>> rose: welcome to the program. tonight, from studio 57 at cbs news in new york a conversation with bill gates, cochair of the bill and melinda gates foundation, and the chairman of microsoft. >> well there's a lot of cynics out there who talk about, hey, there's corruption. why is this we do this? you know, it's far away. and sometimes you feel like, gosh, that's such a constant thing. are we really going to make it? is this really as important as i think it is? and only by seeing the progress does it re-energize you to say, yes. unlike any time in history, this inequity is-- is being closed, and, you know, that matters to the fathers and mothers of africa, and in the long run tmatters to humanity's optimism

about its ability to achieve big things. the vacuum created by the u.s. not having clear views in solving problems is-- is-- is very scary. who's going to fill that void? yeah, there's a lot of great countries around, but we should be proud of the fact that people still expect us to step back, really know the numbers, know the science. the good news for microsoft is the magic of the future-- visual recognition, speech recognition, letting you navigate rich amounts of information-- that is very software centric. and the neat services where your memories and what you're doing in your educational core, that's going to be kept in the cloud for you. that kind of plays to might rosoft's strengths. >> rose: bill gates for the hour next.

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: bill gates is here. he is, as you know the chairman cofounder of the microsoft. his focus has been on philanthropic organizations

since july of 2008 when he transitioned out of his day-to-day role at the company to run the bill and melinda gates foundation, along with his wife. it is the world's largest charity, devoted to improving global health and american education. the foundation is close to its target of eradicating the polio viking a goal bill gates is planning to achieve by 2018. i am pleased to have him back on the program. we come to you from the cbs news studio in new york. welcome. >> great to be here. >> rose: tell me this the divisions in your life, which we've talked about before-- chairman of microsoft. along with melinda running the bill and melinda gates foundation. there's a third thing. what's the third thing, the catch-all for the rest of the things you do? >> well, innovation is what i love to work on, and so i'm spending time on energy innovation because we need cheap energy. we need clean energy. i'm creating a new high school course because i think science

and history can be brought together and made more interesting. often, the money that lets you do the innovation is what's missing, and i'm lucky enough to have capital to-- whether it's a new nuclear reactor or cheap solar, i can back some wild ideas so that i put time into that. and it lets me learn a lot of science, work with brilliant people. >> rose: i have in my hand the bill and melinda gates at annual letter from you from the foundation. who is this directed to? who are you-- who do you want to read this? >> well, warren buff set sort of an ideal person i'd like to find it interesting because he's very busy doing his job, but he cares a lot about these issues. he knows i get to travel to africa. i get to see what's going on with budgets and science. what's honestly taking place is there is the aid working? where's corruption blocking that? and so on a yearly basis, he'd like to have me summarize where

i'm optimistic, where we have setbacks, how should people think about the big causes-- education and the needs of the poorest. >> rose: what's interesting here, the theme of this is measurement. and you say that's crucial to have a goal and to be able to measure how well you're doing if you're going to reach the goal. >> right. it's been stunning to me in the last year that the places we've done well are where we're going and really be able to see what's going on. and, for example, if you want to get 90% of the kids vaccinated then you better know within a month for this area, is it working? and if it's working really well, what are they doing right? why is it working here and not here? and the tools that let us measure-- sensors, satellitees surveying people are much better. but idea of really bringing that to help the poorest, i'm stunned that that kind of thinking

systems feedback thinking is so rare. soap i wanted to highlight that we have seen it work, and now we need to apply it a lot more than ever before. >> rose: you cite a book by a gay named william rosen called "the most powerful idea in the world." and it was about steam engines. >> right. so the world basically stayed the same in terms of livelihoods until the industrial revolution. and so the steam engine came along and it led to factories being able to make projects. wool clothes became inexpensive. cotton became available to everyone. and the question, what was the magic there? this books covered very well. and the point they make unless you can measure which engine is better than the others all of these thousands of little small ideas don't get chosen. they don't add up. so without that feedback of

what's better, what's going on, then progress doesn't happen. but once you have the measurement, then it's obvious you discard this because it's not as good and you pick this and then you make the next improvement. and that constant well-directed feedback, once you have mum, it naturally emerges. q. and technology makesmeasurement easier. >> yes business technology you know becauseun you've got to pick whatever drives profit. if you don't pick tyou don't get to hire as many people. companies disappear. in the private sector, the idea of measurement almost goes without saying. when you get to government, because they don't pick clear goals and they don't have training and measurement, it's far more rare than it should be. . >> rose: and i assume government in its aids programs are demanding more measurement because of the economic hard times and the stress on their budgets. >> that's right.

if we're going to justify in very tight budget times taking this money that goes to the poor and making it a priority, people have to know that it's not an image of the past where some dictator corruptly takes advantage of it, but rather that kids are getting malaria bed mat, and people are being kept alive on aids drugs. so the credibility of aid, which honestly in the past, some of it was misspent, we need to work on that or else it will be cut. >> rose: and you have made the point often that the problems in the world are too big for either n.g.o.s or foundations to do without significant government aid you can't conquer these problems. >> that's right. our foundation spends about $3 billion internationally with all the things we do. overall, it's $130 billion, and the u.s. is about capitol hill 30 billion. although having foundations like

ours is a huge thing, the if the u.s. cuts back in 10%, at least in dollar terms you've cut out more than we bring. >> rose: in education teachers sometimes object to be simply judged by teacher scores. this idea of measurement in eagle county colorado, gave them a better way to evaluate performance. >> that's right. you can say that teachers shouldn't be measured at all. >> rose: right. >> and the great ones are great and the average ones are average. or you could say that they should be measured just by student test scores and i think neither of those is satisfactory at all. the test scores don't capture the whole picture. they actually don't tell you what that teacher needs to improve. so what we're trying bring to this is the idea of surveying the students in a very smart way, asking them if the teacher uses time well, and which students they work well with, and using observationes, training both principals and teachers to go and sit down and be able to look for how you

engage the class. and if we can train those evaluators well, then the teaching practice moves from thage up to the top car tile. that would make the u.s. system which is now one of the worst in the rich world absolutely the guest. best. if we can fund it with 2% of the salary budget it can be a phenomenal tool to make 'dication achieve the goals we have in mind. >> rose: jim grant is actually as important as henry ford, ford motor company, or tom watts orange the i.b.m. company. what did jim grant do? >> jim grant was the head of unicef the united nations organization thinking about children. and organizations like that you know, talk about all the right things. but what he saw was that the vaccines weren't getting out to all the kids.

only 25% of the world's kids were getting vaccines. and he decided he would build a measurement system-- this is in 1980. he built one that measured facts and coverage, and he would go and embarrass the political leaders whose countries had low numbers, praisethe ones who did it well. it was cheap snuff so incredibly impactful that he got vaccination from 25% up to over 70%. he saved more lives between 19 eighty and 1990 when he did that than anyone in all of history ever has and yet, you know he's not -- >> rose: known by many people. >> yeah very obscure. when i went to buy the book about him, it was completely out of print. so it's impress they have it was a measurement system along with his moral correctness that let him achieve that dramatic result. >> rose: but the interesting thing, too swhen they stopped

paying attention, it slid back down. >> that's right. as soon as it wasn't there, and the political leader being told "hey, we're falling behind these people. we need to get our vacinators to work harder or put more money into it then it went down quite a bit. and a lot of new vaccines came along that didn't get out there to the poor children so the gap between a poor child and a rich child that gap actually grew after the jim grant campaign had closed it quite a bit. >> rose: so turning to the united nations speak of great goals, there they are for the millennium grants. and they've set forecast for 2015 things that they'd like to achieve. how well have they done? and how do you measure that success as you define new goals for the next time? >> well it's actually pretty rare for the united nations to talk about measurements. they usually talk in terms of absolutes, like rights for all no more poverty. here, what they did is

phenomenal. they picked goals, eight of them. number 1 is about poverty, cutting poverty in half by 2015. it's already been achieved. they picked childhood death rates, the number of kids who die under five, which was 12 million back in 1990. it's on a path by 2015 to be under six million. so that's a 50% reduction, faster than any time ever. and so the goals for the first time got u.n. agencies and donors thinking, another does our money really impact this measure? which country is doing it well? so ethopia is a star because although they started from a bad situation, they cut their childhood death rate in two-third, and that was by looking at people who had done it well, and now they've become the example for all of africa how by putting in cheap, primary health care you can achieve an amazing result like that. >> rose: so on balance you give them high marks for what

they've of they've been able to achieve even though they didn't meet the goals that were set? >> that's right. we achieved maybe half the goals. the other half we set the parhigh enough that we're not there. these are unique in getting people to collaborate. it's kind of a good news story, you know, cut category childhood death in half that i don't think that's out there. people see a small disaster that might kill a few hundred, but we went from 12 million a year and we'll get to less than 6 million. that-- that's great. in the next 15 years i'd like to see us get below three million. >> rose: you understand this letter, "from time to time we should step back and celebrate the achievements that come with having the right goals, combined with political will, enerous aid and it has certainly deepened my commitment to this work--" your

commitment is pretty deep as it was. what do you mean by that "deepening your commitment?" >> there are a lot of cynics out there who talk about "hey, there's corruption. why should we do this? it's far away." and sometimes you feel like, gosh, that's such a constant thing. are we really going to make it? is this really as important as i think it is. and only by seeing the progress does it re-energize you to say yes. h1n1 like any time in history this inequity is being closed, and, you know that matters to the fathers and mothersful africa. and in the long run it marts to humanity's ability to achieve big things. if we can eradicate polio, i think that's uplifting to all of our endeavors. >> rose: and all this got started because you and melinda were look at a pie chart, and you saw something called-- what

was it? >> rotovirus. it was killing 500,000 children a year. and i said to melinda i never heard of rotovirus. she'd never heard of rotovirus. is it some super difficult thing to get rid of? in fact, rich kids who have almost no risk of dying of it-- they might get a little sick-- they had a vaccine that worked super well. and the reason you had a half million deaths a year was because it wasn't cheap enough and it wasn't delivered to all the children of the world. and that sort of became the centerpiece of okay, we've got to do the foundation work now instead of waiting. and then warren came along and doubled the resources we have. >> rose: but that pie chart changed your life. it became the centerpiece of how i was gog spend my post-mace career. >> rose: what are the metrics of success for you? >> well i take this childhood

death number and say that's a report card for all of humanity. >> rose: right. because if you look at it annual childhood death at that time was what 20 million? >> you have to go back quite a ways to get to 20 million. in 1990, it was 12 million a year. >> rose: 12, okay. today it's what 6? >> 6.-- sorry just-- 6.9 million so we'll get down below six. >> rose: but that's what's driving you, reducing young kids dying? >> yeah when there's science that we could do the invention and do the delivery to dramatically reduce that it's terrible that we don't. and yet just capitalistic systems alone wouldn't get us to do that because these people have no money. and so what plans we can do is

it can shed light on that and make sure the r& d gets funded, that the deliver gets done. >> rose: one thing you decide me before is seeing-- what you have to do is show people what's going on around the world. it can't just be numbers. has that experience changed you? >> i think to really commit yourself to this, you have to understand mentally, millions of kids but you have to get your heart involved by going out to a malaria ward and see the parents of the children who are still dying, see it filled up with kids with cholera or rotovirus. and look at that and say, "okay, this is what we're trying to stop." then every once in a while i go out and see there are less kids in those wards right now so you have that sense of progress. it's the individual cases. you know, like, i held in my hands a three-year-old girl who was one of the last in india to get polio, and she was smiling

and happy. but she didn't realize that because her legs are paralyzed how that's going to make her life so much worse than it would have been if we had stopped polio sooner. >> rose: when you created the foundation the provision in the bylaws says you'll spend all the money-- or the foundation will cease to exist 50 years after-- >> we changed that to 20 years. >> rose: 20 years after either you or melinda is no longer living. you both are dead. >> exactly. >> rose: and because you wanted to make sure what by putting that in? >> we think we picked important causes for this era, and that all the resources that are independent foundation should be spent against those causes. we're sure that in the future there will be rich people. they'll be more up to date about how to do things, how to execute things well. they'll pick the right team and create visibility.

but we're sure we can make big progress in our lifetime. >> rose: you said you didn't like the implication that the problems were persist, despite the best efforts that you could make. >> that's right. >> rose: you set the idea "we can accomplish this." >> and i don't want to hold back at all. i want all the resources to go against it because i know it's important. and, you know, i don't think having the money way out there in the future will will be nearly as valuable as ending these disease. >> rose: so why is the eradication of polio so important that you consider it your most important mission? >> well the world's put a lot into this. it started in 1988, when over 350,000 kids were being paralyze expected very quickly they got it down. and they spent billions and billions. in the year 2000 we looked like we were close.

we're already giving and yet it turned out getting last few countries was very hard. there were some big setbacks in nigeria, the rumor that the vaccine sterilized women was a setback. >> rose: did people in the government start the rumor? >> yes somebody running for office in the north started started that rumor. now, later that very individual changed his mind and actually was publicly vaccinated his own children. but once a rumor like that gets out, it's very hard to stop the damage. in fact, to this day which is almost a decade later, in parts of northern nigeria there's 20% of the households that the parents won't give the vaccine unless we bring in the religious leader and he really reassures them that no, this is safe. the reputational vac ens are very fragile, and, you know that's one of the big barriers. >> rose: but in the end vaccines are your most important

weapon. >> they're a magic tool. polio will be eradicate bide the polio vaccine. some day we'll have a malaria vaccine. inventing and delivering vaccines, that's the biggest impact we've had so far. >> rose: i'm interested in the culture thing, too, because there are people who kill vacinators. >> recently in the middle of december in pakistan, those going out to do the vaccination campaign were attending some were killed if you want north of pakistan, some down in karachi, and that is horrific. it's hard to understand why that's happening. no one's claimed credit. we've gone a month now without much violence. we only have 250 cases last year in these three countries, and so the reason that we're doubling down erasing a big budget making sure everybody is

committed to this because it's hard. once you get to zero, you dent you don't have to buy more polio vaccines. all those resources get freed up to work on the next big challenge. >> rose: there are three countries left, afghanistan nigeria, pakistan. >> exactly. >> rose: and what's the percentage of polio casesem year now? >> the-- we had last year the lowest east was under 250. the majority were in nigeria, and the rest were in pakistan and afghanistan. so it's minuscule and away are really really close on this one. >> rose: is 2018 the number? is that the date? >> we're committing we will get it done by then. you have to get to zero cases and wait two years for there not to be any cases.

>> rose: but is the idea here too, that you can win in the global health battle? here is an example of what we can do? >> absolutely. what we're going to do to get rid of polio, that-- the systems we're going to build to reach kids with other disease that would cuttify it but the victory of achieving good things will make it worthwhile. >> rose: if you get polio what disease are you saying you better watch out. we're coming after you next. >> i think as we're close or at the polar eradication, then we'll step back and look at malaria, and we'll have new tools. and i think we'll put a agreement plan and go after that. polio would be the second. so malayeria hopefully, would be the third disease completely eradicated. >> eradicated.

is there an appreciation of the need. >> the financial cases was a setback for so many things. anything far away in distance or time, you know when you've got problems here and now. they get less attention. so whether it's the health of people in africa or the challenge of climate change and what that's going to mean in 40 or 50 years, the financial crisis reduced attention to these things. so global health, i think there is a consensus there. european governments have always been very generous on these things. and their -- >> rose: why are they more generous than we are? >> well, with the u.s. aid budget is not nearly as big as a partiage of our economy. it's about .2% compared to germany and france are double that, and the really generous

gives are above .7. they're over three times that people like swooden and norway. you could say your defense budget and aid budget, add those together, that's your international engagement. because we have by far the world's biggest defense budget and we have the biggest international engagement budget. the europeans choose to balance their international engagement into vaccines and aids drugs and things like that. so they're less about-- they're more about getting people lifted up so they can be self-sufficient. >> rose: you get a lecture last week yesterday-- >> yes, yes. >> endowed by some journalists at the bbc, and what's interesting about it to me is you sailed three things. three convictions. the first was-- your work had

given you three convictions. one-- i want you to elaborate on this-- when had gone improves life improves because disease and bad help insinuates itself into every aspect of your life. >> that's right. . in our country, kids have such a healthy life that they go to school pretty fully equipped. their brain develops and they can achieve their potential. in africa almost half the kids are so damaged by malnutrition and other health things that they're never going to do well in school. so they're never going for themselves or their country and give in a productive way. if we can get the health improved, then it changes. and we've seen this. in societies where you get the health right, then all of a sudden you start to sigh the productivity goes up. also, the thing that's so magic to me and i can't say it enough

times of times is that paradoxically, instead of having more population growth yawz of because you're keeping more arb live which would seem to be what you would be causing. parents choose voluntarily to have less children because they have a sense they don't need to have as many to have a few survive to adulthood and take care of them. so then the benefit you see is that when population growth is less, everything-- feeding kids educating kids, having enough jobs having stability, take care of the environment-- that really becomes a crucial thing and a society can get on a path to be like the u.s. . >> rose: give me an example of what excites you about what we're looking from mapping of the human genome and all the progress made since 2001 when it was announce bide people who had been working on it so hard?

>> understanding the genome allows us to begin to understand how life works including how disease works. so taking, for example cancer and saying, okay that looks like breast cancer but it's-- there's many different types there. so the drugs used to treat it should be custom ides according to that pattern. you're starting to see the payoff on that. if you take plant-- because we can look at their d.n.a.-- we are beginning to understand plant diseases and saying okay how can we allow african farmers not have all these insects and diseases that lower their call the ral productivity to be about a fifth of what we have here in the united states. so the genetic revolution is going to give to us in many, many, many forms. when we finally get an aids vaccine, partly that will be because the basic science has given us the insight as to hue

the immune system works. >> rose: really interesting stuff in cancer dying nottics, too. there is-- diagnostic too. you have become interested in agriculture. >> i'm a city boy and i didn't understand about -- >> rose: you didn't plant anything. >> where all that food comes from. but want 75% of the poor people in the world are people who live on very small farms. and thinking about okay how do we lift them up? forces you to say well, what was the green revolution in the 70s where wheat, rice, and corn productivity went up unbelievably. you know, why didn't that happen in africa? how do we carry that forward? how do we make sure it's being done in a sustainable way and meet the food needs of the entire planet which are growing quite rapidly. >> rose: on climate change how are we doing? >> on climate change, you'd have to give us an fglu mine the

world? >> yes. we are flunking this one right at the moment. we should be first and foremost spending more on research because we need press conference throughs for very cheap national guard don't emit co2s. and those research budgets stunningly haven't gone up while we've spent a lot of money on deployment of noneconomic stuff that's valuable. we don't have a carbon tax. and the -- >> rose: is its carbon tax the way to go. not cap and trade, but carbon tax jathe difference between those are not that critical. >> rose: the idea is put a value on how much carbon you use. there are reasons are to do that. but because of the political realities, either one can be achieved. they both have the same effect, causing you to shift in making

your energy in a way. >> you look at germany and angela mirkle has basically sworn off nuclear energy. >> that is aa setback -- >> rose: you disagree with the decision she made. >> well, with the current generation of reacts because of the fukushima accident -- >> rose: they're old. >> people are now worried about that. there haven't been that many accidents, so you can have a reasonable disagreement about the current generation. there are generations coming that are inherently in their design form is more safe. if you don't like today's reactors you shouldn't group all the ways of generating nuclear energy that will come out. you shouldn't abandon those as well because we can make it so you don't need humans to make the right decision which today's reactors have that problem. >> rose: and what's the reaction in japan?

>> well, japan has most of its reactors shut down. but the-- they'll probably start back up the reactors. but whether they get involved in building new reactors, i'd say it's a real question mark. china is the most aggressive right now in building nuclear actors. they have over 25 -- >> rose: they're doing everything. they go full steam ahead on everything-- coal, nuclear alternative sources solar, wind. >> exactly. they need more increase in energy conservative and write now-- right now the bulk of that are new coal plant because that is clear and the least expensive. invention is anything to have to make the tradeoff look very different. >> rose: when you look at alternative sources here in the united states, people are talking about gas and that it can make us energy independent.

others raise questions about fracking, as you know. >> fracking, the issues of not contaminating water, there's no doubt done properly it's a very small extra cost. the local environmental issues can be taken care of. they're even looking at how the they recycle the water so they're not demanding water that might be used for other purposes. now, when you burn that natural gas, it still emits co2. but it's a miracle for the u.s. and it's great-- great-- >> so we should go full speed ahead on the development of natural gas because it will make us energy independent or if possible fuel independent or wecúdon't have to import fossil fuel from around the world and the political considerations of that make it urgent to do. >> right and if we put a-- some price signal on