Testimony from June 15, 1999

Prepared Testimony from Bill Gates of Microsoft

Thank you Mr. Chairman and Members of Congress. It is an honor to be here.  Mr. Chairman, I know that we are joined today by a number of students. I'd like to extend my greetings to them - and also to note how different things are today than when I was in school. Today, students have
access to powerful personal computing devices and a sea of information through the Internet that I could
only dream of when I was a teenager. We truly live in an amazing time. The information age is an era of new possibilities for us, for our children, and for the entire nation.

It is the greatest time of innovation and change in history. In less than 25 years we have seen the personal computer evolve from a hobbyists' toy to a tool many Americans can't imagine being without. We have seen its power double every 18 months, its price fall and its importance grow at home, at school and in every office. I know that many of you on this Committee are technology enthusiasts and appreciate this significance of this change.

As we learn more about how the information age is affecting us, the more we understand its central role in creating the remarkable new prosperity in this country today, and in accelerating economic development throughout the world. We are creating a new digital economy for this new information age.
Mr. Chairman, I know that yesterday Chairman Greenspan appeared before this Committee. Last month,
he made a very important observation that I'd like to read very briefly. He said: "The newest innovations,
which we label information technologies, have begun to alter the manner in which we do business and
create value, often in ways not readily foreseeable even five years ago... The breadth of technological
advance and its application has engendered a major upward revaluation of business assets, both real and
intangible."

I'd like to reinforce Chairman Greenspan's points by telling you about the findings of a major new study
of the digital economy carried out by the Business Software Alliance, an organization representing most of
the nation's largest software developers. The study will be released tomorrow, and I will ask that, when it
is released, its entire contents be entered into the record of this committee.

The results of the BSA study once again confirm that the unexpectedly strong economic growth this
country is experiencing can, in large measure, be traced to the vibrant, competitive and fast-growing
computer technology industry. This sector has created more new jobs than any other part of the
economy. In fact, we can predict today that by the year 2000, the software industry's contribution to the
U.S. economy will be greater than the contribution of any other manufacturing industry in America- an
extraordinary achievement for an industry that is less than 30 years old.

Today, America not only sells more cars than Japan. We also lead the world - by a wide margin -- in
software development. Last year this sector grew more than 15%, and is growing at nearly four times the
rate of the economy as a whole. The software industry contributed more than a $13 billion surplus to the
U.S. balance of trade, and this will rise to roughly $20 billion next year. A strong technology sector has
spurred the renewal of industries old and new across America.

Moreover, new technology companies are being created every day, and are generating incredible
valuations overnight. The slew of recent mergers reminds us just how quickly the landscape of the high
tech marketplace is changing. That change will continue. In this industry in particular, the free market is
working, and working well.

Mr. Chairman, I believe that in Washington, D.C., there is a term for people who are incredibly interested
in public policy. They are known as policy wonks. Well, in my industry, these people are called computer
geeks, and I'd have to say that I am one. If you will indulge me for a few moments longer, I'd like to
share some of my enthusiasm for what technology will mean for us in the future. I am very optimistic
about what computer technology will mean for all of us - and for the students who are joining us today
via satellite.

As technologies change, so does our mission at Microsoft. For the past 20 years our vision was of a PC
on every desktop and in every home - a tool that anyone could use to get things done. And today, a
majority of American businesses and more than half of U.S. households have a PC. Now we are moving
into a new era. The merging of telecommunications, computer technologies and consumer electronics with
the world of the Internet will create a new universe of intelligent PCs and complimentary devices that will
deliver the power of the information age to anyone, anywhere, and anytime.
What this means is that there will be a proliferation of smart, connected devices, from palm-sized digital
assistants and "tablet' personal computers to smart TVs and Web-enabled cellphones. All of your files,
schedule, address book and everything else you need will automatically be available on each of these.
When you're traveling you'll be able to call up your itinerary, book an appointment or view your stock
portfolio using the device you have to hand. It will know the information you need, and when and where
you need it. Wherever you are, you'll be able to access your own "digital dashboard" - your personal
portal to your own secure office desktop - on any PC.

We are working hard to develop software that makes computers even easier to use - next year we aim to
spend some $3 billion on research and development. And one day in the not too distant future, computers
will be able to see, listen and speak. At home or in the office, you'll be able to control your PC by talking
to it. It will automatically back up your information, update its own software and synchronize itself with
your devices on your home network. You'll even have a notepad on your refrigerator that will be up to
date and allow you to coordinate with other information at home, at your office or at your children's
school.

When Congress is in session, a wireless network will keep you in touch with your office. I don't need to
tell the members of this committee how important mobility is as you move between your state or district
and the nation's capital. As technology becomes more flexible and more powerful, it can be a tremendous
tool in terms of creating efficiency and instant communication.
The PC also holds the potential to make government more efficient and more responsive. We already see
the beginning of this with government web sites that offer people a wealth of information and resources.
As government increasingly incorporates technology into its operations it will make information flow even
more open and efficient. At Microsoft, our use of technology has all but eliminated paper flow, and I can
tell you from first-hand experience that's a wonderful thing. Technology also offers an opportunity to get
the public more involved and, some day, perhaps, to engage people in a two-way dialogue on the
important issues and challenges we face. The continuing rapid growth in the Internet will help power this
information revolution, just as the proliferation of new devices will help make the Internet more useful
and accessible to everyone.

Five years ago, who would have imagined that people would now be shopping for automobiles, home
loans, airline tickets or clothing on the Web? Electronic commerce has increased tenfold in the last few
years, making it convenient for people to purchase almost anything, anytime, from anywhere. By 2002,
nearly 50 million Americans will be shopping online, spending almost half a trillion dollars on the Web.
There is endless speculation about which companies will be successful. The big winner will be consumers.
They will see better prices, more choice, more opportunities to do the things they want to do.As
Chairman Greenspan made clear, companies have already seen enormous benefits from computer
technology - benefits that are now being multiplied by online commerce. But there is much more to be
done. Like helping companies integrate their computing systems and create digital processes to perceive
and react to competitive challenges and consumer needs. By doing this, they will be able to extend the
gains in productivity that are helping fuel our economic strength today.

But turning this vision of the future into a reality will take another important investment in America
investment in education. We cannot fill all of the jobs being created if we don't make technology a key
part of every child's education.

Education in the digital age will offer tremendous promise. Learning will be more student-centered.
Teachers, parents and students will work collaboratively, and students will be prepared for a technology
workplace with the opportunity to engage in lifelong learning. At Microsoft we call this approach the
Connected Learning Community. Taking education into the digital age is a challenge for all of us.
Government at all levels, public-private partnerships and philanthropic institutions will play critical roles in
preparing today's students for tomorrow's workplace.

Only 14% of teachers currently use the Internet as part of their instruction. We need to make much more
progress here. At first, people believed that the Internet was suitable only for quizzes or just learning
about technology itself. Today, the educational community knows that the Internet can be a resource for
allowing curious minds to learn in new ways - about math, physics, philosophy, in fact about anything.
A New York school superintendent attending one of educational conferences we hold at Microsoft
recently explained that the PC and the Internet are encouraging students to do more writing, more reading
and less TV watching. As a result, "I don't know" is fast becoming "I don't know yet."
Exciting projects are underway to give students the latest tools for learning. At Microsoft, we are working
on a pilot project at 500 schools to provide laptops to each student. The results to date have been amazing
in terms of increased learning. Many other companies and organizations are involved in similar efforts,
whether providing the latest technology for learning or providing scholarships for math and science
excellence.

I've had an opportunity to learn a little about how Birmingham Seaholm High School and Pittsburgh
Super Computing Center College are using PC technology. Juniors at Birmingham Seaholm are using
computers in a very entrepreneurial fashion - they have built a cookie factory and next year plan to
develop a micro robot that will take cookies off the cooling rack. Students in Pittsburgh are doing some
great work on improving high speed networking performance and capabilities. These schools are to be
commended for the work they've done to use technology as an important tool in improving education.
I look forward to talking with some of the students who have been working with PCs. Unlike their
parents, most of whom learned about computers in adulthood, the information age is the only age these
students have known. Their success will depend on how well we teach them.
When you look at the phenomenal economic growth produced by technology, and the huge increase in
demand for highly skilled knowledge workers, it is clear that our ability to continue benefiting from
technology will largely depend on how well we educate the next generation to take advantage of this new
era.

In closing, let me sum up why I'm excited to be here today and to be part of this hi-tech summit. At
Microsoft we make software. We make software for a simple reason - we want to provide tools to make
peoples' lives better. At Microsoft we're excited about the future - we're excited about the tremendous
economic benefits of our industry, but we're more excited about helping every individual - in business, in
schools and in the home - lead more productive lives.
Thank you.