group o donors pledging $1.5 billion to help pay or the vaccine or poor countries. We expect that manuacturers willcommit to building actories much earlier than they would otherwise in order to compete or this money. During 2010the negotiations with manuacturers should come to a conclusion. We believe this will make a big dierence in howquickly this vaccine gets to poor children and show how this approach can be applied to other medicines.

Malariawo years ago, Melinda and I challenged the health eld to set a goal o eventually eradicating malaria. Because it is

such a widespread disease, the oundation has backed a number o dierent types o innovations. In 2005 we helpedund a medium-risk pilot project in Zambia to test having most people in an area sleep under insecticide-treatedbed nets and spray the inside o their house with insecticides. Tese interventions have proven to reduce malaria

Mother and child resting under an insecticide-treated bed net (Chongwe District, Zambia, 2009).


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substantially, and other partners have now taken the lead on the large-scale delivery o these interventions. Tere hasbeen a dramatic increase in bed net usage thanks to donations rom individuals (some through church organizationsand Nothing But Nets), the Global Fund, and rich governments. Te countries that have had these interventions inwide-scale use or several years are seeing large reductions in malaria deaths: Rwanda has seen a 45 percent decline,Zambia 50 percent, Cambodia 50 percent, Eritrea 80 percent. Tese interventions are being scaled up rapidly, whichwill have a big impact.

But malaria is a particularly tricky disease. Te current tools alone will not be enough to eradicate it, so we areunding new medium- and high-risk innovations. For example, we are unding the invention o new insecticides oruse on bed nets, because some mosquitoes are developing resistance to the current one. And because bed nets arentaccepted in some locations, we are also investing in new ways o delivering insecticide in a houseperhaps usingcandles or chemical sticks. We are also investing in cheaper ways to make the drugs we already have, as well as newdrugs because we know the parasite will develop resistance to the current treatments.

Finally, to eradicate the disease, we will almost certainly need a malaria vaccine, which is the highest-risk malariawork we und. Te key here is that researchers are pursuing a lot o dierent ideas, so that i one ails, there are stillseveral other options. One partially eective vaccine candidate, known as RS,S, has started its Phase III trial, whichis an important step. Other vaccine approaches are at an earlier stage and they also look very promising. Scientistsare combining some o these other vaccine eorts with RS,S to raise its eectiveness and duration, an approach thatcould lead to a highly efcacious vaccine in 8 to 15 years.

Polio EradicationPolio is down to ewer than 3,000 cases a yeara 99 percent reduction in 20 yearsbut getting rid o the last 1 percent

is the hardest part o eradicating a disease. When we increased our investment in polio two years ago, we viewed it as achallenging delivery problem rather than something requiring a new tool, because the oral vaccine worked quite well.Most o our unding has supported innovative approaches to delivery. But when we saw that in some places the oral

vaccine wasnt totally eective, we also unded the creation o new orms o the vaccine, which are targeted at subsets othe three dierent varieties o polio virus. Tis is a good example o needing to stay open-minded about the best approachto solving a problem, because the new orms o the vaccine have been critical in the progress that has been made this year.

From let: Administering polio drops to a child during a visit to a Bini health clinic (Sokoto, Nigeria, 2009); woman delivering vaccines house-to-house on ImmunizationPlus Day (Sokoto, Nigeria, 2009).


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In last years letter I mentioned that there are our countries that account or most o the remaining cases. One wasNigeria, particularly in its northern states, where polio has been especially problematic. In 2009, thanks to new moneyand political support rom some state, local, and traditional leaders, they were able to vaccinate more children in most

states. Tis led to a 50 percent decline in the overall number o cases and a 90 percent decline in the most virulentstrain. In 2010, they will need to get the vaccination rate up in every state.

Te three other countriesIndia, Aghanistan, and Pakistanshrunk the geographical areas aected bythe virus. Some o the toughest remaining areas are the ones where the security situation is bad, like parts oAghanistan and Pakistan.

When outbreaks did occur, countries responded aster and more eectively than they had beore. Last year, poliovirusrom Nigeria and India spread to more than 15 Arican countries that had been considered polio-ree. But because manycountries had begun using better laboratory techniques, they identied the virus quickly and started immunizationcampaigns right away, which limited the spread o the outbreak. Still, we havent gotten these countries back to zerocases yet, especially in west Arica and Chad, where the outbreak is still widespread. I will be traveling to some o thesecountries to meet with health leaders, and I expect Ill be able to report even more progress in next years letter.

HIV/AIDSTere is some encouraging news here. HIV isnt spreading as ast as it was. Te number o new people getting

inected with the virus peaked in 1996 at 3.5 million and was down to 2.7 million in 2008. Prevention eorts, like theoundations work in India to get sex workers and their clients to use condoms more oen, are part o the reason orthis reduction. But 2.7 million is still 2.7 million too many, and in some places, the disease rate is still incredibly high.In South Arica, 18 percent o adults are inected, and in parts o the country more than hal o the women are inectedby the time they are in their mid-20s.

Te number o people worldwide receiving antiretroviral (ARV) therapy or HIV increased to 4 million last year,

which is a great achievement. In the early years o AIDS, it was not clear whether a large-scale treatment eort wouldwork in Arica. Beginning in 2001, the oundation helped und treatment in Botswana, one o several projects showingthat it could work. Te Global Fund and the United States PEPFAR program (a $50 billion program to help combatAIDS in Arica) have since taken the lead in scaling up ARV delivery. Tey are both doing a great job, although thereis a lot o concern that limited unding will restrict the number o new patients they can treat.

From let: Patient undergoing a circumcision operation (Lusaka, Zambia, 2009); circumcision patients at the YMCA New Start Clinic (Lusaka, Zambia, 2009).


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reatment is important, but we urgently need innovations to prevent the spread o HIV, which is where theoundation has ocused a lot o its eorts. rials are in progress on pills and gels that we hope will substantially reducethe chance o getting inected. We will begin to see the results rom these trials late this year.

Another approach to reduce the spread o HIV is male circumcision. I mentioned in last years letter that studieshave shown that male circumcision reduces the odds o transmission rom a woman to a man by over 60 percent. Inareas where transmission is widespread, i you circumcise most o the men over 14 years old you can signicantlyreduce the spread o HIV. Te oundation unded pilot eorts to scale up circumcision, but I viewed it as high-riskbecause I was doubtul that enough men would volunteer to be circumcised. Tat is why last December I went to visitBertran Auvert, a French scientist working in a South Arican township called Orange Farm. Bertran conducted one othe key studies on the eectiveness o circumcision, and now he has set out to show that doubters like me are wrong.

He and his co-leader, Dirk aljaard, are modest about their work but, amazingly, they are getting over 750 mena month to come to their acility. Tey have already circumcised 14,000 men, and within a year they think they willbe able to circumcise almost all o the men in the community. It looks like a very high percentage will participate.Bertrans approach is very efcient, with costs o only $40 or the surgery. Based on this success, a number o acilitiesare being set up in South Arica and in other countries with high HIV prevalence to do the same thing. In manyArican countries, i a high percentage o men volunteer or circumcision, it will reduce the number o cases at least 30percent over time, which shows what an impact a great scientist like Bertran can have.

Te major news in AIDS this year, which you may have read about, concerned an HIV vaccine. A trial done inTailand reported its results in September. Te oundations biggest spending on AIDS ocuses on vaccine work, butwe didnt und this trial. Although there are several ways o analyzing the data and the vaccine had only modest eects,the results o the trial were good news. Tey showed the scientic community that a vaccine is possible.

Te AIDS community is working on a number o candidate vaccines, many o which show better results in tests onmonkeys than the vaccine used in the Tai trial. Since only a ew vaccines can be picked or a trial, the community willhave to collaborate and gure out which ones should go orward. Although a vaccine or widespread use is still morethan a decade away, the scientic progress this year was better than most people expected.

Helping eachers ImproveTe oundation works on health in poor countries because we think its the best way to improve lives globally. In

the United States, we believe the best way to improve lives is to improve public education. Americas education systemhas been undamental to its success as a nation. But the way we prepare students has barely changed in 100 years. Iwe dont start innovating in education to make it better and more accessible, we wont ulll our commitment to equalopportunity, and our competitiveness will all behind that o other countries.

In last years letter I wrote about the evidence that helping teachers teach more eectively is the best way to improvehigh schools. It is incredible how much the top quartile o teachers can improve the skills o even students who arequite ar behind. Tis was a new eort or us at the time, so in 2009 I spent a lot o time trying to understand moreabout teaching: How do you identiy the best teachers? How can they help other teachers be as good as they are? Whatinvestments are made to raise the average quality o teaching?

It is amazing how little eedback teachers get to help them improve, especially when you think about how mucheedback their students get. Students regularly have their skills measured with tests. Te results show how they compareto other students. Students know how to improve because they see where they did well and where they didnt. Tey cantalk to other students and learn rom those who mastered the material.

Students get more eedback on their work than people in most jobs. One job where the worker is provided almost noeedback is the teacher at the ront o the class. In a teachers personnel le there is rarely anything specic about where the


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teacher is strong or weak. Oen there is just a checklist o basic things like showing up on time and keeping the classroomclean. In places where there is a rating system at all, 99 percent o teachers are rated satisactory. Although this personnelsystem has the benet o low overhead and predictability, it doesnt help identiy best practices and drive improvement.

Te alternative is a system where time and money are invested in evaluation with the goal o helping teachers improve.Making this work requires both resources and trust. A new system needs to be predictable and help teachers identiyweaknesses and give them ways to improve, and it should not make capable teachers araid o capricious results.

A key point o contention about an evaluation system is how much it will identiy teachers who are not good anddont improve. A better system should certainly identiy the small minority who dont belong in teaching, but its keybenet is that it will help most teachers improve.

A new system requires more than just taking the test scores o the students and seeing how they improve aer a yearwith a teacher. It also involves things like eedback rom students, parents, and peer teachers and an investment o timein reviewing actual teaching. ools like video can be used so that a teacher can send peers a video showing him tryingto do something hard, like keeping a class ocused, and ask or advice. Instead o people coming into the classroom,which is quite invasive, a webcam can be used to gather samples or evaluation.

o help develop an evaluation system to improve teacher eectiveness, in November we committed $335 million topartnerships in Memphis, ennessee; Hillsborough County, Florida; Pittsburgh; and Los Angeles. Te involvementand support o the union representatives in each o these locations was a key part o their selection.

Tis is an instance where there isnt a clean separation between the creation o the innovationways to evaluateteachers and help them improveand the delivery o the innovation, which requires teachers to embrace a changeto the personnel system. We are working on both at the same time. eachers will be evaluated and given incentivepay based on excellence. I most o the teachers in these locations like the new approach and they share their positiveexperience, then these evaluation practices will spread. Te goal is or them to become standard practice nationwide.Te benets o this would be unbelievably large, which is why we are pursuing it even though we know there is a highrisk that it could ail. Previous eorts along these lines seemed to thrive or a ew years, but i the system is not well runor i teachers reject dierentiation, it gets shut down.

Te lmmaker Davis Guggenheim, who directedAn Inconvenient ruth, has a new documentary about Americaneducation coming out this year. Waiting or Superman tells the story o several kids trying to get into schools withhigh-quality teachingits literally a lottery that will decide the ate o these young people. Although I may be biased

From let: Visiting an Algebra I class at West Charlotte High School with Melinda (Charlotte, North Carolina, 2009); Living Environment science class at the UrbanAssembly Academy o Government and Law (New York, New York, 2008).


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because I appear in the movie, I think it is antastic and hope it will galvanize a lot more political will to improveteaching eectiveness.

Melinda and I visited a number o schools in North Carolina during the all and had a chance to see some amazingprincipals and teachers. In one inner-city Charlotte school, teachers look at test results each week to understand whois teaching which concepts the best way so they can learn rom each other. In Durham, we visited a special high schoolcalled the Perormance Learning Center, which is or kids who have dropped out o a typical public school but want toget their high school degree. One reason we visited them was to see how they use online learning. Tere are no lectures,and kids can move ahead at their own pace. A lot o the kids start out making progress more slowly than they wouldin a traditional class, but with the support o the teachers in the school and as they get used to the online approach,almost all o them move through the courses a lot aster than normal classes would let them. Tis is very motivationalto the kids because they can do more than a years worth o schoolwork in a single year.

Online LearningTe oundation has made a ew grants to drive online learning, but we are just at the start o this work. So ar

technology has hardly changed ormal education at all. But a lot o people, including me, think this is the next placewhere the Internet will surprise people in how it can improve thingsespecially in combination with ace-to-acelearning. With the escalating costs o education, an advance here would be very timely.

Most o us have had a teacher whose lectures made a subject seem ascinating even though we didnt expect that itwould be. I you are going to take the time to listen to a lecture, you should hear it rom the very best. Now that ndingand watching videos is a standard part o the Internet experience, we can put great teachers lectures online.

A number o universities are already putting lectures online or ree. You can nd a lot o these courses at sites likewww.academicearth.org. I particularly like the physics courses by Walter Lewin and the solid-state chemistry courseby Donald Sadoway, both rom MI. When I want to learn a new concept like the Carnot limit on getting usable energyout o heat, I oen will watch lectures rom dierent courses to see how it is explained and test my understanding.

But online learning can be more than lectures. Another element involves presenting inormation in an interactiveorm, which can be used to nd out what a student knows and doesnt know. Tis makes it possible to tailor thelearning session to the individual student. Tink about what happens to students who get into community collegebut are told to take remedial math because their test scores are below a cuto level. Te students have to spend time

From let: Student at the Durham Perormance Learning Center, Durham Public Schools (Durham, North Carolina, 2009); speaking with Danny Gilort, principal o theDurham Perormance Learning Center (Durham, North Carolina, 2009).


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page thirteen

on the things they already know and dont get to ocus on the areas they are conused about. Tey get very littlepositive reinorcement rom sitting in lectures. Most kids who are put into remedial math drop out beore they everget a degree because it is such a discouraging experience or them. On the other hand, the online system can quickly

diagnose what the students know, provide positive eedback, and make sure their time is spent really improving theconceptual areas where they are weak.

We need to bring together the video and interactive pieces or K12 and college courses. We should ocus on havingat least one great course online or each subject rather than lots o mediocre courses. Once we have this material inplace, it can be used in many dierent ways. A teacher can watch and learn how to make a subject more interesting.A teacher can assign subsets o the material to students who are behind and nding something difcult. A teachercan suggest online material to a student who is ahead and wants to learn more. A teacher can assign an interactivesession to diagnose where a student is weak and make sure they get practice on the areas that are difcult or them.Sel-motivated students can take entire courses on their own. I they want to prove they learned the material to helpqualiy or a job, a trusted accreditation service independent rom any school should be able to veriy their abilities.

Tere is a lot o online material being developed, but it isnt organized in a way where it is easy to nd the bestmaterial that ts what you want to do. I you search online or a video on photosynthesis, you get tens o thousandso results, including a lot o student projects. Which one is best or teaching kids o dierent ages and dierent pre-existing knowledge? We need a simple way o taking all o the education pieces and organizing them and then ratingthem in context.

One step that would help is having course standards that break down all o the various things to be learned intoa clear ramework and connecting the online material to this ramework. Over time I think a large community ocontributors and reviewers will develop and allow the online material to be easy to access and a crucial resource orall types o education. Tere will need to be a number o pilots to see how to take this resource and blend it into theclassroom experience. I plan to spend a lot o time on this to see what would help get it to critical mass.

Tere is a question o how much o the online material will be ree and how much will be paid or. Some o the bestinteractive soware or K8 learning is being done by startups using interactivity in innovative ways. Tese companiesare licensing the soware on a per-classroom and/or per-student basis. Ideally we would get market orces and

nonprot work to complement each other, but given that schools budget very little or soware, it isnt clear whetherthe marketplace will be large enough or the or-prot model to make a large contribution.

AgricultureIn the past ew years, the oundation has begun to invest heavily in innovations that can increase agricultural

productivity or the worlds poor. More than 1 billion people suer rom chronic hunger, and most o them are smallarmers. We need to raise their productivity so that they have extra output, which can be saved or lean years, or soldso they can have money to send their kids to school. We will also need to eed the additional 3 billion people who willpopulate the earth in the next 50 years. People involved in agriculture care about both improving arm productivity and

making sure arming is done in a sustainable way. Although these needs are oen seen as mutually exclusive, they areactually quite complementary. Tey both depend on innovation, including new seeds, better training or armers, andbetter access to inputs and markets. Some o the recent successul innovations in agriculture are documented in a bookcalledMillions Fed, which you can download at www.ifpri.org/publication/millions-fed.

o make better seeds, scientists nd two seeds, each with attractive characteristicslike being adapted to a localenvironment or having better productivity or disease resistanceand make one seed that combines the good traits.Breeding to get better seeds has been going on or thousands o years. When you see the original teosinte corn plantthat is the ather o todays corn, it is hard to believe the two are related. But the change is due entirely to breedingcontrolled by humans.


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Tere are three things that modern agrotechnology brings to this seed improvement process. Te rst is simply theability to gather plant samples rom all over the world and use databases to keep track o thousands o plants grownunder dierent conditions. Tis has accelerated the progress in conventional breeding. Te second is the ability to

genetically sequence plants, just like we do with humans. We have some understanding o which parts o the genescontrol which characteristics, so when we cross two seeds we can look at the gene sequence o the resulting seed andknow whether it has the characteristics we want. Tis is called marker-assisted breeding and it dramatically speedsup the cross-breeding process, because researchers dont have to wait or the seed to grow beore they know whethertheyve succeeded. Te nal technique is transgenics, where instead o just allowing cross-breeding to create the newseed genome, you actually take a gene and insert it. Tis is the approach that is still controversial or some people. Butwith the proper saety reviews, this technique can help create disease-resistant and drought-tolerant crops that couldnot be created any other way, protecting billions o dollars o harvest and increasing the ood supply by millions otons each year.

Tese modern techniques have been applied most aggressively to the big cash crops in rich countries. Just like inhealth, there isnt a lot o market incentive to use the latest science or the needs o the poor. Te oundations approachis to und projects ocused on the specic growing conditions in developing countries and the crops that are grown by

poor armers. Most o our grants involve marker-assisted breeding, but a ew involve transgenics.

In December I visited the BECA Laboratory in Nairobi, Kenya, which is headed by a scientist named SegenetKelemu. Teir laboratory is doing state-o-the-art marker-assisted breeding to improve sorghum, cassava, and cornso the crops yield more ood and resist pests, drought, and diseases. Segenet grew up in Ethiopia, moved away orgraduate school, and worked in other countries or 25 years. But she chose to come back to Arica in 2007 to helpdevelop a generation o plant scientists working to end Aricas ood insecurity. I was very impressed with the teamsshe has put together and the work they are doing with plant breeders throughout Arica. For products like sorghum,even when they can tell that a seed has all the right characteristics, they still have to develop varieties that also matchlocal tastes, since unlike corn or wheat in rich countries there isnt one standard orm that everyone preers.

Te picture below shows you what a dramatic dierence this kind o work can make. On the le you see sorghumthat has been attacked byStriga, a devastating parasitic plant. On the right you see high-yield sorghum that has genesto prevent Striga rom attacking. Te dierence to a small armer between having the old seed and the new seed is thedierence between starving and thriving.

A high-yield, Striga-resistant variety o sorghum (right) growing alongside a nonresistant variety inested with Striga (purple-fowered plants) (Fedis, Ethiopia, 2006).


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page feen

Rich Countries Aid GenerosityImprovements in agriculture and health have relied heavily on the generosity o rich countries. But this generosityrepresents a much smaller portion o oreign aid than many people realize. Aid or health rose rom $5.6 billion in1990 to $21.8 billion in 2007, which was less than 14 percent o all oreign aid rom rich countries that year. Tis moneywas incredibly well spentsaving a lie or ar less than a tenth o what is spent to save a lie in rich countries.

In total, oreign aid rom the richest countries in 2008 was$121 billion. Specic data is available at stats.oecd.org/qwids,and its something I watch closely because the generosity othese governments is key to long-term success.

Because o budget decits, there is signicant risk thataid budgets will either be cut or not increase much. In the

table on the le, I show some countries budget decitsas a percentage o gross domestic product (or GDP, ameasure o the overall size o the economy). Many o thesepercentages represent unprecedented peacetime decits.

Te public may not prioritize keeping oreign aid at highlevels because so many o them have not heard how eectiveit is. Some ormed their image o oreign aid during theCold War, when money was sent to buy the allegiance oa dictator with very little control to make sure it was well

spent. We need to get the successes to be ar more visible than they are today. Te organization ONE is a key partner inhelping with this, and they have Bonos brilliance as well as a strong sta. In October Melinda and I did a presentationwe called LIVING PROOF: Why We Are Impatient Optimists to show how well government investments in health

are working. You can watch it at www.livingproofproject.org. Tis version was ocused on U.S. giving, but the messageis even more appropriate or the rich countries that are even more generous than the United States.

Te best way to measure aid generosity is to look at it as a percentage o GDP. Te most generous countriesDenmark, the Netherlands, Norway, Sweden, and Luxembourggive 0.72 to 1 percent o GDP to oreign aid, whichis phenomenal. Most other European donors give between 0.3 and 0.5 percent, and a majority have committed to getto 0.51 percent by 2010. France has traditionally been the strongest giver o this group, but in the mid-2000s their aidactually decreased a bit. Germany, Spain, and the United Kingdom have all made signicant increases over the last ewyears and are now close to or ahead o France. Italy was at the low end o European givers even beore the Berlusconigovernment came in and cut the aid by over hal, making them uniquely stingy among European donors. Tese cuts

COUNTRY 2008 2009

Canada -0.1 4.9

France 3.4 7.0

Germany 0.1 4.2

Italy 2.7 5.6

Japan 5.8 10.5

United Kingdom 5.1 11.6

United States 5.9 12.5

Government Defcit as a Percentage o GDP

Shaded gures are orecastsSource: IMF World Economic Outlook, October, 2009.

Giving the LIVING PROOF: Why We Are Impatient Optimists talk with Melinda at Sidney Harman Hall (Washington, D.C., 2009).


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will show up in Italys 2009 aid gures. Bob Geldo put it well when he said the Italian government is suggesting theywant to balance their budget on the backs o the poorhow shameul. In June, I met with Prime Minister Berlusconipersonally to make the case or more support, but I was unsuccessul. Tis is a huge disappointment since I still thinkthe Italian public wants to be as generous as people in other countries.

Canada and Australia are signicant givers, at about 0.32 and 0.29 percent, respectively. Japan used to be a generousgiver and has made some strong promises, but they are down at 0.20 percent. Unless the new government changesthings or the better, they will all short o their commitments.

Tere has been an eort to get Russia, China, and the rich oil countries to do substantial giving, but so ar the numbershave been modest. South Korea, however, has become a signicant giver, providing over $800 million last year, which is0.09 percent o its GDP, with a commitment to increase to 0.25 percent by 2015.

Te United States is the biggest giver in absolute terms, but in percentage terms gives only 0.19 percent. In recentyears, a signicant portion o this assistance went to reconstruction in Iraq, Aghanistan, and Pakistan. I Congresspasses President Obamas proposal to double giving, however, the United States will get up into a very respectable range.

Decits are not the only reason that aid budgets might change. Governments will also be increasing the money theyspend to help reduce global warming. Te nal communiqu o the Copenhagen Summit, held last December, talks

Net Aid as a Percentage o Gross Domestic Product (2008)

Based on aid numbers and GDP in current U.S. dollars, as reported by the OECD.

UN Target 0.7

Average Country Contribution 0.45

0.99

0.88

0.820.80

0.72

0.500.48

0.43 0.43 0.43 0.42 0.42

0.38 0.38

0.32

0.29

0.27 0.25

0.21 0.20 0.20 0.19


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about mobilizing $10 billion per year in the next three years and $100 billion per year by 2020 or developing countries,which is over three quarters oalloreign aid now given by the richest countries.

I am concerned that some o this money will come rom reducing other categories o oreign aid, especially health.I just 1 percent o the $100 billion goal came rom vaccine unding, then 700,000 more children could die rompreventable diseases. In the long run, not spending on health is a bad deal or the environment because improvementsin health, including voluntary amily planning, lead people to have smaller amilies, which in turn reduces the strainon the environment.

Looking AheadTere are a lot o important topics I didnt get around to in this letter. One area that I have been spending a lot o

personal time on is energy and its eect on climate. Te most important innovation required to avoid climate changewill be a way o producing electricity that is cheaper than coal and that emits no greenhouse gases. Tere will be a huge

market or this, and governments should supply large amounts o unding or basic R&D. Because the oundationinvests in areas where there is not a big market, I have not yet seen a way that we can play a unique role here, but Iam investing in several ideas outside the oundation. I am surprised that the climate debate hasnt ocused more onencouraging R&D since it is critical to getting to zero emissions. Still, I think it is likely that out o the many possibleapproaches, at least one scalable innovation will emerge in the next 20 years and be installed widely in the 20 yearsaer that.

I have decided to take the notes I make aer taking a trip, reading a book, or meeting with someone interesting andpull them together on a web site called www.gatesnotes.com. Tis will let me share thoughts on oundation-relatedtopics and other areas on a regular basis. I expect to write about tuberculosis, U.S. state budgets, creative capitalism,and philanthropy in Asia, among other things. Te trips I will document will include Nigeria, to check on the status opolio eradication; northern India, to understand more about improving vaccine coverage; and school visits in the UnitedStates. Te site will complement my annual letters as well as the oundations web site, www.gatesfoundation.org, which

has a lot more inormation about the topics in this letter.

My job is un and interesting because o the great people I get to work with. Besides Melinda, this includes our otherco-chairmy dad. He is a tireless champion o making sure we keep listening to the people we want to serve and notletting our size get in the way o that. Je Raikes, CEO o the oundation, is doing an excellent job evolving how we run,making sure we hire great people, and creating an environment where they can do their best work. And I am alwaysimpressed with the dedication and in-depth knowledge o the oundation team, starting with the division presidentsachi Yamada, Sylvia Burwell, and Allan Golston. I eel very lucky to get to work with all o them.

Bill Gates

Co-chair, Bill & Melinda Gates FoundationJanuary 2010

2010 bill gates annual letter

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