To most of the world Bill Gates has long been known as one of the world's richest men. To those of us who love value investing we just think of him as Warren's "BFF."
He recently wrote the following article, published in the Wall Street Journal, that discusses how we can improve the world:
We can learn a lot about improving the 21st-century world from an icon of the industrial era: the steam engine.
Harnessing steam power required many innovations, as William Rosen chronicles in the book "The Most Powerful Idea in the World." Among the most important were a new way to measure the energy output of engines and a micrometer dubbed the "Lord Chancellor" that could gauge tiny distances.
Such measuring tools, Mr. Rosen writes, allowed inventors to see if their incremental design changes led to the improvements—such as higher power and less coal consumption—needed to build better engines. There's a larger lesson here: Without feedback from precise measurement, Mr. Rosen writes, invention is "doomed to be rare and erratic." With it, invention becomes "commonplace."
In the past year, I have been struck by how important measurement is to improving the human condition. You can achieve incredible progress if you set a clear goal and find a measure that will drive progress toward that goal—in a feedback loop similar to the one Mr. Rosen describes.
This may seem basic, but it is amazing how often it is not done and how hard it is to get right. Historically, foreign aid has been measured in terms of the total amount of money invested—and during the Cold War, by whether a country stayed on our side—but not by how well it performed in actually helping people. Closer to home, despite innovation in measuring teacher performance world-wide, more than 90% of educators in the U.S. still get zero feedback on how to improve.
An innovation—whether it's a new vaccine or an improved seed—can't have an impact unless it reaches the people who will benefit from it. We need innovations in measurement to find new, effective ways to deliver those tools and services to the clinics, family farms and classrooms that need them.
I've found many examples of how measurement is making a difference over the past year—from a school in Colorado to a health post in rural Ethiopia. Our foundation is supporting these efforts. But we and others need to do more. As budgets tighten for governments and foundations world-wide, we all need to take the lesson of the steam engine to heart and adapt it to solving the world's biggest problems.
One of the greatest successes in terms of using measurement to drive global change has been an agreement signed in 2000 by the United Nations. The Millennium Development Goals, supported by 189 nations, set 2015 as a deadline for making specific percentage improvements across a set of crucial areas—such as health, education and basic income. Many people assumed the pact would be filed away and forgotten like so many U.N. and government pronouncements. The decades before had brought many well-meaning declarations to combat problems from nutrition to human rights, but most lacked a road map for measuring progress. However, the Millennium goals were backed.....
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