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Remarks to Business Executives for National Security Dinner

Thank you all so much for being here. So many great friends, so many great patriots, so many great public servants, so many people that I have served beside.

Norty, Susie who just walked in. Special friends, Norty and I, did a lot for a long time in Iraq, in Afghanistan, many other things. So wonderful to see you all. Bruce, also, thank you. And to all of you for the important work that BENS does. I also want to thank you for honoring the contributions of Hospital Corpsman First Class Wayne Papalski, and all of our extraordinary medical personnel. And just to single out one other person, Jim Clapper. Jim, thanks for being here brother, I appreciate it. Jim and I have worked together for a long time, too. Thanks for taking the time. And all the rest of tonight’s honored guests.

It’s nice to see Dr. Monique Maldonado. Monique, where are you? Stand up, Monique, please. Air Force Master Sergeant Maldonado was one of my enlisted military assistants when I was Deputy Secretary of Defense, and she earned her PhD while serving in my office. So, Monique has already served her country in uniform, and she continues to contribute to this nation’s well-being as a business owner and BENS member. Great to see you, Monique, so proud of you.

Another friend, my fellow honoree, Bob Belfer. Bob, Renee, congratulations. Congratulations, Bob, It’s a privilege for me to share this podium with you, to be Director of what subsequently became the Belfer Center at the Harvard Kennedy School of Government. Bob’s long been a champion for international peace and stability, and to help promote both, he has built bridges, between business and the academy, between science and international affairs, and between business and the government, particularly the national security sector.
Bob, thank you. And all the other distinguished guests here who honor the idea behind this great institution which I’ve known for a long time, and about which I want to say a little bit more.

Every one of you continues that tradition of Bob Belfer. President Dwight Eisenhower once said, quote, “It is the wisdom, the forward-looking capacities of our businessmen” – probably, today, he’d say businesswomen, too – “who make America, and keep America, the healthy, economic organism that will bring the happiness and progress to our people.”

And he might have said security as well. Monique, Bob, and all of you here in this room – Jim – thank you for doing just that.
But through BENS you also help all of us in government apply best business practice solutions to some of America’s most pressing security challenges. And those solutions are important as ever, as we enter what is a new strategic era. Indeed, today’s security environment is dramatically different from the one we’ve had for the last 25 years.

Today, we face no fewer than five major, immediate and evolving challenges: countering the prospect of Russian aggression and coercion, especially in Europe; managing historic change in the vital Asia-Pacific region; strengthening our deterrent and defense forces in the face of North Korea’s nuclear provocations; checking Iranian aggression and malign influence in the Gulf; and accelerating the defeat of ISIL in its parent tumor in Iraq and Syria and everywhere it’s metastasizing around the world.

Earlier this week I testified on our 2017 budget, which will help ensure DOD can continue to meet those challenges. And, on Friday, I returned from a long and productive trip where I was able to see how we’re doing so. I traveled to India, the Philippines the South China Sea to strengthen the regional security network, in which American military power has played a pivotal role for 70 years, ensuring continued stability in the Asia-Pacific so that everyone in that region can continue to rise and prosper.

Then I traveled to the Middle East, where I conferred with our commanders, visited our troops, and met with officials in Baghdad, and Abu Dhabi, and Riyadh, focused on how we are accelerating our campaign to deliver ISIL a lasting defeat and to check Iran. And next week I’ll be in Germany to meet with European allies and the troops who stand alongside them.

I not going to talk about any single one of these challenges tonight. We don’t have the luxury of choosing among the challenges of this complex world. But we do have the ability to set the course for the future: a future that’s uncertain but will surely be competitive and demanding of America’s leadership, values, and military edge. Even as we fight today’s fights, we must also be prepared for what might come 10, 20, or 30 years down the road. That’s why a theme of my time as Secretary of Defense, and of the pivotal FY17 budget I just submitted, is that DOD has to innovate for the future, and think outside of our five sided box, to be competitive in a competitive world.

And tonight, I want to talk about three principal areas where we’re doing that – technology, and people, and reform.
One of my core goals as Secretary of Defense is to build, and in some cases to rebuild, the bridges between the Pentagon and the innovative business community that makes up one of America’s greatest strengths. And as I’m building bridges from the DOD side, I know BENS is building from the other.

Our men and women in uniform operate in an increasingly competitive and changing world – particularly when it comes to technology. Now, when I began my career, most technology of consequence originated in America, and much of that was sponsored by the government, particularly the Department of Defense. Now, today, we’re still major sponsors, but much more technology is commercial. And the technology base is global.

Indeed, technologies once possessed by only the most formidable militaries have now come into the hands of previously less-capable militaries, and even non-state actors. Meanwhile, nations like Russia and China are modernizing their militaries to try to close the technology gap.

So to stay ahead of those challenges, to stay the best, and to keep our edge, we’re investing aggressively in innovation. Our budget invests nearly $72 billion in R&D – more than double what Apple, Intel, and Google spent on R&D last year combined. That funding goes towards priorities like making DOD a leader in cybersecurity, and advancing our commanding lead in undersea capabilities, I see, by the way, Jon Greenert, thanks for being here, John. It involves advancing artificial intelligence, autonomy, robotics and biotech. It enables taking long-existing systems and giving them surprising new capabilities. And it invests in new strategic approaches to preventing and winning conflicts against 21st century threats.

In all these areas, we’re drawing on the historic links between industry, government and academia that have done so much for both our security and our society. It was Eisenhower’s vision that led to the creation of DARPA, helping to bring about so many remarkable innovations such as the internet, GPS, and spurring further innovation in jet engines and communications satellites in the further past.
Today, we’re building on that success, and investing in further partnerships with our nation’s innovative private-sector and technology communities – in places like Boston, Silicon Valley, Austin, Seattle, Northern Virginia, and America’s many, many other great hubs of globally unrivaled innovation.

We established a path-breaking innovation hub in Silicon Valley, what we call Defense Innovation Unit-Experimental, or DIUx – essentially an outpost of the Pentagon on the west coast – to help broaden the range of great companies we work with. We’ve launched and funded manufacturing innovation institutes across the country to advance emerging technologies like flexible hybrid electronics, which will make it possible to seamlessly print lightweight, flexible structural integrity sensors right onto the surfaces of ships and aircraft - or revolutionary textiles, which combine fibers and yarns with things like circuits, LEDs, solar cells, electronic sensors, and other capabilities to create fabrics that can see, hear, sense, communicate, store energy, regulate temperature, monitor health, change color, and much more.

And as we make investments to keep our long-term edge, we’re also investing to help maintain our advantages now, through the Strategic Capabilities Office. I created this office in 2012 when I was Deputy Secretary of Defense to help us to re-imagine existing DOD and intelligence community and commercial systems by giving them new roles and game-changing capabilities to confound our enemies. SCO has been a tremendously useful part of DoD, with projects that include taking the same kinds of micro-cameras and sensors you find in a smartphone and putting them on our Small Diameter Bombs to augment their targeting capabilities, or using 3D printed swarming, autonomous micro-drones that can fly through heavy winds and be kicked out the back of a fighter jet moving at Mach 0.9 or they can be thrown into the air by a soldier in the middle of the desert.

There’s also a SCO project that we’re calling the arsenal plane, which takes one of our oldest aircraft platforms, and turns it into a flying launch pad for all sorts of different conventional payloads.
So all that, we’re doing.

But as good as America’s technology is, it’s nothing compared to our people – they’re the reason why our military is the finest fighting force the world has ever known. And in the future we must continue to recruit and retain the very best talent. That’s why we’re building what I call the Force of the Future, to ensure that amid changes in generations, technology, and labor markets, we’re always postured to bring in, develop, and retain the best young men and women that America has to offer in what is an all-volunteer force

As part of that, we’re implementing several new initiatives to give some of our own people, military and civilian, the opportunity to get out and to learn about how the rest of the world works outside of our walls. One way we’re doing this is by expanding and broadening the Secretary of Defense Corporate Fellows program, including by opening it up to qualified enlisted personnel.

Another example is the Career Intermission Pilot Program, which lets people take a sabbatical from their military service for a few years while they’re getting a degree, or learning a new skill, even starting a family.

We’re also looking for ways to allow more of America’s brightest minds to contribute to our mission of national defense. We’re bringing in resident entrepreneurs, who will work with senior leaders on challenging projects for a year or two.

And we’re going to hire a chief recruiting officer to bring in top executives for stints in civilian leadership roles, in the mold of people like Dave Packard, co-founder of HP, who also served as Deputy Secretary of Defense, and one of the people with whom I was first associated in this business.

Meanwhile, I’ve also created a new Defense Innovation Board to advise me and future Defense Secretaries on how to continue building bridges to the technology community, and on how the Department can continue to change to be more competitive. I’m very pleased that Eric Schmidt, from Google’s parent company, Alphabet, has agreed to chair the Defense Innovation Board for me, and I hope we’ll see some innovators from some your companies on that board as well.
We’ve also created the new Defense Digital Service, which brings in coders from companies like Google, and Palantir, and Shopify for what we call a “tour of duty.” These are talented people who come in to DOD just for a year or two, or a project, and make a contribution to us, to our mission, and get to be part of something bigger than themselves.

And they’ve solved some really important problems for us…one example being improved data sharing between DoD and the VA—and Sloane Gibson, thank you for being here, by the way--to make sure our veterans get access to their benefits.

Most recently, they’ve helped us invite vetted hackers to test our cybersecurity under a unique pilot program called “Hack the Pentagon.” This is similar to the bug bounties that several of America’s leading tech companies have. They do this all the time, and we learned it from them and it’s the first one ever in the entire federal government. And why does this matter? What it’s doing is it’s using the good guys, the white-hat hackers, to help you test your system, rather than having to learn lessons about the vulnerability of your system from black hatters, which is the bad way to do it.

It’s a practice very common in commercial industry, we’ve adopted it, it’s an example of how we can learn from those outside, make ourselves better.

We’re taking a variety of new steps to use 21st Century data and technology to improve and modernize our talent management systems. Let me highlight just a few. We’re launching LinkedIn-style pilot programs to help give servicemembers and units more choice in matching up future assignments. We’re creating an Office of People Analytics to leverage big data to inform our personnel policies.
And to help us keep bringing in the best people, we’re looking at ways to evaluate recruit performance, improve outcomes, understand issues with retention, and better analyze trends that if left unchecked could indicate or lead to our military’s insularity from the rest of our society, which we don’t want.

We’ve also opened all combat positions to women, to expand our access to 100 percent of Americans who meet the standards for our all-volunteer force. And we’re strengthening the support we provide to military families in order to improve retention – extending maternity leave to 12 weeks and paternity leave to 14 days, expanding childcare to 14 hours on our bases, covering the cost, in a pilot program, of freezing sperm or eggs for active-duty servicemembers, and giving families the possibility of some, some geographic flexibility in return for additional commitments.

We do all this with a very practical eye to the effectiveness of the force. Yes, it’s about fairness and all that too, but it’s really about what’s in our interest. Our force, I’ll remind you is a family force, is a married force. Seventy percent of our officers are married, more than half of even our enlisted are married. Think about that as a statistic in America’s demography today. We have a married force, so we have to pay attention to that when we try to keep our best people with us, and we do.

Throughout this process, we’ve always been mindful though, that the military is a profession of arms. It’s not a business. We’re responsible for defending the country – for providing the security that allows our friends and family members and fellow citizens to go to school, go to work, to live their lives, to dream their dreams, and to give the next generation a better future.

The key to doing this successfully is leveraging both tradition and change. While the military cannot and should not replicate all aspects of the private sector, we can and should borrow best practices, technologies, and personnel management techniques in commonsense ways that work for us, so that in future generations, we’ll keep attracting people of the same high caliber we have today – people who will meet the same high standards of performance, leadership, ethics, honor, and trust we hold our force to today. And there’ll be more to come in this area.

Finally, our military must always be capable enough to deter even the most advanced future threats in a changing and competitive world. And this means that just like competitive companies represented here in this room, we have to innovate and seize opportunities in everything we do.

Just as the companies here are constantly restructuring and reevaluating their approaches to their competitors, we too at the DoD are, have to, do the same, making our contingency plans and our operations more flexible and more dynamic in every region.
And just as your companies continually seek greater efficiency to benefit both their customers and their shareholders, we in DoD are pushing Congress for much-needed reforms across our enterprise – from acquisition reform, to closing bases that we don’t need, to reducing overhead like oversized headquarters – so that taxpayer dollars will be spent more wisely, and our troops get everything they need to succeed, win, and come home safely.

As a learning organization, the U.S. military and the Defense Department has a long history of striving to reform our command structures and improve how our strategies and policies are formulated, integrated, and implemented with an eye towards the future as we continue to address the challenges of today.

General Eisenhower, even as he was still fighting in Europe, military leaders and policymaking officials were laying the groundwork for what would be the National Security Act of 1947, which would establish the position of the Secretary of Defense, the Joint Chiefs of Staff, and the National Security Council. Later reforms, particularly during President Eisenhower’s Administration, strengthened the Office of the Defense Secretary and gave new authorities to the Chairman of the Joint Chiefs of Staff.

And years later, it was the Goldwater-Nichols Act, enacted 30 years ago this fall, that solidified the chain of command from the President to the Secretary of Defense to the Combatant Commanders, codified the role of the Chairman of the Joint Chiefs of Staff, and reinforced the concept of jointness.

Now, I recently proposed several practical updates to this critical organizational framework, while still preserving the spirit and intent of the Goldwater-Nichols Act and the reforms which preceded it. These include changes to take into account the need for transregional and transfunctional integration and advice, that is, professional military advice; clarifications to the role and authority of the Chairman in order to increase our agility as an organization, aggressive streamlining of combatant command headquarters, and reforms to the acquisition process.

These reforms will help position the Department of Defense to meet the many challenges of the future, and are a critical part of fulfilling the responsibility I have to all my successors – to ensure the military and the Defense Department they inherit is just as strong, if not stronger, than the one I have the privilege of leading today.

Now let me ask you to take a moment and think that right now, as I stand here, there are more than two million men and women serving and defending our country, right now, in every time zone, in every domain…in the air, ashore, and afloat. Their operations and missions are important to American security, American prosperity, and American values, but they’re just as important to security, prosperity, and values of so many around the world.

Security, it’s said, is like oxygen…when you have enough of it, you pay no attention to it. But when you don’t have enough, you can think of nothing else. American servicemembers, like Hospital Corpsman First Class Papalski and Dr. Monique Maldonado before him, provide the oxygen … the security that allows millions upon millions of people, not just in America, but in so much of the world, to be safe, to raise their children, to dream their dreams, to live lives that are full.

Our soldiers, sailors, airmen, and Marines take grave risks to provide that security, and some make, of course, the ultimate sacrifice. They do so not just because they were ordered to. They do so not only because they want to protect their buddies. They do so, as Eisenhower said, to “defend a way of life.”

That’s a way of life many of you have spent your lives ensuring and defending. I know Bruce, Norty, Bob, Monique, Wayne, many of you…do so every day, to this day. I thank you for that dedication. But we’re not finished yet. We have work still to do.

With this award and with Eisenhower’s example, I will spend the time I have to invest, to innovate, and to build bridges so we can continue to meet the challenges we face today and those we may face in the future; as well as to grab hold of our great nation’s many bright opportunities. I’m glad you and BENS will be standing beside me.

Thank you so much.