CEO Satya Nadella has spoken at length about the role Microsoft - the second-most-valuable tech company, behind only Apple - can play in making the world a better place.
At a media event on Monday, Nadella said that last year, he was inspired by Colin Mayer, a professor at the Oxford Said Business School and a researcher of the role corporations play in modern society. While Nadella didn't mention the book by name, he's almost certainly referring to Mayer's latest book, "Prosperity: Better Business Makes the Greater Good," published in January 2019.
"Colin Meyer had this one definition of, what's the social purpose of a firm...it goes something like, the role of a firm or a corporation is to find profitable solutions to world's challenges. And I like that because, after all, that's what companies are supposed to do in a capitalist society, which is to figure out how to create profit by solving something that is a challenge," Nadella said.
Transform talent with learning that worksCapability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More Nadella adds that this theory means these solutions created by businesses should be a good use of resources and subject to market forces. It also means that companies shouldn't be the ones creating problems for the world.
"The 2010s have taught us...sometimes you can find profitable solutions to some challenges, perhaps, but you can also create new challenges for the world, and you gotta get that balance right," Nadella said.
He said this book got him thinking about what the role of a firm in society is and what obligations it has to society, and how to go about that "mission."
He said in his mind, that starts with economic growth. And from his perspective as a the CEO of a company that makes software, he thinks software can help achieve that growth, and is luckily one of the most malleable resources.
"I do believe that software and digital technologies as a factor of production can absolutely be a driver of economic growth. It is the simplest way to think about this," Nadella said.
This ties into Microsoft's and Nadella's concept of "tech intensity" - the potential for its customers to grow by adopting technology and then building their own on top of it. Nadella has talked about this before, as Microsoft positions itself to be the provider of those platforms, tools, and training as traditional companies adopt new technologies.
He's compared it to electricity, which benefited all parts of the economy. He wants tech to have the same kind of impact, and for all companies to have access to computational power.
"The formula at least we think of for tech intensity is, you need essentially the grid to show up in every industry so that you are not reinventing, building your own power plant, you have the ability to have computation on the tap," Nadella said.
Nicholas Carlson contributed reporting to this story.
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