Alter: Bill Gates on Education

Buckle up! Bill Gates, wearing an expensive necktie and looking uncharacteristically formal, is now bringing the same high-speed, high-beam focus to American education that he once brought to computers and, more recently, to international aid. He called President-elect Obama last week and reports back cheerily that Obama "said all the right things" about including big money for education in the stimulus package and making fundamental school reform (not the fake kind pushed by teachers unions) a priority. Word is, Obama may even ask Gates to serve on a new high-level educational-advisory panel he's noodling, which would be quite a change for a guy who generally doesn't do committees. When I lumped Gates in with the "bomb throwers" on education, he chuckled and didn't disagree.

Before the school bell rings, a quick read on the economy from the man who, at last count, still had a larger net worth than the GDP of 120 of the world's 180 countries. "We're going to have a heck of a recession," he says, and he has no clue about its duration or depth. He's worried about a "negative feedback cycle" with lower production and unemployment feeding off each other. He laments that exports have fallen sharply over the last three months even though American goods are cheap. And he sees the auto bailout as nothing less than a shakedown by Chicken Little executives, noting that the British public wasted $16 billion bailing out Leyland before it died, anyway.

At the same time, Gates doesn't buy that the tech revolution is winding down. "Innovation and science are going at as high a speed as ever," he says, referring to breakthroughs with voice recognition, super Wi-Fi and pharmaceuticals. "Core research staff won't be cut, and that's why we'll come out the other side."

It's the longer-term outlook he's worried about. He sees that social inequities at home and abroad are harmful not just morally but economically, which explains his obsession with confronting the high-school dropout rate. Over time, he explains, a less equal world hurts everyone.

The Gates Foundation has learned some lessons from its investments in recent years in pathbreaking schools. The first big idea—to break up big schools into smaller, more manageable units—proved insufficient without major changes in personnel. Gates argues that rigorous accountability is the only option, from mayoral control (elected school boards are mostly a menace) to principal control (teacher tenure and onerous work rules are quality-killers) to data control (IT systems that closely track performance are a must).

Betraying his own professional background, Gates shakes his head in dismay at the idea of secondary schools and colleges trying to function at all without simple software that offers them basic statistical information about how students and teachers are performing over time (for-profit colleges are an exception). Everyone in education knows why: unions have simply prevented teachers from being judged, even in part, on whether their students improve during the course of the year. It's no surprise that Gates is a believer in merit pay and incentive pay and has little use for teachers colleges as presently constituted because there's no evidence that having a master's degree improves teacher performance. You never hear Gates or his people talk about highly qualified teachers, only highly effective ones.

Whenever he gets depressed about education, Gates says he visits one of the more than 60 KIPP schools nationwide, where the energy is palpable and the results irrefutable. He's also proud of his foundation's support for other innovative schools like the Green Dot schools in Los Angeles, Aspire Public Schools and Hidalgo Early College in California and the Noble Street Network in Chicago. At YES College Prep in Houston, 95 percent of the students are African-American or Hispanic and 80 percent are poor. But since 2000, every student has gone on to a four-year college. One hundred percent. Conventional schools with comparable demographics face dropout rates of more than 50 percent and send only a handful to four-year colleges.

So the challenge is not to find what works for at-risk kids—we know that by now—but how to replicate it. Gates's answer is to keep funding his reform ideas in five or six states to set an example of successful "effectiveness-compensation systems." He says Washington's job is to spread best practices and help implement accountability standards. Gates is right that there's "little appetite" politically for an increased federal role in education, which is mostly a state and local matter. But maybe he can expand that appetite by helping persuade Congress to fund proven models.

Gates does seem to be weighing in on Obama's pick for secretary of education. He favors choosing from today's exciting collection of hard-charging, china-breaking school superintendents. One of those he likes a lot is Joel Klein of New York City, which is ironic considering that, as a Justice Department lawyer in the 1990s, Klein almost succeeded in breaking up Microsoft.

Klein probably won't get the job. He has strained relations with Randi Weingarten, the new head of the American Federation of Teachers, and Obama has made it clear he doesn't want to pick a fight with the unions. But Obama also knows that if he chooses a union-backed candidate such as Linda Darling-Hammond, a Stanford professor active in the transition, he'll have a revolt on his hands from the swelling ranks of reformers. That's why it's more likely he'll settle on a superintendent like Arne Duncan of Chicago, Michael Bennet of Denver or Paul Vallas of New Orleans, any of whom would suit Gates and other reform-minded philanthropists just fine. (I have my money on Bennet, whose new compensation system is popular with Denver teachers, if not the union.)

Rep. George Miller, the leading voice on education in Congress, told me recently that "the debate is between incrementalists and disrupters, and I'm with the disrupters." So is Bill Gates. The father of disruptive software is ready for another revolution.