MR. GATES: Thank you. Well, it's an honor to be on this panel.

The pace of innovation and the breadth of its impact on our society are really unparalleled. It was 25 years ago when Paul Allen and I had a dream about the personal computer, and, today, the personal computer is an essential tool of the American productivity revolution. We've seen its power double every 18 months, its price fall and its importance grow as an empowering tool in our lives.

As Chairman Greenspan said, we're just beginning to understand how central the PC and software innovation have been to the creation of the remarkable prosperity that so many people are enjoying today. It's this pace of change and the contribution of these changes to our future prosperity that are changing our lives, not only here in this country, but around the globe.

It's so critical that we understand this -- that there is really an obligation, I think, for all of us to not only embrace the new technology, but think about how we can make it available to everyone, without regard to background or station or even what country they live in. And I think that's a key theme of our panel today.

There are so many statistics that could be cited about how technology has changed the economy. Just one that I looked at recently from an MIT economist talked about how all the investments in these technology innovations have more than paid back double what was put into the hardware and software. That means that the sum has been much greater than the cost of the parts.

Right now we're just embarking on electronic commerce. Again, Chairman Greenspan mentioned that this is going to reduce a lot of the overhead in the economy. A lot of the pushing-paper-around jobs that are not interesting and not value-added will be reduced in that those resources will be freed up for productive activities. One example of this is that processing a purchase order is going to go from being about a $75 cost to about $10, and that alone will add $1 trillion in benefits just in the U.S. economy.

Well, this change is not just good for business. In fact, if you had to pick who's the big winner in all of this, you'd definitely have to pick consumers. Technology is putting them in the driver's seat. Think about what electronic commerce does if you're trying to buy a product. It lets you go out to the Internet and look at products and services of every kind. Whether you want to look by price, by reputation, you'll be able to find products that never would have been available through traditional distribution channels -- products that are unique to your particular interests. And so it's the consumers who are in charge as price transparency climbs.

Now, that makes businesses innovate in a way that really wasn't necessary before, whether that's innovation in quality, customer service, or simply the price of the product. And it's that virtuous cycle that's allowed capitalism to work better in this era than ever before.

Just a decade ago, people wondered: Would the PC revolution eliminate jobs? Would it make jobs in some ways worse? Today, we know that certainly, on balance, technological advancement has led to lower unemployment that they've gone hand in hand. And so this technology revolution has been one of the greatest job creation engines ever.

We also know that the freedom enjoyed by the creators and innovators in this technology have been key to realizing these benefits. The Information Age is not just an age of possibility, it's also an age of opportunity. This is an era where any kid who has got a great idea can go out and start a company, and many of those will be very, very successful.

Just a second on some of the possibilities ahead of us. I'm often asked, are we at an end? Has that magic been created and now we have the benefits? The answer is that the magic has really just begun. We're looking at Microsoft on the next frontier of technologies. Breakthroughs that will allow computers to listen, to learn, to be in a tablet form, connected up to a wireless network that you just carry around with you. And so, all these new devices and the natural interfaces that we'll put on them will really drive this to a whole new level. So we're at the beginning of what the computer can do to change our lives.

The best is yet to come. Technology is creating the most powerful communications vehicle that we have ever seen. And it has the ability to wipe away barriers. When I walk the halls at Microsoft, workers at Microsoft who come from other countries are sitting there reading the newspapers from their country, listening to the radio station and being involved in discussion and debate with any sort of topic or any community that they want to be involved in.

Nowhere does this technology hold more promise than in education. The Internet and the personal computers are critical tools that teachers will be able to use in new and exciting ways. In this age, learning will be more student-centered and more global. Software will let teachers share best practices with each other. They'll let students reach out to find other students with common interests, and they'll allow the world of knowledge to be easily available.

One of the goals that the foundation that Melinda and I created have gone after is making sure that in every library in this country there's a PC connected to the Internet. And what that means is that in the same way we made literacy and access to books a priority, now the PC and the Internet will be available in the same way to everyone.

The collaboration we're seeing between teachers, libraries, students and parents -- it's very, very exciting. And yet, here, too, we can say that we're just at the beginning. Today only 14 percent of teachers are actually using the Internet as part of their instruction, and there's a lot we can do to drive this forward. There are some pilot projects that Microsoft and others are involved in where actually every student gets their own laptop computer. And the results of this, where the student feels a sense of ownership and can use it as much as they want to catch up or pursue things in their own way -- the results are quite phenomenal. And yet, we don't have the level of resources and training to make that a reality in all the classrooms. So there's a lot more that we can do.

I think technology is a great change agent for democracy, whether in this country or in other countries. I think that it will increase voter involvement, voter accessibility to what's going on. And I hope that voter participation can rise as a result of that.

Now, I've talked mostly so far about computers and the Internet, and the great things they're doing. As I started my philanthropy a few years ago, I was thinking, boy, most of what I'll do is make sure that these advances are available to as many people as possible.

But the more I learned about what was going on, and what priorities we should really have in our foundation, the more I studied global health. And Melinda and I decided that global health would actually be our top priority. After all, as we think about it, having healthy children and families is more important than anything else.

And in parallel with this computer revolution, the biotechnology revolution is creating an opportunity to create new vaccines, to lower the cost of the vaccines we have, and do some amazing things. For example, polio will soon be eradicated from the face of the Earth. The President did his part just a few weeks ago in India, when he administered a polio vaccine to a baby -- although judging from the scream he got in return, I didn't get the sense his patient appreciated it at the time. (Laughter.)

In America, we take a lot of these great vaccines for granted. But that's not the case for millions of children around the world. So when we talk about these divides, yes it means the Internet and computers, but the technology gap of most importance is about world health. The difference between having a polio vaccine or not having a vaccine, or having the best equipment or not is a deadly difference. And that's a technology gap I'm very committed to lessening as much as we can.

One of the partnerships that we've gotten involved in is called The Global Alliance for Vaccines. This group has a really profound goal. Its goal is to take the 3 million children who die every year of diseases that they shouldn't die from because they don't have vaccines and making sure that's a thing of the past. It's a challenge that I don't think we can shy away from, but it's something that's going to require business, government, philanthropists, all to get involved.

In the last six months, I'm really pleased to see there has been on the part of this administration, on the part of the pharmaceutical companies, on the part of the health community, renewed commitment to this area. We also expect to see advances that will help in the battle against AIDS. The International Aids Vaccine Initiative is hopeful that in the next 10 years, there will be an AIDS vaccine.

So these are amazing times. And I'm really proud and grateful to have had a chance to be a part of this technological revolution. It's at the heart of so much exciting progress, and the scope of change -- economic, social, and cultural, is even amazing to the people who have been involved in helping it take place.

All this power is rooted in the possibilities of technology lifting up people around the world. And because technology has the power to make such a positive difference, we have an obligation to make it available everywhere we can. The global divide must give way to a global connection. We can't be satisfied until computers in inner-city classrooms equal the computers in suburban classrooms; until the vaccinations children get in Ghana equal the vaccinations children get in Baltimore; until every person can participate in the advances the Internet will bring to our society.

Thank you.

(Applause.)

Transcript by Federal News Service, Inc. 1-800-211-4020