Gates: Innovation In Health Care, Education Better Come Soon

"Although the acute financial crisis is over, the economy is still weak, and the world will spend a lot of years undoing the damage, which includes lingering unemployment and huge government deficits and debts at record levels," Gates wrote in the letter. "Despite the tough economy, I am still very optimistic about the progress we can make in the years ahead. A combination of scientific innovations and great leaders who are working on behalf of the world's poorest people will continue to improve the human condition."

To spread the foundation's message, Gates appeared on "The Daily Show" Monday night to talk about the foundation's efforts and last week started a Twitter feed that now has more than 350,000 followers in the first week. The 42 people Gates follows ranges from political advisers and news outlets to "High School Musical" star Ashley Tisdale.

The biggest roadblock to affording better education and health care at both a national and global level is a lack of innovation in those areas, according to Gates.

"Society underinvests in innovation in general but particularly in two important areas. One area is innovations that would mostly benefit poor people -- there is too little investment here because the poor can't generate a market demand. The second area is sectors like education or preventative health services, where there isn't an agreed-upon measure of excellence to tell the market how to pick the best ideas," Gates wrote.

Another 10 years without innovation in health, education, energy or food will lead to a "bleak" picture, Gates wrote. Health costs for the rich will escalate, which will keep poorer people stuck without proper care too, he said.

"In the United States, rising education costs will mean that fewer people will be able to get a great college education and the public K-12 system will still be doing a poor job for the underprivileged. We will have to increase the price of energy to reduce consumption, and the poor will suffer from both this higher cost and the effects of climate change. In food we will have big shortages because we won't have enough land to feed the world's growing population and support its richer diet," Gates wrote.

An increased focus on innovation such as online learning and cleaner ways to produce electricity will help more people lift themselves out of poverty, he said.

"Although innovation is unpredictable, there is a lot that governments, private companies and foundations can do to accelerate it," Gates wrote. "Rich governments need to spend more on research and development, for instance, and we need better measurement systems in health and education to determine what works."

The Gates Foundation has developed a framework for improving innovation, with a key criteria being that once the innovation is proven, the cost of maintaining it needs to be lower than the benefit derived from it so that individuals or governments will make the investment, Gates wrote.

"Many things we could fund don't meet this requirement, so we stay away from them. Another consideration for us is the ability to find partners with excellent teams of people who will benefit from significant resources over a period of five to 15 years," Gates wrote.

"High-risk innovations require the invention of new tools. Some are at the frontiers of science, such as finding a new drug and running a large trial to see how well it works. Other high-risk efforts involve changing social practices," Gates continued.

Gates outlined nine areas of innovation in three categories the foundation is focusing on. Under a global health program, the foundation is working on pneumonia and rotavirus vaccine delivery, invention of an effective malaria medicine and a pill or gel to reduce the risk of getting HIV. Under a global development program, the foundation seeks a more productive corn seed that can tolerate droughts, financial tools to make it easier for poor people to save money and better sanitation systems. In a U.S. program, the foundation will focus on a new measure of teacher effectiveness and improvement systems, more interactive learning and more Internet-ready PCs in libraries.

"We are focused on strong measurement systems and sharing our results where we have successes but also where we have failures. Innovation proceeds more rapidly when different parties can build on each other's work and avoid going down the same dead end that others have gone down," Gates wrote.