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Deputy Secretary of Defense Dr. Kathleen Hicks Remarks in a Fireside Chat at the Special Competitive Studies Project's Virtual and In-Person Global Emerging Technology Summit

(UNKNOWN):  It's my distinct honor to introduce our next speaker, Dr. Kathleen Hicks, the U.S. Deputy Secretary of Defense.  Deputy Secretary Hicks has made technology a critical priority in the department and plays an integral role in leading the department forward.  She will be joined by Ylber Bajraktari, Senior Advisor to SCSP, for our next discussion. 

Please join me in welcoming Deputy Secretary Hicks.


YLBER BAJRAKTARI:  Ma'am, if that's ...


OK.  Good afternoon, everyone.  Hey, good afternoon, Dr. Hicks.  Thank you very much for joining us.  It's great to have you here.  I know you have a very busy schedule so I appreciate you taking the time to come and talk to us.

This is your third time at the Pentagon, for an impressive career of nearly 20 years in public service.  So appreciate your service.  You came to the Pentagon this time, I think, very focused on the - what the National Defense Strategy has called the “pacing challenge,” which is China.  But then about a year into your tenure, this February, we had the Russian aggression of Ukraine.

So I was wondering if you could maybe perhaps start us off by just giving us your sense of the latest in Ukraine and then where do you think the department is on the pacing challenge of China?

DEPUTY SECRETARY OF DEFENSE KATHLEEN HICKS:  Sure.  First of all, thanks very much for having me and thank you for hosting such an important conference on issues that we care about a lot at the defense department.

So let me start first on how we think about Russia and China, and then kind of go through the Ukraine and China pieces.

In our National Defense Strategy, we've referred to Russia as an acute threat, and I think this Ukraine crisis really demonstrates every aspect of that, "acute" meaning it can be sharp and near term and potentially more transitory than the pacing challenge that is China.

So on Ukraine, itself, we obviously have seen really tremendous Ukrainian gains in the last week or so.  I think where we have seen advantages to Ukraine it is due to many factors most centrally, of course, the Ukrainians themselves.  But also it has to with the fact that there's a strong coalition.  The U.S., NATO and others who are standing up for countries protecting their sovereignty who are saying that the rules of the international order do apply.

And countries like Russia should not be attacking their neighbors and there are consequences when you do so.  I think what we're seeing in Ukraine is the ability of that community of nations to stand together economically, despite hardship, in terms of security assistance, of course, and other kinds of economic and humanitarian assistance to the Ukrainian people.

Let me switch over to the pacing challenge of China.  China we see as the country that can bring together a comprehensive suite of power.  It has the greatest potential for that and over the longest period of time.  That's economic, technological, of course, military power, information capabilities.  And that's why we think of it as a pacing challenge.  In many areas of warfare, not all, but most areas of warfare, China presents the hardest target, the most advanced capabilities.

And if we want to be able to protect U.S. interests we have to be taking those capabilities into account in how we develop our own approach.  And that's what we're really about.  We're about deterring aggression, we're about creating stability to protect U.S. interests.  We're not about seeking out warfare conflict with the CCP.

But what we see today is, and we have seen over decades really, is the growth of Chinese military capability.  And now we see that really combined with some activity that is very worrisome to the U.S. That's the pacing challenge issue.

How are we doing on that?  We are laser-focused on it.  We've always had to look at multiple challenges at the same time, so it's not for unusual for us to both have this focus area around, in this case, China and the PRC.  We have at the same time, of course, in Ukraine the necessity, importance, and intent and capability to look at those issues as well.

So we're able to do both of those at the same time and happy to talk a little more about our approach on China, as you like.

MR. BAJRAKTARI:  OK.  Great, thank you, Dr. Hicks.  You've placed a heavy emphasis on tying resources to strategies.  And as you laid the strategic environment and the competition that you have between Russia and China, how is that being reflected in the decisions you’re having to make within the department in terms of resources and where you best allocate them?

DR. HICKS:  Sure.  So in our base budget and right now it's the President's budget request for 2023, we are very much focused on that pacing challenge of China.  We do pay attention to, as I mentioned before, there are some areas where Russia is a pacer.  Undersea warfare would be a really obvious one. In our nuclear triad, recapitalization. We, of course, are thinking about Russia as well as China.  So there are some exceptions.

But our budget is really built out against those pacing challenges.  When it comes to assistance to Ukraine, we are developing that outside of the defense budget, and it's -- in both cases, we have the advantage of significant bipartisan support both for assistance to Ukraine and in terms, of course, of a bipartisan coalition strongly around -- focused on the U.S. maintaining an ability to deter, and if necessary, fight and win in any kind of conflict that China might put forward that threatens our interests. 

So that's sort of where we've been able to manage the budget.  The real resource tradeoffs that we face are not exactly that, they are about how we keep our focus on China over time.  China today, China for the 2027 timeframe, China for the 2035 timeframe and for the 2049 timeframe. 

And as we have to follow that arc and look at that arc of our own capabilities, force design in the far-term, force development in the mid-term and being ready to fight today, it does mean tradeoffs in other kinds of capabilities. 

So where we are making those resource tradeoffs they're in areas like fourth generation aircraft, they're in areas like any kinds of let's say surface combatants that aren't survivable.  Those are places where we have to take more risk, even in, say, our ISR capabilities that aren't particularly well suited to non-permissive environments.  Those are the kinds of tradeoffs that we're making. 

MR. BAJRAKTARI: OK, great.  Your budget this year -- your budget submission places a heavy emphasis on R&D.  And I know innovation is one of your priorities.  Are you satisfied in terms of where the department is and is moving in R&D? 

DR. HICKS:  We have the largest -- in the '23 budget request, the largest R&D request we've ever had.  And I am satisfied that we have selected the right areas to go after, based on the strategy.  

Generally speaking, I'm quite confident that we've done a very rigorous job of tying the resource request that we've put forward to Congress to the strategy, and we're in the midst of the build for the '24 budget right now, we're doing the same thing.  

And it really is, as I said, looking at this how do we think about China today in the mid-term and the future, while still, of course, being attentive to areas we need to look at with regard to Russia, counter-VEO or some other areas. 

So I am satisfied with that tie.  We can't control, if you will, any of us, this is the conundrum, where innovation goes, how it develops, where the breakthroughs come from.  And so what we have to do in the defense department is make sure we have an ecosystem for innovation that's as vibrant as possible. 

That means we have to look very much outside the department as well.  So those federal R&D dollars, they're going into all kinds of partnerships and collaborations, and connections, allies and partners, the non-profit and research community, the commercial sector -- and we want to really make sure we're opening up all those avenues so that we can have the best shot at those federal dollars actually returning outcomes for the war fighter. 

I can just add one more piece to that, part of that innovation ecosystem that's so important for us is making sure we are experimenting and then shifting into production capability. 

So it's not just the R&D dollars in the right tech sectors, it's about going after the right operational problems and making sure we have a culture of innovation that brings together operators, intel analysts, and technologists routinely.  And then as I said, that we have the acquisition tools and the trust of Congress to convert that into production. 

MR. BAJRAKTARI:  Great, thank you. 

If I may follow-up on the issue of the innovation ecosystem industry more broadly, are you satisfied in terms of where the relationship is between the department and the industry writ-large?  Is the private sector stepping up to help the department solve some of these challenges?  And is the department on the other hand, making it easier for the private sector to work with the department? 

DR. HICKS:  I think the private sector is absolutely stepping up.  I think if I snapshot where we are today, I'm very fortunate to be at the department at a time when -- as I travel around the country, or again, internationally, the doors appear quite open to working with the department. 

There is a desire to protect a democratic way of life, we have a values-based approach to how we think through the use of technology and the other tools of warfare.  We've led in areas like responsible AI, et cetera.  And I think we also have demonstrated that we understand the need to pull the commercial sector in, and again, the research sector in.  So, I think those are all really good signs. 

On our side, we're really hard to work with, and that's been true for a very long time.  And multiple teams of people have come through to try to make that better.  Do I think we're better today than, again, maybe five years ago?  Absolutely.  I think we have more tools, I think the culture changes have been important. 

Do I think we are where we need to be?  No.  And a lot of that, again, is cultural change.  It just is going to take a substantial amount of leadership and drive, and the incentives in the right place to keep pushing the system to really fire that ecosystem. 

The United States has so many advantages for us to use.  I find sometimes people seem quite forlorn, they seem to long for civ-mil fusion in the Chinese sense, that's not the right model.  We've got the right model. 

The question is, can we fire up that model?  And that's where I think there's a lot of opportunity. We've got to excite that opportunity, we've got to access it.  And we need to get our partners over on Capitol Hill to have faith that we know how to do this so that we can move forward. 

MR. BAJRAKTARI:  OK, great. 

Staying on the innovation theme, Dr. Hicks, you placed a heavy emphasis on innovative operational concepts.  Are you satisfied in terms of where the department is with these concepts, in terms of their design and submission for your review?  And specifically, on China, are you confident that DOD has a plan in place that in the event of a crisis would lead the United States to prevail? 

DR. HICKS:  So, I just want to parse this a little bit.  You said plan and you said concepts, and I want to separate those a bit.  We do a lot of really good planning, I think our planning is progressing very well, I give a lot of credit to the INDOPACOM commander for doing some great work, along with a lot of other combatant commands that are linked up together to think through planning, operational concepts. 

We do have the joint war fighting concept, I came in the door when we were at 1.0, we have passed through 2.0 and we are rapidly approaching 3.0.  I think we have taken a smart evolutionary approach to ensure that we’ve really teased out a lot of the challenge sets we want to.  We have to ask some hard questions to make sure that we get out of a group-think mindset, a lot of gaming and simulation, et cetera goes into that. 

So, I do think we have a pretty strong set of principles and approaches, which I will not get into, as you might imagine.  Now the question is, how do we take that, as I said before, and translate it from the paper of concept development into experimentation and exercise, all the way through to the DOTmLPF for this to live our world into the doctrine and the people and the materiel and everything we need to execute on those concepts. 

I do think we are down a strong path on that.  And it was one of the areas I was most worried about coming in.  We have to continue to incent good concept work over time.  We will learn things.  Technology will evolve.  Our approaches will evolve.  And we have to be ready to seize those opportunities.  So I don't see it as a fixed point in time on operational concepts, quite the opposite.  I think we had some good strong principles, understand what the operational challenges are, which themselves will change over time, that an adversary can pose, and make sure we're taking advantage of our asymmetries and shoring up -- mitigating our risks wherever we can. 

MR. BAJRAKTARI:  OK.  Great.  In February, Dr. Hicks, you directed the establishment of the Office of Digital and Artificial Intelligence. 

DR. HICKS:  Yes. 

MR. BAJRAKTARI:  Officer, the CDAO.  I was curious if you can tell us where you are in terms of the progress that CDAO has made so far and where do you see -- what do you see as the next milestones in this process?  I know you -- you've elevated now those responsibilities at your level and Secretary Austin's, and you've also consolidated some of the previous functions.  So I was just curious if you could give us a sense of progress to date, and then milestones coming up. 

DR. HICKS:  Sure.  So CDAO is a new organization but it's an organization built on -- there are building blocks that preceded it.  One of the things we wanted to do when we came in as we took stock, is figure out where the state-of-the-art was on the commercial side for many of the things we were trying to do.  We saw that the department was really struggling with data.  We saw -- which is itself a whole conversation we can have.  We saw that AI, of course, vital, not progressing particularly quickly and really reliant on the data piece, and those pieces weren't naturally coming together across organizational divides.  And we saw some really creative approaches going on at the time with our Defense Digital Service that needed to be brought forward to scale across some of those approaches to really scale across the breadth of the department. 

And as we looked at the commercial sector, did a couple of studies, it was clear that a model like what we now have at CDAO was the much more common approach for now.  So that's what we did.  We brought those pieces together so the data and the AI really build as a stack.  You know, Craig Martell, our CDAO, you know, talks about he has a Maslow's Hierarchy of Need version and it really starts with the data.  You have to start with the data.  And how do we ask -- you know, certainly the Chinese have started with the data.  You have to be thinking through how we access all of that.  And that matters everywhere from the boardroom all the way out to the edge -- tactical edge.  And so we're worried about this all the way across that. 

So CDAO has stood up.  It’s brought those pieces together.  I think they're making tremendous progress again on the boardroom piece, which matters for things like making sure taxpayers get their money worth out of the department.  Making sure we can do things like find inventory easily.  That matters.  Ukraine is a great example.  That kind of matters if you want to know where all your, let's say, munitions are and where the risk levels are in terms of what you transfer and things of that sort. All the way, as I said, to the tactical edge on JADC2. 

So CDAO plays a vital role in thinking and pulling together the data requirements across the department, in staffing up the data analyst pool, and we are doing a lot of federated approaches. Our ADA initiative is a way to bring AI and data advantage out to the edge with the COCOMs, so we're sending out skilled practitioners in data and AI to COCOMs to help them. 

We have, for instance, EUCOM as I just mentioned, we're doing quite a bit with them on the Ukraine crisis.  We did quite a bit around operation Allies Welcome in terms of data around the Afghan problem set.  So we're increasingly using CDAO in those ways. 

The most important outcome metric for them right now among all the other things that I've just mentioned is the data integration layer for JADC2. They will be the software architects for putting that together, and that's what they're focused on as mission number one. 

MR. BAJRAKTARI:  OK, great. 

If we can stay on the theme of JADC2...

DR. HICKS:  Sure. 

MR. BAJRAKTARI: March the department published unclassified summary of JADC2 the Joint All Domain Command and Control.  Can you give us a sense of where you are now on JADC2?  Are the services coming along and embracing JADC2 at the enterprise level?  And, are you thinking also about bringing allies -- creating a degree of interchangeability or interoperability with allies when it comes to JADC2? 

DR. HICKS:  Yes, let me answer the second part first.  We have to be able to have an approach that allows us to both communicate with allies, but then also to synchronize fires down range with allies and partners.  So the last part, the answer is going to be yes. 

I've said publicly that the secretary and I are not fully satisfied with where we are on JADC2.  I think we would not be -- we would be foolish to be satisfied absent an actual operational capability today that kind of had that sensor-to-shooter piece.  That said, there is a lot of very strong work underway, and my job, I think, is in particular for me, where I sit in the department is to bring all the pieces together that deliver real capability. 

So kind of put to the side the theoretical and let's talk through the building blocks of JADC2.  You need enterprise-wide cloud, and we're going to have -- we have competition under way right now, we're looking to have a multi-vendor enterprise wide cloud together by the end of the year, and our CIO is leading on that. 

You also, as I said, have to have data, and you have to have a data that can be used across the enterprise and we've put out the data -- I've put out data decrees under my signature, but more importantly, we have as I said CDAO, and CDOs in every component of the department now operating together.  There is absolutely religion on data, never thought I would see it. 

I joke sometimes that we're bringing the Defense Department into the late 20th century.  People actually want to use data to link to outcomes, and again, as small as that sounds, as you get closer to the tactical edge that is exactly what you need.  So the data piece well underway. 

Now, as I said this -- we have the -- individual services have these -- you know, in many cases very compelling work underway, experimentation to architected-solution work underway on JADC2 through their individual service lenses. 

But if we take that, and you put a software integration layer on it, a data-integration layer on it just like an app on your phone would be an integration layer, that's what CDAO can start to build, working with folks across the department, and we can start to understand the standards to which we need to develop this software architecture and build it out. 

So I think we're on, bottom line, a very strong pathway that will actually deliver capability.  And I'm only describing, as you might imagine, the portions that make sense to talk about publicly.  I do think we have some capabilities now.  This is an area the U.S. has been particularly strong on- Joint Command and Control. 

This is -- back to -- you know, we are not the problem, we are in a good position, we're going to get even better and having even more asymmetry in this space will help us in any competition with an adversary. 

MR. BAJRAKTARI:  OK, great. 

Dr. Hicks, we have about three minutes left.  If you don't mind, I was hoping to turn it over to the audience for a couple of questions.  So, if you have a question, please raise your hand and we'll bring the mike over. 

QUESTION:  Hello, thank you so much.  Brandi Vincent from DefenseScoop.   Sticking on that JADC2 sort of line of thought for a second, Deputy Secretary Hicks, we talked about it on your last trip to all those different tech facilities in the Midwest, and you mentioned sort of a need for maybe more oversight leadership from maybe CDAO, maybe overall Pentagon to kind of bring the services together on their different and their own efforts and contributions to JADC2. 

Do you have any update on that?  And sort of, what is that kind of team or leadership going to look like?  And is it going to come from the CDAO? 

DR. HICKS:  Great, thank you, Brandi. 

My answer on that is that I do think form needs to follow function.  There has been a little bit of obsession around governance on JADC2.  And what I want to do is make sure we're going after the right things and have the detailed governance follow. 

But what I can assure you on governance is that it ends up with me and it ends up with the vice chairman, and that is not changing.  So I try very hard, and I'll repeat it here, to get folks in the building to stop worrying about who's box something is in and know that the buck will stop with the vice chairman and I, and we've got this. 

The detailed pieces will follow, let's focus on what we actually want to deliver to the warfighter first. 


Any other questions?  Looks like we have one over there -- the back.  Last question, please. 

QUESTION:  Yes, thank you.  Angela (inaudible). 

I'm wondering if you'd like to be more specific on some of the acquisition challenges within the defense community, and if you have any specific expectations of what might be derived out of the PPBE Commission that's not going to be reporting to for, what another year, year and a half?  So in between now and then, what do you think we might see? 

DR. HICKS:  Sure.  I have met with the PPBE Commission, I think it's a fantastic group of people and I'm very much looking forward to their work.  We're not waiting to look at how to improve ourselves for them to report out, that'll put a -- I've done a lot of independent commissions that's put a lot of pressure on them.  We have a responsibility in the defense department to advance our approaches. 

I think the biggest -- we have a couple big issues right now, I'll just name a couple.  Transition, security, workforce -- those are just three I'll pick.  And we're doing a pain-point analysis right now of where all the pieces of challenge are across our innovation ecosystem for those who are trying to work with the department, and for those inside the department trying to get capabilities across the line. 

But, just picking up on those, we have some new authorities and a new fund -- we actually have a funded authority, which is very exciting, that allows us to transition.  We've put 10 projects out under that -- under our undersecretary for R&E, research and engineering. 

We really want to make sure those are successful, nothing succeeds like success. Nothing builds confidence in Congress as much as us actually using the authority they gave us well.  So we're going to make sure we can make those transitions go well.  We want to look at color-of-money challenges, of course, at the same time. 

So if you look at middle-tier acquisition, again an area where we've been given a lot of authority from Congress with great thanks to Ellen Lord for pushing that through with Congress.  We want to build on those successes as well, they still face color-of-money problems, so I think we want to work with Congress on what are tractable ways to go after that. 

On security, we want to make sure we make facility clearance processes easier, as well as individual clearance processes easier in order to help, in particular, small and nontraditional companies who want to work with us.

Workforce. There's so much to do in workforce.  We're in a very challenging market, of course, across the entire economy, very low unemployment.  Defense department, no exception to that. 

For our acquisition workforce we're trying to think through how do we look in the near-term to bring, and then train, appropriately, folks into the acquisition workforce, again, incent them to think about a lot of these new tools that they actually have available to them, that's a culture change issue, but also attract them into the field. 

And then we have some tools for the deeper bench, looking a little longer-term at our workforce to try to make sure we bring STEM talent and acquisition talent in at the same time.  We also want to make sure our organic defense industrial base has the talent it needs. 

And then finally, I would say it's the commercial sector piece.  How do we work with either the formal, if you will, defense industrial base which is about 600,000 companies, and beyond that, the broader American and international system of companies and others who want to work with us?  How do we make sure that talent is there that we can access? 

It might be a war for talent, but I don't think the war is necessarily between DOD and the private sector.  We need a really vibrant private sector, we need a vibrant research sector, an academic sector, and of course we need a federal workforce that's good. 

So we need a way to lift all those boats, and I think that things like the CHIPS and Science Act that just passed are going to be huge advantages to us.  We need more of those kinds of bipartisan efforts that help us all get after talent. 

MR. BAJRAKTARI:  Great.  Dr. Hicks, really appreciate having you here, sharing your insights with us and your time.  If I could ask the audience just in joining me in thanking Dr. Hicks for being with us today. 


DR. HICKS:  Thank you, appreciate it.