Speaking at the World Economic Forum in Davos, Switzerland, Gates challenged companies worldwide to work with governments and nonprofits to find ways to be charitable and solve the problems of the poorest people without sacrificing their own business needs.
"We have to find a way to make the aspects of capitalism that serve the wealthier people serve poorer people as well," he said, speaking via a webcast from Switzerland.
The idea of creative capitalism combines the "two great focuses of human nature -- self-interest and caring for others," Gates said. By keeping in mind business acumen, corporations can find new and innovative ways to solve major problems for 1 billion of the world's poorest people, who don't get enough food or don't have drinking water or reliable access to medication, which the rest of us take for granted, he said.
"This system driven by self-interest is responsible for incredible innovations that improve lives," Gates said. "But to harness this power to benefit everyone, we need to refine the system."
Gates plans to retire from full-time duties at Microsoft in July and devote most of his time to The Bill and Melinda Gates Foundation, the philanthropic organisation he runs with his wife.
Gates acknowledged Thursday that profits may not always be possible when companies try to serve the poor, so corporate leaders should change their thinking and not expect that they must make money from new business models around philanthropy. Rather, recognition for the good it does in the world should be enough for a company to take an interest in serving others, because that recognition also has business value.
"Recognition enhances a company's reputation, appeals to customers and attracts good people to an organisation," he said. "In a market where profits aren't possible, recognition becomes a proxy for profit."
In a question-and-answer period following his speech, Gates said that rather than having goals that are too lofty, companies should focus on the businesses they know -- whether food, drugs, media or technology -- to work with governments in developing countries to bring resources to the poor.
He cited an example of an unnamed Dutch company, sharing its rights to a cholera vaccine to provide the medication to Vietnam for less than US$1 a dose, as an example of a company leveraging its core business to bring much-needed resources to the developing world.
Gates also mentioned the Red campaign as an example of creative capitalism. The campaign, supported by companies such as the Gap, Motorola and Armani, was born out of a late-night bar conversation he had with Bono of the rock band U2, according to Gates.
The Red campaign gives portions of profits from products sold to raise money for disease treatment programs in Africa. Earlier this week, Dell and Microsoft said they will sell special crimson-red versions of the XPS line of computers as part of the programme. To date, Red has provided $50 million to a global fund for treating AIDS and malaria, and nearly two million people in Africa are receiving "life-saving" drugs today, Gates said.
Prior to the Dell announcement, Microsoft already had been putting Gates' idea of creative capitalism in practice through programmes such as "Unlimited Potential," which aims to promote technology skills and bring computers to emerging markets.
Business leaders are not the only ones who will have to change the way they think to put creative capitalism into practice, Gates said. Nongovernmental organisations (NGOs) also must be more open-minded about working with businesses to come up with new ways to serve the poor.