'We Can Only Be Successful if the Community is Successful,' Microsoft President Says

January 17, 2019

Microsoft is committing $500 million to affordable housing in the Puget Sound region of Washington state. Brad Smith, president of Microsoft, explains the importance of facing the problem. Smith also calls for an end to the government shutdown.


Brad Smith: Well, here in Puget Sound,

Brad Smith: we're seeing something that we're seeing in

Brad Smith: a number of tech hubs across the country.

Brad Smith: Jobs have grown, people have moved in,

Brad Smith: but housing construction simply has not kept pace.

Brad Smith: So, we've seen big increases in housing prices,

Brad Smith: and what it has really caused

Brad Smith: is pressure on low and middle income families,

Brad Smith: they've been pushed out of these areas.

Brad Smith: If you're a teacher, a first responder,

Brad Smith: if you're somebody who works in

Brad Smith: the support area at a tech company,

Brad Smith: it's not uncommon to have

Brad Smith: three or four hours of time commuting every day.

Brad Smith: It's really sapping the vitality of our community.

Brad Smith: We recognize as a business,

Brad Smith: we can only be successful if the community is successful,

Brad Smith: we need new steps,

Brad Smith: we took a new step today.

Brad Smith: So, why do you think that job growth in that area has

Brad Smith: been consistently outgrowing housing?

Brad Smith: Well, I think to some degree,

Brad Smith: if you don't bring the community together,

Brad Smith: if you don't recognize you face a common problem,

Brad Smith: and if you don't fashion

Brad Smith: a coherent or comprehensive strategy,

Brad Smith: you end up digging a hole,

Brad Smith: and that in fact is what has happened here.

Brad Smith: Ah, we've seen very little money flow

Brad Smith: into the construction of middle income housing, uh,

Brad Smith: we've seen the money flowing to low income housing be

Brad Smith: distorted a little bit by

Brad Smith: the impact here of federal banking regulations,

Brad Smith: but a lot of this has to do with public policy.

Brad Smith: What we announced today was not

Brad Smith: only $500 million dollars from Microsoft,

Brad Smith: but commitments from nine mayors of

Brad Smith: important cities to address issues like zoning,

Brad Smith: making public land available for lower income housing,

Brad Smith: addressing a number of laws that impact construction.

Brad Smith: You've got to look at all of this,

Brad Smith: you've got to bring it together.

Brad Smith: That's what I hope will now

Brad Smith: start to do here in Puget Sound.

Hope King: Yeah. I love it. I love, um,

Hope King: the intention here of- of what Microsoft is trying to do.

Hope King: Um, you know, your other neighbor in Seattle, Amazon,

Hope King: if you take a look at the impact too of

Hope King: that company on the economy in Seattle.

Hope King: I mean over the last nine years or so and-

Hope King: and adding about 40,000 employees in Seattle since 2010.

Hope King: Uh, the housing prices and

Hope King: the rent prices have soared

Hope King: 80 percent when it comes to buying homes,

Hope King: rent growing is 70 percent,

Hope King: um, partially it is investing in the ability

Hope King: to live in lower income or at least lower cost housing,

Hope King: but it's also about the jobs.

Hope King: I mean Amazon just moving into New York,

Hope King: now you guys are- are offering very high paying jobs,

Hope King: it's- it's that that's also propping up the prices.

Hope King: What about investing in- in jobs that are

Hope King: in that middle tier that are being- being erased?

Brad Smith: Well, we create a lot of jobs, uh,

Brad Smith: Microsoft does, lots of other companies do, ah,

Brad Smith: and we, you know,

Brad Smith: create jobs based on the compensation of the market.

Brad Smith: So, for hiring somebody who's a computer scientist,

Brad Smith: somebody who's got a AI skills,

Brad Smith: a data scientist, you know,

Brad Smith: we're going to pay more,

Brad Smith: and of course by definition we're going

Brad Smith: to create the jobs that we need.

Brad Smith: We all have lots of other jobs too.

Brad Smith: There are the people who drive our shuttles,

Brad Smith: who work in our cafeterias,

Brad Smith: who clean the buildings,

Brad Smith: who do all kinds of important work.

Brad Smith: So, no business has high paying jobs alone,

Brad Smith: but I think more broadly than that.

Brad Smith: When companies grow, schools need to grow,

Brad Smith: police forces need to grow,

Brad Smith: uh, and ultimately housing needs to grow.

Brad Smith: I think it just really is, uh,

Brad Smith: an opportunity for us all to step back and say, you know,

Brad Smith: we're all in this together,

Brad Smith: you really need a healthy community.

Brad Smith: A healthy community needs to have room for everybody to

Brad Smith: live from all economic backgrounds.

Brad Smith: A school where the teacher has to drive

Brad Smith: for two hours before walking into

Brad Smith: the building is not likely to be as

Brad Smith: successful as a school where

Brad Smith: the teacher lives half a mile away.

Brad Smith: Absolutely. Brad, on a more macro economic scale

Brad Smith: right now for jobs,

Brad Smith: a lot of people being impacted by

Brad Smith: the government shutdown especially federal employees,

Brad Smith: federal workers, uh, you're actually up

Brad Smith: for a major contract with the Pentagon as well.

Brad Smith: Are you worried about the deal's future

Brad Smith: given the current government shutdown?

Brad Smith: Well, we're not worried about

Brad Smith: the specific deal for lots of reasons

Brad Smith: including the fact that the Pentagon is

Brad Smith: actually one agency that's open,

Brad Smith: but we absolutely do worry and we do care as we think

Brad Smith: everybody should about the importance

Brad Smith: of getting our government re-opened.

Brad Smith: You can debate how much harm it's doing to the economy,

Brad Smith: one thing is indisputable,

Brad Smith: it's not helping to have the government closed.

Brad Smith: There are companies that are not going public,

Brad Smith: there are companies that are not

Brad Smith: bringing products to the market.

Brad Smith: This is not good for this economy especially at

Brad Smith: the same time that the UK is dealing with

Brad Smith: another round of Brexit issues,

Brad Smith: at a time when Chinese economic indicators

Brad Smith: were not as positive in December.

Brad Smith: We need our political leaders to come together,

Brad Smith: get this government reopened,

Brad Smith: pay the people who are keeping our airports safe,

Brad Smith: and get this economy firing on all of its cylinders.

Hope King: On this contract, not everybody

Hope King: inside of Microsoft according

Hope King: to multiple reports are happy,

Hope King: uh, about the deal.

Hope King: You're seeing a lot of employees inside of

Hope King: big tech companies feeling empowered to speak out.

Hope King: How is Microsoft dealing with it?

Hope King: Maybe the, ah, the divide between what upper management

Hope King: wants to do and what employees feel

Hope King: like they want to build toward?

Brad Smith: Well, I would say first of all I think

Brad Smith: the vast majority of employees

Brad Smith: have made pretty clear that they're

Brad Smith: comfortable with the direction we're taking,

Brad Smith: but I think that

Brad Smith: the voices even of people who disagree are

Brad Smith: important for us to listen to

Brad Smith: because they help us think more broadly.

Brad Smith: So, clearly we need a country here in

Brad Smith: the United States where

Brad Smith: the best technology goes to the country's defense,

Brad Smith: but at the same time

Brad Smith: new technologies are creating a new generation of issues,

Brad Smith: ethical issues, broader policy issues.

Brad Smith: One thing we've said is,

Brad Smith: we are committed to providing

Brad Smith: our technology to the United States military,

Brad Smith: and we are also committed to thinking hard and

Brad Smith: engaging very actively in public discussions.

Brad Smith: We need a new generation of

Brad Smith: ethical rules for the military,

Brad Smith: for law enforcement, and we want to be part of that,

Brad Smith: and at times it will require new laws and

Brad Smith: regulation as we have proposed,

Brad Smith: for example for a technology like facial recognition.

Brad Smith: I think more than anything else what

Brad Smith: our employees appreciate is that

Brad Smith: we're not just selling products and stopping there,

Brad Smith: we are thinking and we are participating.

Brad Smith: Also interested in providing

Brad Smith: your technology to new partners like Walgreens.

Brad Smith: When you think of health care,

Brad Smith: where do you prioritize

Brad Smith: that from Microsoft's perspective?

Brad Smith: Well, it's not as if we

Brad Smith: live in a world where we say, "Gee,

Brad Smith: do we want to make people healthy or do we want to keep

Brad Smith: the country strong and- and safe."

Brad Smith: The good news is we can afford to do both,

Brad Smith: we need to do both,

Brad Smith: we're large enough that we have plenty of people

Brad Smith: focused on doing both of those things and many others.

Brad Smith: What it really reflects is every part of

Brad Smith: the economy is being impacted by technology,

Brad Smith: it is transforming the way people work,

Brad Smith: the way people do business.

Brad Smith: The companies that deploy technology the fastest in

Brad Smith: our view are going to have

Brad Smith: the biggest opportunities for sustained economic growth.

Brad Smith: Our business is to create the products and provide

Brad Smith: the people that can put that to work in a positive way.

Hope King: What is Microsoft sales strategy?

Hope King: We joke around here that

Hope King: maybe the only thing you guys want to say

Hope King: when you walk into a potential partner

Hope King: is we're not Amazon.

Brad Smith: Well, we better say a whole lot more than that.

Brad Smith: Uh, you know, the people understand that we are

Brad Smith: focused on our business and

Brad Smith: then helping their business succeed,

Brad Smith: they understand that we're not

Brad Smith: interested in competing in their business.

Brad Smith: That does perhaps get you through the front door,

Brad Smith: but at the end of the day it's fundamental-

Brad Smith: fundamentally about showing people

Brad Smith: where technology is going,

Brad Smith: where artificial intelligence is going,

Brad Smith: and how they can deploy that to create better products,

Brad Smith: to provide better customer service,

Brad Smith: to bring down prices for their customers.

Brad Smith: You know, ultimately, we have

Brad Smith: a pretty clear simple mantra, clear mission.

Brad Smith: You know it's all about using technology to

Brad Smith: help other people benefit,

Brad Smith: and that does give us a focus that's pretty singular,

Brad Smith: and I think our customers do appreciate that.

Hope King: Amazing stuff Brad. We never have enough time for you.

Hope King: Thank you so much for joining us today on Cheddar.

Hope King: Brad Smith is the president of Microsoft.

Hope King: Please say hi to Frank and the rest of the team.

Brad Smith: [LAUGHTER] We will. Thank you