Image caption This year's World Economic Forum in Davos takes place amid a gloomy economy

This year's World Economic Forum (WEF) has kicked off with a debate on capitalism, which Bill Gates labelled a "phenomenal system".

"We're going through a tough period, but there is no other system that has improved humanity," the Microsoft founder told the BBC.

The future of the world economy is high on the agenda as some of world's most powerful people gather in Davos.

They meet annually in the Swiss resort to discuss the state of the world.

The WEF comes amid sluggish growth in the West versus soaring growth rates in emerging economies such as China and Brazil, and uprisings and protests across the globe.

The eurozone debt crisis also continues to disturb financial markets.

Before Davos, WEF founder Klaus Schwab had said: "Capitalism in its current form no longer fits the world around us."

Speaking in London ahead of his arrival in Davos, Mr Gates told BBC Radio 4's Today programme that "the world is better off" because of capitalism.

Media playback is unsupported on your device Media caption Bill Gates: There's no other system that has improved humanity than capitalism

"I think capitalism is a phenomenal system because it has generated so much innovation - the chance I had as a young boy to start Microsoft, hire my friends," he said.

"Other systems don't allow that to happen."

First debate

It was fitting that these concerns of the future of the world economy were reflected in the opening debate: "Is 20th-century capitalism failing 21st-century society?"

Referencing Winston Churchill, one of the panellists, David Rubenstein, co-founder of the private equity Carlyle Group, said: "Capitalism may be the worst form of systems, except for every other system."

The chief of the International Trade Union Confederation disagreed. Sharan Burrow said "we've lost a moral compass" and warned of social unrest.

She called for companies globally to invest 2-3% of real investment in the creation of jobs, or what she termed the "productive economy".

A distinction was also made between the economies of the US and Europe - dubbed "laissez-faire capitalism" - and state capitalism, where the governments of nations such as China and Russia take a big role in creating jobs.

Later, amid the heaviest snow in Davos in 66 years, German Chancellor Angela Merkel will provide the keynote address that will officially begin the WEF, scheduled for 16:30 BST.