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Bill Gates on Whether 'Disruption' Can Jump-Start the Economy


NEW YORK CITY -The world and the U.S. economy were far different when Wired magazine launched its first "Disruption by Design" business conference in 2009. But disruption is a theme that continues, said Wired publisher Howard Mittman.

"Disruption was a theme we stumbled upon three years ago," Mittman told the audience and panelists at the 2011 edition of "Disruption by Design" at the Museum of Jewish Heritage here on May 3.

As stumbles go, it was a prescient one. This year's installment attracted a swarm of A-list panelists that included Bill Gates, Microsoft's chairma; angel investors Harj Taggar and Chris Sacca; Johnny Chung Lee and Susan Wojcicki from Google; Mick Mountz, founder and CEO of Kiva Systems; Autodesk CEO Carl Bass; "Planet Money" host Adam Davidson; Omnimedia's Martha Stewart; Andrew Keller, CEO of advertising's CP+B; Salman Khan, founder of Kahn Academy; and Netflick CEO Reed Hastings.

"Wired was founded on the notion that change is good," Chris Anderson, Wired's editor-in-chief, said in his opening conference remarks. "Disruption is the ultimate change."

Anderson extolled the creative powers of disruption. Smart companies today are using the creative force of disruption to rewrite the playbook to stay ahead of the game, he said. The choice is simple: you can get blindsided by what's to come or you can embrace change and force others to compete on your terms.

The conference format consisted of one-on-one conversations between the panelists and Wired editors.

Bill Gates' take on tech

The lead panelist was Bill Gates, Microsoft chairman and co-chair of the Bill & Melinda Gates Foundation. In addition to these roles, Gates is also an avid student of new energy technologies and puts his money where his mouth is with his investments.

During his conversation with Anderson, Gates expressed the hope that breakthrough research could help the nuclear energy industry solve the big problems of safety and popular will that are holding it back and help reduce our reliance on coal and oil.

Nuclear power, he said, to some degree is a victim of bad press -- because when something goes wrong, the consequences can is dramatic, as the recent events in Japan showed. Fossil fuel plants are hardly more benign, but their negative effects are more incremental.

"They kill people, but they kill them a few at a time, which is preferable to politicians," Gates said.

That kind of disruptive breakthrough Gates envisions, though, will require large investments in research and development, an area often given short shrift by companies.

"Society always under invests in R&D [research and development]," Gates said.

But he has confidence that as a nation we can develop home-grown solutions if we think big enough.

"This is the place where ideas are," he said.

Nurturing disruption

Those ideas are frequently spawned within startup companies.  But those ideas and those companies require capital to be brought to fruition.

Increasingly, that role is fulfilled by angel investors who provide relatively small amounts of money to early-stage companies. Harj Taggar, a partner at accelerator Y Combinator, and Chris Sacca, the founder and principal of Lowercase Capital, offered the Wired audience their insights into the dynamics of the current investment climate.

"We invest very small amounts of money in early stage companies," Sacca said. "My first actual angel investment was on a credit card. That was Photobucket. It's very, very hip to be an angel investor now."

Both Sacca and Taggar said they didn't see evidence of a massive bubble in technology companies like the one that blindsided the economy at the turn of the century.

"They're all real businesses this time around," said Sacca.

What they have noticed, however, is a shift in investor money skewing away from core disruptive technologies into incremental technologies with a more immediate payback timeline. This may be a reflection in part of the growth on East Coast tech investors who have monetization baked into their DNA.

Picking winners, they said, is still a mixture of art and science.

"It's hard to pick what's going to be massively disruptive," said Taggar. "We bet on the people."

The new industrial revolution

Though American manufacturing has long been consigned by many to the dustbin of history as a remnant of past industrial glory, that area of the economy may be ripe for transformative disruption through the advent of new manufacturing-on-demand technologies, Carl Bass, the president and CEO of Autodesk, a maker of design software, told conference attendees.

This new industrial revolution will be launched by new design software and fabricating machines such as 3-D printers that enable hobbyists and small businesses to create small batches of custom-design goods to their exact specifications.

"When you have ten, it's a hobby," he said. "When it's a thousand, you have a business."

Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on Twitter @nedbsmith.

Ned Smith

Ned was senior writer at Sweeney Vesty, an international consulting firm, and was Vice President of communications for iQuest Analytics. Before that, he has been a web editor and managed the Internet and intranet sites for Citizens Communications. He began his journalism career as a police reporter with the Roanoke (Va.) Times, and was managing editor of American Way magazine and senior editor of Us. He was a Captain in the U.S. Air Force and has a masters in journalism from the University of Arizona.