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Interview

'Robot taxes' will help keep humans employed, Bill Gates predicts

US billionaire and philanthropist says Japan needs software talent to compete

Microsoft founder Bill Gates said the U.S. should continue to play a role as an aid donor, because stability in poorer countries is beneficial for the world, including the U.S.  ©Bill & Melinda Gates Foundation

SEATTLE, U.S. -- Microsoft founder and philanthropist Bill Gates predicts that as artificial intelligence and other technologies flourish, societies will use taxes to ensure there is still a place for humans in the workforce.

"It is quite amazing, the progress the world has made during the last, I would say, 28 years," in tackling medical and poverty problems, Gates said in a wide-ranging interview with Nikkei. He emphasized the importance of global cooperation, as opposed to U.S. President Donald Trump's America First agenda, to resolve issues such as climate change.

He also stressed that nurturing software talent is important for Japan to remain competitive.

Microsoft has long been a leader of the global tech industry, accounting for a high share of computer operating systems. Microsoft's overwhelming strength inspired rivals, including Apple and Google, and helped lay the groundwork for today's digital society.

Even now, 10 years after he left a full-time role at the company and shifted his attention to the Bill & Melinda Gates Foundation, Gates remains an avid follower of technology.

"Technology has taken us from all being subsistence farmers where, when the weather was bad, we would be malnourished and our average life span was very short," Gates said. "So yes, I think that the human condition today, where people learn how to read and they live into their 70s or 80s, [has greatly improved]."

Gates noted that technology has enabled people to lead longer and more cultured lives. Yet tech can also be disruptive. One big fear is that automation will steal more and more human jobs.

"All these technologies bring problems as well as solutions," Gates said. "Electrification is of course a miraculous thing. [But] the coal plants are emitting pollution; the nuclear plants, people are worried about safety; the automobile, we have crashes. Every new technology, whether it is social media now, or robotics, people are worrying, 'OK, what about the negative effects?'"

Gates said that the concerns are understandable, and that it is more important than ever to come up with ideas on how to use technology effectively.

"[With] the idea that robots will help us make more goods and services with less people, we have defined the job is not the only thing that we were born to do," he said. "If we have to work less, then yes, it is a question of how we should spend that time. But [with] that freedom, humans will find ways to create meaning."

Although the business environment is changing dramatically, he said, "I am certainly not saying that we should artificially slow down the move toward automation, and robotics is just a form of what we have been doing to date."

Gates does not think robots will kick humans out of offices. "The basic idea in taxation is you can tax capital or you can tax labor, and a robot is a capital good. And right now, there are a lot of taxes on labor, like payroll taxes. Over time, because we as humans want to encourage jobs and job creation, instead of having these positive taxes on labor, we will actually probably have negative taxes, subsidization to bolster labor demand.

"We will shift and we will have much, much higher taxes on capital. So when I talk about a robot tax, I am talking about a basic shift of the form of taxation that we have. Property tax, capital gains tax. Society will want to shift and that will mean that it will be like a robot tax."

Explaining how this would work, he continued, "If you choose to buy a robot instead of employing humans, that is OK, you can do that, but the tax system will be pushing you to at least consider using humans more, unlike today's tax system, which actually pushes in the opposite direction."

Some experts point out that social media could make people think too narrowly and result in divisions in society. "The younger generation is going to be very important because they shape things like social media [and] what is the good impact of social media," Gates said.

He said he felt his foundation's activities are beginning to bear fruit. "The metric of greatest importance in global health, and one that we track closely, is the number of children dying who are under the age of 5. Back in 1990, that was over 12 million a year, now it is less than 6 million a year," Gates said, crediting the development of drugs and improvement of supply systems.

Bill and Melinda Gates meet with women in the Indian village of Jamsaut. Child mortality has improved dramatically in recent decades.   © Bill & Melinda Gates Foundation

The percentage of people who live in extreme poverty -- living on less than $1.90 a day -- declined from 36% to 9% of the world's population. "The human condition is improving and even if we talk about inequalities, the poorest countries, including India and China, have been growing their economies faster than the rich countries, including Japan and the U.S., and so actually ... the world is more equitable today," he said.

Gates sees Africa as problematic. "The portion of extreme poverty that is in Africa will be very, very high, about 90% by midcentury. The only way to really keep those numbers going down is to work with Africa so they invest in health and education even more than has been achieved to date," he said, stressing that investment in education, among other areas, will be more necessary than ever. "We have to cut the costs down very dramatically," to ensure everyone will benefit from innovation, such as pharmaceuticals, he said.

Gates' activities at the foundation extend across national boundaries, much like Microsoft. But Trump's policies run counter to that approach. "[We are] in an atmosphere that is a little negative about globalization and relationships with other countries," Gates said, adding that the U.S. should continue to play a role as an aid donor, because stability in poor countries is beneficial for the U.S.

As aid recipients become more independent, they will help boost the global economy. "Even South Korea was an aid recipient. India was a big aid recipient. Now, of course, South Korea is a significant donor," Gates said.

"I certainly believe there are a lot of issues like climate change or stopping disease, where if the world works together, that is really the only way to solve those problems," he said. "Then I also believe in trade, where the world economy does much better if we have more trade."

Japan pales as a leader of innovation compared with the U.S. -- home to Google, Apple, Facebook and Amazon.com -- and booming China.

"Science and engineering are where a lot of this change in innovation is coming from," Gates said. "Japan has always had a lot of engineers and companies that think about engineering, so that's very helpful.

"But now they have to adapt to the new software-based, AI-based [technology]. Hopefully, the education system is feeding really well-trained people into those companies to help them stay globally competitive, like Toyota Motor is."

Gates said he hopes to see a strengthening of cooperation between his foundation and Japan. "Japan has a lot of expertise in Asia, and we are trying to eliminate malaria in Southeast Asia as part of the first step of the overall multidecade global eradication program," he said.

"There are certainly the government resources, there are certainly the private companies, including the pharmaceutical companies. Japanese pharmaceutical company Eisai is one of the companies that donate medicine for neglected diseases."

Bill Gates, 63, founded Microsoft with friend Paul Allen in 1975, after dropping out of Harvard University. He built his enormous fortune by nurturing software, which had only been an accessory to hardware, into a massive business.

In 2000, he and his wife Melinda established the Bill & Melinda Gates Foundation, which has about 1,500 staff tackling medical, poverty and educational issues.

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