Bill Gates: Capitalism is the wrong incentive here

Buffett, Bill and Melinda Gates on biggest accomplishments
Buffett, Bill and Melinda Gates on biggest accomplishments

The richest person on the planet believes there are times when profits should not be the sole motivating factor for entrepreneurs.

"Science that helps poor people is where capitalism really doesn't have the right incentive," Microsoft co-founder and philanthropist Bill Gates told CNBC in an interview that aired on "Squawk Box" on Tuesday. "Science in general is underfunded because the benefits to society are greater than what comes back to the inventor. So there's a certain risk averseness."

"We use this thing called grand challenges, where we solicit ideas," he said. "One that got more headlines, it's one of 80 we've done, we solicited the idea of a new condom. That was less unattractive."

The Bill & Melinda Gates Foundation—funded mostly by the fortune Gates amassed at Microsoft and a massive grant from Berkshire Hathaway chief Warren Buffett—is also working on projects such as trying to eradicate the mosquito-borne disease malaria, which according to the Centers for Disease Control and Prevention killed nearly 600,000 people in 2013, mostly children in Africa.

"We're nowhere near solving malaria," Gates said, but added he's energized about the idea of "challenging the very best scientists" to work on big problems.

Gates was joined by his wife Melinda Gates and Buffett at Berkshire's annual shareholder meeting in Omaha, Nebraska. Bill Gates is on the Berkshire board of directors.

Buffett—who pledged much of his fortune to the Gates Foundation in 2006 and serves as a trustee—said he's particularly excited by the work Melinda Gates is doing around family planning and "what happens when people really aren't in control of the family size. … That took some guts to do, and I think it's had a huge impact."

Buffett, Bill and Melinda Gates on giving
Buffett, Bill and Melinda Gates on giving

In her travels to the poorest regions around the world, Melinda Gates, co-chair and trustee of the foundation, described the situation as "life and death … whether they can have another child or not, whether they want to."

"I took on this work about two years ago of really getting contraceptives into women's hands, voluntary contraceptives," she continued, "educating them and then letting them make that decision for themselves. Because if they can space and time the births of their children, the women are healthier, as are the children."

Gates said she's also proud of the foundation's work making vaccines more widely available. "Six million children are alive because of the vaccine work that we've done in deep, deep partnership the last 15 years," she said.

Bill and Melinda Gates are effective at persuading wealthy people to commit big resources around the world to things such as vaccines, Buffett said: "That's something that is almost unique to the two of them, and they're playing that hand very forcefully."

In a mission statement on its website, the Bill & Melinda Gates Foundation said it strives to help "all people lead healthy, productive lives," guided by the belief that "every life has equal value."