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Remarks by Secretary Carter at the Defense One Tech Summit

SECRETARY OF DEFENSE ASH CARTER: Thank you, Kevin for having me here, and for organizing this extraordinary gathering. And I want to thank all of today’s attendees and participants from America’s wonderfully innovative, open technology community, one of our country’s greatest strengths. I am committed to building and rebuilding the bridges between our national security endeavor at the Pentagon and innovators throughout the nation, from the tech entrepreneurs in Silicon Valley, yes, but to many, many other places around the country – from Silicon Valley which I’ve visited four times as Secretary of Defense, to the submarine engineers I met with last month at Electric Boat in Connecticut. And as we continue building these bridges, I’m also focused on promoting the great innovators within the Department of Defense – at our labs, in our schools, and on the battlefield.


You heard from some of them today, our many of our senior leaders involved in both of these critical and interconnected missions. Alongside the many technology, business and academic leaders who’ve joined the discussion today, they play a critical role in accelerating the spirit of innovation that we need to maintain our edge in a complex and changing world.

What I wanted to do is describe the logic of my commitment to this agenda and the actions we are taking to pursue it, and describe how these efforts – and the continued creativity and engagement of so many of you - will enable us to meet the challenges of today and tomorrow.

Now, when I began my career, as Kevin pointed out, in physics, 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 global, and the technology base is commercial.

Indeed, today’s security environment is dramatically different from the last 25 years, requiring new ways of investing and operating in its own right.  

Today, we have, as you all know, 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; where China is rising, which is fine, but behaving aggressively, which is not; 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 confronting terrorism, including accelerating the defeat of ISIL in its parent tumor in Iraq and Syria, and wherever it metastasizes in places such as Afghanistan and North Africa.  And since, moreover, we have a pretty good record of never predicting the strategic future, we must also be flexible and agile in preparing for the future … for unknowns we can’t anticipate today.

So in the Department of Defense, we don’t have the luxury of choosing between these challenges, or between acting in the present and investing in the future.  So we have to accommodate these changes in our strategic landscape and to stay ahead of those challenges, and stay the best, I’ve been pushing the Pentagon to think outside our five-sided box, and invest aggressively in innovation…from innovative technologies, to innovative practices, to innovative people.

Now let me address each of those in turn.

We're investing aggressively in high-end innovative technologies to enhance our own asymmetric and hybrid capabilities. Overall, our budget invests nearly $72 billion in R&D. Now, to give you a little context, that's more than double what Apple, Intel and Google spent on R&D last year combined.

That includes $12.5 billion specifically invested in science and technology to support groundbreaking work happening in our dozens of DOD labs and engineering centers across the country, as you just heard about from Mary Miller.  It also includes investments in work happening in innovative companies and at universities, and at DARPA to develop and advance some of the disruptive technologies and capabilities Steve Walker talked about with you earlier today. We’re making groundbreaking advances in areas like undersea systems, hypersonics, electronic warfare, big data analytics, advanced materials, energy and propulsion, robotics, autonomy, and advanced sensing and computing.

Those funds also support our growing nationwide network of public-private Manufacturing Innovation Institutes, where we’re working with companies, universities, and research labs to fund technologies like 3D-printing, advanced materials, integrated photonics, and digital manufacturing and design.  We announced the newest one earlier this spring, which is focused on revolutionary textiles that combine fibers with electronics to create fabrics that can sense, communicate, store energy, monitor health, change color, and much more.  Another we announced last fall is focused on flexible hybrid electronics…which makes it possible to shape lightweight, flexible structural integrity sensors right onto ships, bridges, cars, aircraft, and so on.

Meanwhile, we’re also investing to continue to make DOD a leader in innovation and investment in cybersecurity.  The Department of Defense has three missions in cyberspace.  First, our highest priority is defending our networks and weapon systems. That’s job one – they’re no good if they’ve been hacked.  Our second mission is to help our partners across the government defend the nation against cyberattacks from abroad.  And the third mission is to provide offensive cyber options that can be used in a conflict, as we’re doing now against ISIL in Iraq and Syria.

In our latest defense budget, we’re investing more in all three of these missions, a total of $35 billion dollars over the next five years – with a great deal of that to help modernize and secure DOD’s hundreds of networks.  And all the while, we’re continuing to push forward new breakthroughs in cyber technology, like creating network defenses that can swiftly adapt to threats and self-patch practically in real time.

Now, technical innovation and investment is necessary, but not sufficient – we have to pursue innovative practices and organizational structures, also.  The world we live in demands it.  While the Cold War arms race was characterized by strength, with the leader simply having more, bigger, or better weapons, today’s era of technological competition is characterized by the additional variables of speed and agility, such that leading the race now depends on who can out-innovate faster than anyone else.  It’s no longer just a matter of what we buy.  What also matters, it matters a lot, is how we buy things, how quickly we buy them, whom we buy them from, and how quickly and creatively we’re able to use them in different and innovative ways, all this to stay ahead of future threats.

Our DOD labs and engineering centers are embracing new methods and practices to meet the needs of the warfighter faster, more efficiently and more effectively. We have encouraged this  - I’ve encouraged this - through persistent reforms such as Better Buying Power 3.0. Six years ago when I was Undersecretary of Defense for Acquisition, Technology, and Logistics, DOD began what I called Better Buying Power, an initiative to continuously improve our acquisition system.  And under the current Undersecretary, Frank Kendall, we’re now on the third iteration, Better Buying Power 3.0, focused on reducing cost growth and cycle time through greater use of prototypes, modular open systems and open architectures, and on accelerating the‎ integration of commercial technologies.

It all comes down to meeting the needs of the warfighter faster, more efficiently, more effectively in what is an intensely competitive world. This is a particular focus of DOD’s Strategic Capabilities Office, which you heard about from Will Roper a brief time ago. I created SCO in 2012 when I was Deputy Secretary of Defense, I did that to help re-imagine existing systems in our inventory by giving them new roles and game-changing capabilities to confound our enemies.  We're building fast, resilient microdrones that can be kicked out the back of a fighter jet moving at Mach .9 and fly through heavy winds. We're developing an arsenal plane, which will function as a very large airborne magazine with different conventional payloads, networked to fifth-generation aircraft that act as forward sensors and targeting nodes.  And these are just a couple of examples of what Will’s shop is doing – stay tuned.

To stay innovative going forward, DOD has to continue to be open to new ideas and new partnerships.  That’s why we’ve embarked on initiatives like our start-up in Silicon Valley, the Defense Innovation Unit-Experimental, or DIUx.  I was there last month to announce that we’re iterating, and taking this effort to the next level by launching DIUx 2.0, with several new features.  It’s a nationwide release, with a second DIUx office to be located in Boston – you’ll hear more about that from us in July.  It has more processing power, since our budget request includes $30 million dollars in new funding to direct toward non-traditional companies with emerging commercially-based technologies that meet our military’s needs. 

And we’ve also upgraded the operating system, with a new partnership-style leadership structure led by Raj Shah – a National Guardsman, F-16 pilot, combat veteran, and co-founder and CEO of a successful technology startup. And we will keep iterating together and learning from each other going forward.

That’s one reason why I recently created a Defense Innovation Board, to advise me and future defense secretaries on how to continue building bridges to the technology community, and on how we can continue to change to be more competitive.  I’m pleased that Alphabet’s Eric Schmidt is serving as the board’s chair – he’s doing a great job putting together the rest of the board.

And today I can tell you this board will include Reid Hoffman, the head of LinkedIn; former SOCOM Commander Admiral Bill McRaven; and the noted historian of innovation Walter Isaacson.  And we’ve got some additional amazing innovators lined up,  so stay tuned for who else will be joining them. 

They will begin their work over the summer, and I expect to receive their first recommendations in the fall. Among other things, I’ve charged them with keeping DOD imbued with a culture of innovation in people, organizations, operations, and technology …to support people who innovate; to support those creative figures in the Department who are willing to try new things, fail fast, and iterate; and to ensure we’re always doing everything we can to stay ahead of potential adversaries.

I stress innovation in people because as good as America’s technology is, it’s nothing compared to our people – they’re the key 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 for our All-Volunteer Force. 

That’s why we’re building what I call the Force of the Future, to ensure that amid changes in generations, technologies, and labor markets, we’re always postured to bring in, develop, and retain the best young men and women that America has to offer. 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 how the rest of the world works outside of our walls.

For example, we’re expanding and broadening the Secretary of Defense Corporate Fellowship 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, or 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 as we had in the past with people like Dave Packard, co-founder of HP, who also served as Deputy Secretary of Defense.

We’ve also created the new Defense Digital Service, which you heard about from Chris Lynch earlier today. He’s helping us bring in coders from companies like Google, Palantir, and Shopify for what we call a “tour of duty.”  And they’ve solved some really important problems for us, like improved data sharing between DOD and the VA, to make sure our veterans get access to their benefits. We’re also nearing completion of our pilot program called Hack the Pentagon, where we invited vetted hackers to test our cybersecurity.  This is similar to the “bug bounties” that many leading tech companies have…and it’s the first one ever in the entire federal government.  It’s exceeded all of our expectations – over 1,400 hackers registered, discovering more than 100 bugs so far - helping us be more secure, at a fraction of the cost. 

Another example that’s having a real impact is our Cyber Mission Force.  These are talented people– some active-duty, but also Reservists and National Guardsmen – who have saved networks by hunting down intruders in our networks, performing the forensics that help keep our systems secure, and combating our adversaries in the cyber domain. 

These are just some of the actions we’re taking to build the Force of the Future. We’ve also announced actions to help retain talent within the military – helping us retain experienced service members by helping them balance their commitments to the force and their families through expanded maternity and paternity leave, extended childcare hours on bases, and by offering military members with families the possibility of some geographic deployment flexibility in return for additional service commitments.

And yesterday, I announced the next two links to the Force of the Future to expand our ability to attract, train and retain the best talent American has to offer. On the military side, we’ve proposed changes to the promotion system to allow military officers to pursue broadening opportunities, like earning their doctorate, or pursuing other advanced training, or doing a tour with industry, to temporarily defer when they’re considered for promotion, without being penalized by timeline restrictions. We’ve also moved to allow civilians with very specific skill sets, such as cyber and other scientific and technical qualifications, to enter the officer ranks at a level commensurate with their experience. We currently permit this for doctors, but not for other jobs that are not only high-skill, but also hard-to-fill, rapidly changing, and in high demand by the private sector.

We’re proposing changes that would foster innovation in our civilian workforce. For example, we’ve proposed allowing recruiters to hire top talent directly from college campuses. We’re also expanding DOD's STEM scholarship-for-service program, and building two-way talent exchanges with the private sector. And we’re going to better leverage our existing authorities to directly hire Highly Qualified Experts into jobs across the department.  Today we only have about 90 such experts onboard across DOD – and you’ve heard from two of them today – Chris Lynch and Will Roper. I’m sure you’ll agree that we’re better off for their service, and we’d be well served to include more incisive thinkers like them directly contributing to our mission of national defense. Competing for good people for an all-volunteer force is a critical part of our military edge, and everyone should understand this need and my commitment to meeting it.

We’ve always been able to out-innovate our enemies, because we have our people – the builders, the operators, the innovators from our military and civilian force as well as our contractors and our nation’s overall technology base – people who think creatively, who are flexible, and who’ve always been able to combine our advanced technology with creative practices to solve the problem at hand.  In order for our people to continue accelerating the breakthroughs and progress that ensure our continued dominance, we must back them up with the freedom to innovate and take risks, and with a stable and secure funding environment. 

This last is why I remain concerned about proposals in the draft defense bills in Congress that would undercut the bipartisan budget agreement reached just last year, and that was supposed to guide our budget for two years.  The unraveling of bipartisanship could end in a return of sequester, which is the Department’s greatest risk.  Also objectionable in time of war are provisions cutting the overseas warfighting accounts.  There are also some new and unstudied managerial proposals – adding and moving boxes here and there – that the Department’s leadership has not recommended.  I would hope that such micromanagement will not be a feature of any enacted NDAA.

We all play a role in ensuring the success of the national security mission. For those interested in foreign policy and national security, there are lots of interesting challenges and problems to work on. This is also true for those interested in technology. But the intersection of the two is truly an opportunity-rich environment.

So I want to thank you for being here today, and for considering the words of all of the forward thinking individuals from government, business and academia who’ve shared their thoughts today. My pledge to you is that you will always have strong and willing partner in America’s Department of Defense.  Helping defend your country and making a better world is one of the noblest things that a business leader, a technologist, an entrepreneur, or young person can do.  And we’re grateful to all of you for the passion, the interest and the spirit of innovation that makes us all stronger.

Thank you. 




            STAFF: Well, thank you, Mr. Secretary, for those remarks and thoughts. Some of us have heard you say before repeatedly throughout the year on your effort, and some are new.


            So maybe one way to start off, and as I was sitting there listening to you go through all these new efforts and these -- and the expansions that are happening, this room just heard from a lot of folks who are interested, but some skeptics as well, about what you're trying to do either on the whole or specifically with the DIUx Silicon Valley outreach.


            Do you understand that skepticism? And -- or perhaps the better question is if, you know, you just boasted the budget for that particular effort was going to jump to $30 million, there's new leadership in place. A lot of folks who know the Defense Department think, you know, that's not a whole lot compared to what the Defense Department spends.


            SEC. CARTER: Sure.


            STAFF: Why isn't this something that has a three star general, a staff of 500, a really world-class level type of DOD expected thing?


            SEC. CARTER: Good. Very -- two -- two very -- very good, very important points. I mean, first of all, are we iterating, are we making -- it's -- it is experimental for a reason. We're trying things out, and that's why I just made some big changes in it. That's fine. That's like, you know, good innovators do. They start down one direction and then decide that -- that I should adjust a little bit, and that's what we're doing and that'll continue to happen, by the way.


            But the fact that we're doing that and in fact that we're establishing more reflects my confidence in the basic idea, which is to have another way -- just another way because we have many ways -- of connecting to the wonderful innovative ecosystem of the United States. It's a way of signifying that and it's a way of making a funnel that can come into the department not just a $30 million worth, but to $72 billion worth.


            So it's the connection that is important. Now, I also want DIUx because it'll be a - -- an exchange place and a trading post from which -- from which innovative people come back and forth to have some money when it -- itself sees an opportunity. But one of the principal things it's doing is connecting innovative people to our mission and where they can plug in to the Department of Defense. That's its principal focus.


            And as you probably know, Kevin, you undoubtedly know because of your own expertise, we -- we have constantly to work on -- well -- but I'll use an engineering term, being a technically trained -- the impedance match between government and industry between the way the government operates and the way the private sector. Now, not all of that gulf will ever be bridged. I mean, the public sector is the public sector.


            But where we can change the way we operate to make us more connected to those who are agile, and that's pretty much -- that's principally the area of speed at which we act, the speed at which we make decisions, the speed at which we can allocate funding to R&D, principally in that area, we need to do that. Otherwise, we're not going to be the most agile and in today's competitive role, if you're not the most agile, you're not the best and we've got to be the best to protect ourselves.


            So we'll keep changing everything we're doing here that I described in a good sense and adjust kind of way. That's the spirit of innovation. But I'm confident in the concept of DIUx because I'm confident that connecting the Defense Department to the world of innovation is one of the secrets to America's future military strength.


            STAFF: So tell me more about how -- the progress of that connection and bridging the gap. And I think I -- we talked about this a little on the ride home from Davos. So the secretary -- I mentioned this in my opening remarks -- was the first U.S. defense secretary to go to the World Economic Forum, which is really a fish out of water kind of place for military guys to show up. It's bankers and ambassadors and it's Switzerland of all places. So...




            So it's really not for the military. But the reception was fairly warm and I remember asking you then, I wanted -- to kind of give us a progress report of the reception that you're -- you're hearing or feeling from the firms you're meeting, both at that CEO level compared to the perception of some of the reporting on the groundswell of this divide of military men in Washington and coders and hoodie-wearing guys like Chris, you know, out in the Valley.


            What's the reality of it? And why are they willing to bridge the gap? Is it because it's good for business or is it because of any newer sense of patriotism, like you said at the end of your remarks?


            SEC. CARTER: First of all, the reaction generally is overwhelmingly gratifyingly positive, and that's not because we're so great at what we're doing or how we approach, but because the -- these are people who want to make a difference in life. That's why they're in our innovative culture. So it's in their nature to make a difference and the mission really inspires people.


            I mean, keeping people safe, creating that life that allows people to get up in the morning and take their kids to school, leave them safely, go off to work, live their lives, dream their dreams, raise their families, that -- that -- creating that environment, contributing to that mission, that's really inspiring. So people -- these are people who want to act in an inspired way. They want to make a difference and contribute something. And when they see our mission, they are understandably attracted. That's why I do this, that's why all of our people do this.


            And are there reservations? Yes. There are two principal reservations, Kevin; he touched on -- on both of them. The first one is, well, I hope government's not too clunky for me to connect to. And you know, there, I think that puts the burden on us to try to open up the door, create that impedance match that makes it possible and less -- and easier for people to connect to us. That's what DIUx is about, that's what letting people go back and forth so ideas go back and forth is all about. So we've got to make that easier.


            The other thing is, are we going to put any restrictions on people? Now, we  -- and there, we also try to minimize the restrictions and the intrusiveness and we understand that this is an open business community, that the internet is open and a free internet is a value all by itself and we're standing for the values of our society. That's what we're -- we're defending. So we -- we're adapting to that as well.


            But to me, those are -- those are hesitations that people legitimately have and it's our job to overcome them.


            STAFF: Well, one of those -- one of those executives we know you met with this week was Elon Musk.


            SEC. CARTER: Yes.


            STAFF: A lot of folks are wondering...


            SEC. CARTER: Great innovator.


            STAFF: What was that talk about?


            SEC. CARTER: It was about innovation. This is one of the great innovators of our country. He's -- it's gratifying to me that he -- he and I have a great relationship -- it goes back years -- that he takes an interest in what we're doing. We didn't talk business, there. That wasn't the point of that. Other people do that for me. But we were talking innovation in every way.


            And I'm looking for people like that. That's why the Defense Innovation Board is so important to me because I want people who have innovative experience, who have tried things themselves, to come in and say, "You know what? Here's something I did that worked."


            And then I -- I can say to myself, "Hmm, I wonder whether I can apply that here." That's a bug-bounty is a perfect example of that. Everybody does that outside, and then I said, "Well, why aren't we doing that? If that's such a good idea, why can't we do it?"


            Well, there turned out to be no reason why we couldn't do it. So we did it. And it's been really great.


            STAFF: So what -- what are some of the other, you know -- prioritize the successes or the challenges to come for you out of all of this. You -- and, you know, this isn't the first year for you. Like we said, you were deputy secretary, undersecretary. You've been trying to change and streamline acquisition for a long time. Well, here you have a room full of folks here, a lot of them I'm sure are familiar with acquisitions and with program managing.


            You know, what -- what do you think is your proudest achievement, changes so far? And what has to happen soonest?


            SEC. CARTER: Well, I mean, there are other things that we're trying to do in addition to being agile and innovative. One is we're trying to be efficient. And so it was a big priority for me as acquisition executive to make -- and that's why it's called Better Buying Power, to get -- make sure that we get the best use of the taxpayer dollar. We owe them that.


            And by the way, importantly, it's easier for me to go and argue with the Congress, which is difficult in today's environment. You know, I mentioned gridlock and everything. It's tough in Washington. I need to argue for the money we need to protect ourselves. I'm better off arguing for that if I can also show that we're using every dollar they give us well.


            And I wasn't satisfied with that as undersecretary for acquisition, technology and logistics, and I wanted to improve that. And I still want to improve that. And my successor, Frank Kendall, wants to improve that. And that also is an imperative at every business out there -- constantly get leaner, constantly do better, drive cost out of things.


            We have to do that in our programs, too, because then we get more for the dollar and we get more trust for the dollar. And then we have to be innovative in our war practices, too, quite honestly. So I told you about the problems we face right now. You follow very closely what we're doing with ISIL. We're going to defeat ISIL. We have to defeat ISIL.


            It's a new kind of enemy. That means we need to be innovative in how we go at it. And that's why we'll use air power. We're using all kinds of partners that we can work with there, who can hold and govern territory that we take back, and help them take back from ISIL. But we're using new things that we haven't used before, like -- like cyber.


            So for all the -- so you say, "I don't know to prioritize those things" -- we have to be innovative across the board. And I'm completely committed to it. And moreover, I -- it's -- it is I think widely understood in our department that that is a key to the future. So I think it's not just me. You've heard it from other people today. And most people in our society know that to be good, you've got to be agile.


            STAFF: A couple -- a couple more, and then we'll turn to the audience. We know you have a hard stop to leave.


            But you mentioned -- you mentioned ISIL. And I wanted to ask about -- we had a panel, you know, DARPA to Daesh, and about the speed of technology getting to the fighters of today's war front, which are so much more -- either increasingly or more importantly, special operators doing elite work that's often secretive. Are you satisfied with the pace of that new technology reaching those guys now?


            SEC. CARTER: Never. You -- any question you asked me that begins "am I satisfied" -- no, because we've got to do everything...




            SEC. CARTER: That's not to indict us. It just means that we've got to aspire to doing better. So no, we've -- getting stuff out in the field faster and faster is important. I had the experience now for, you know, seven years, most of the lion's share of that time with our wars in Afghanistan and Iraq, and getting things into the field.


            And it -- in the case of the MRAP, for example, which saved lives, we had to do things outside the system in order to get the warfighter what they wanted. Now, you say to yourself, well what kind of system do you have, where in order to get the warfighter what they need, you've got to go outside the system?


            Well, there's an answer to that. We have a system that is basically meant to buy things over long periods of time and the best things. That's a problem when you have ongoing operations. And by the way, it's a problem in a rapidly changing world. So making our acquisition system run more quickly -- the war taught us some things. I mean, otherwise, you know, there's not a whole lot to say great about having a war. We had to do what we had to do.


            And, you know, people made great -- great sacrifices for it. But it did have one little silver lining on it, which is we learned a lot about agility -- the MRAP is an example, all our counter-IED stuff. Sadly, we made advances in medicine in response to things like TBI, prostheses, and other places.


            But in today's fights, and also in the fights we don't want, but that could happen -- say, North Korea -- again, you've got to be innovative, because you've got to say to yourself if something happened there, what would I wish I had done? What tomorrow would I wish I had done today? And boy, you don't want that wish list to be very long.


            STAFF: I'm glad you mentioned North Korea. I think there's a sense of -- there's a sense that because of the wars that we're hearing about -- the act of war, the act of fighting, that it is special operator focus. It's unit and individual, where at the same time we have now two aircraft carriers in the same region. We do have nuclear concerns. We have -- we still have big worries.


            SEC. CARTER: It's full spectrum. You're -- you're absolutely right, from very high end, what's called high end. But even the low end, as I've pointed out -- I mean, you can consider the counter-ISIL fight low end, but it's not really. No fight today is truly low end.


            So we've got to do it all, and we're alert to that. I mean, we stand watch just in North Korea every -- you know, the slogan there is -- is ready to fight tonight. And nobody wants to do that, but we're ready.


            STAFF: So, one more question. I'll ask our event staff to give us our game clock here so I can make sure we're on schedule for the secretary.


            But out of the news in the last day, were reports about Afghanistan, the rules are going to change to allow for greater strikes, or to allow for airstrikes on the Taliban (inaudible). Can you confirm or expand on what's changing out there?


            SEC. CARTER: Yeah, no, I can. That's -- the president made a decision to enable the commander there to have some additional authority to act proactively. That is to anticipate situations in which the Afghan security forces would benefit from our support. This is using the forces we have here in a better way, basically, as we go through this fighting season.






            STAFF: Rather than being defensive?


            SEC. CARTER: Rather than being, yeah, simply reactive. And this makes good sense. It's a good use of the combat power that we have there. Obviously, our mission is the same, which is to help the Afghans maintain control of the country, and to avoid having a counterterrorism challenge once again from Afghanistan. So that's what we're up to.


            This will now enable our commander there to do this in a more effective way, using the forces that he has there and this was, you know, pursuant to General Dunford's and my discussions with him. The president gave it his full support and I'm grateful for that.


            So it's a -- it's a good move to make and should really help us help the Afghans even better this fighting season.


            STAFF: OK. Thanks for -- for answering. We have very limited time. These things go fast and they really depend on how fast he reads his speech. So...




            Well, I'm going to -- I'll call for one question quickly and hopefully get it, get it (inaudible) here in my eyesight.


            SEC. CARTER: You know, Kevin, go ahead if you want to -- if you want to go a little over because we did start a little late. I don't want to drive you towards...


            STAFF: So there you go.




            STAFF: You heard it from the boss.


            SEC. CARTER: I'll try to give a short answer.


            STAFF: Loosen your tie. Stick around.




            Q: Tom Risen, the U.S. News and World Report. Thank you, Mr. Secretary. I know you're very busy.


            Have -- have we lost small military tech advantage against China because of their increasing research and because of their -- that (inaudible) weapon systems? And how are we poised to -- are we poised to regain some of that advantage with the third offset strategy?


            SEC. CARTER: Well, yes and yes. I mean, I -- China has in the last 25 years improved, obviously, its economy, the standard of living with -- of its people. And with that comes the advance of its military capabilities, no question about that. And we have a number of allies and friends in the region that we work with and we're always watching the deterrent equation there, not just with respect to China, but North Korea and others in that region. You might have mentioned Russia also, which is trying to improve its military capabilities.


            Now, all of these are different situations and no -- again, we're not looking for conflict with any of those. But do they measure themselves against us? I'm sure they do. And are -- is making sure that the United States military remains the best and the -- so to speak -- the firstest with the mostest, is that an objective of ours? Absolutely it is, including the third offset.


            STAFF: One (inaudible) on the aisle.


            Q: Hi, Mr. Secretary. Sean Lyngaas with Federal Computer Week Magazine.


            You talk about how hacking ISIL is sort of unprecedented, but as -- as you probably know, in the -- during the surge in 2006, 2007 in Iraq, there were -- a lot of those digital tools were used as well. I'm wondering how you draw upon those lessons learned from -- from those -- from a few years ago? And -- and...


            SEC. CARTER: Well, it's a good question. And yes, we did in Iraq and Afghanistan. I do think you have to recognize that ISIL's trade craft in using technology to advance evil objectives, both operationally and ideologically, is unprecedented and it's -- it's frequently said, and I think it's basically right, if you think -- if Al Qaida was an internet generation terrorist group, ISIL is a social media generation terrorist group.


            It is different, even than it was just a few years ago. So yes, we learned some things from there and we can use some of the techniques that we used in Afghanistan and Iraq in those days. But you know, this really is different, even as what's on your desk is different today or in your pocket than it was three years ago, five years ago. And so these guys are up to date in that regard, not their thinking in general.


            Q: You -- you said in recent months...




            That's a good point. But you said in recent months, the U.S. was engaging in cyber warfare with them in a way like never before. How -- you know, that was months ago. But...


            SEC. CARTER: It's like never...


            Q: ... a progress report...


            SEC. CARTER: It is like never before, which isn't to say we've never done it before. But it is like never before and -- and we've really made it a priority and -- that's logical and to this room, that's probably unremarkable news.


            But a lot of people associate the fight against ISIL with, you know, airstrikes and -- and the things they see on TV and they may not realize that this is part of the -- the -- is part of the formula for success, and we're going to have success in this area and we need to do this.


            STAFF: OK. Let's get more questions. Gentleman in the back? Q: (inaudible) thank you very much for recapitalizing Lincoln Lab, MIT Lincoln Lab. That languished for a while.


            Question on force of the future. Is the initiative about broadening the education of the military and civilian leadership so they understand what they're buying -- the technology -- how to use it? And if so, are there opportunities for world-class universities where you have a large military population? I'm thinking of William and Mary in the middle of Hampton Roads. You know, do -- can they play a role or is it going to be just military education?


            SEC. CARTER: No. It's -- it's -- first of all, the force of the future is both our military and our civilian workforce, and it is about the whole pipeline. It's about recruitment and making sure that we're connected to the entire population. I'll remind you, for example, something I said yesterday, which is most of our new military recruits come from only six states, so we really need to reach out.


            That's why -- women in service. That's why -- that's half of our population. I want to be able to draw from the entire -- if I'm going to have the best people, I've got to at least -- people have to meet standards, but I want the widest possible pool. So it effects recruitment. It -- it affects retention, which is where this comes in. Partly, people want to improve themselves.


            In today's world, people know we all need to keep changing and improving. The idea that you went to school and then you live the rest of your life on the backs of what you learned years ago, that doesn't fly in today's world. We all have to keep learning. And people are going to only want to be with us and stick with us if they feel that they have opportunities to develop. So that's one of the reasons to it.


            Plus, they get better, which means they do better stuff for us. And then -- you know, retention is a complex matter. People make decisions for complicated reasons. I mentioned family programs, for example. Family programs are important for the very simple reason that we're not -- we're not just trying to be nice to people, although that's a nice thing to do too.


            But when people have been with us for a while and therefore we've made an investment in them and they know a lot and they're very capable and they still have a whole career ahead of them, that -- we don't want somebody who's at that point to leave because they can contribute all that going forward and we've invested all that in the past.


            So you don't want to lose them then, but that happens to be the time when many people are having a family, and so it matters whether you can consistent with everything else we need to do -- you know, we need to send people where we need to send them when we need to send them and I can't do anything about that.


            That's the profession of arms. But where we can make it possible for people, easier for people to reconcile everything else they're trying to do, that's in our interest. So it's the whole pipeline -- accession, retention, development in service, the whole deal.


            And it's military and civilian. And people innovation -- innovating how we do that, because people are learning all kinds of ways in human resources management that, you know, a generation ago weren't done. And internet helps that. Network LinkedIn is an example of that. That's why I'm so glad Reed has joined my innovation work.


            But we've got to keep thinking about how we manage our people if we're going to keep, retain and develop the best, the whole (inaudible).


            STAFF: Yeah, I've heard, you know, this is the, you know, are you going to recruit a cyber colonel? You know, bring someone in at O-6, at that level?


            SEC. CARTER: That's the kind of thing that yesterday I -- we have to get authority to do that from the Congress. I'm seeking that kind of authority. Now, I want our service chiefs and our service secretaries -- I want to -- I'm trying to give them latitude, not rules. So I want them to decide which specialties and so forth that makes most sense. So we'll see that over time as they think about it.


            But I'm trying to give them the latitude to change where they see an opportunity that the current rigidity doesn't permit them to exploit.


            STAFF: (inaudible) we'll go right here to Jon.




            STAFF: Yes. It's his turn.


            Q: Thank you. Jon Harper with National Defense Magazine.


            Mr. Secretary, can you give us a preview of the kind of people you'll be adding to the Defense Innovation Board in the future? Is it people who might surprise us? And are you tasking them with tackling any particular urgent challenges? Or is it more of just a general, you know, how you're doing business and the kind of technologies you're looking at?


            SEC. CARTER: Well, I would have told you if I was going to tell you today, but you get the -- I mean, I think you catch the tune, right, when you see Eric Schmidt and Reid Hoffman and Bill McRaven and Walter Isaacson and so forth. These are people who know something about innovation and have actually done it.


            And my -- so, are there going to be surprises? I hope there are surprises for you. I'm certainly looking for surprises for me. That's the whole reason to have them, is I want to learn from them things that we haven't thought of that would be good for us.


            Now, I'm not expecting them -- just to show you (inaudible) -- I'm not expecting them to know about defense. I know about defense. Our people know about defense. That's not my problem. I would like to know what's going on in the outside world that I might not know about that has proven successful, that might be applicable to us. That's what I'm looking for.


            And these are all innovative people. And I -- I just in conversations with them, and I have this experience all the time. People say, well, you know, here's what I did to build my company, to think my way through this problem; to get people I needed.


            And I say to myself, "Hmm, now why haven't we done that. And a bug bounty is a perfect example. That was really Chris Lynch. I don't know if Chris is still around. Why haven't -- hasn't anybody in the federal government done that? Well, there's not really a good answer to that, right? It's a pretty successful thing. It's essentially free. And you get all this talent and they're having a great time. And you're getting a security audit for free. It's like, wow, pretty good deal.


            Well, somebody else thought of that. We didn't think of that. If all we ever apply is things we've thought of, we're never -- we're not going to remain the best. You know, wonderful as we are, we're not going to think of everything. The whole point is to connect to a larger world of innovation.


            STAFF: As reporters, I was formerly an investigative reporter, and we used to ask the military the same thing. You'd want a big data set. How come you don't -- how come you don't do that? And the answer was always it was because Congress didn't tell us to.




            We're not mandated to, so we don't do it. We don't have that rule.


            SEC. CARTER: Well, we've got more get up and go than that.


            STAFF: I guess I'll take privilege for the last question. You mentioned earlier Congress, you need their approval to do a lot of changes you want, some of them especially with reforming acquisition, and John McCain's put forth some things. What's your response to some of those suggestions on the table right now?


            SEC. CARTER: Well, it's mixed. I mean, I really appreciate the effort that both Chairman McCain and Chairman Thornberry and their committees have put in, because I think they're trying to think the same way. What's in the future and so forth.


            And I do have some differences. And in general, micro-management from the Hill of what are executive and leadership functions is not a good idea. These things take some time. And so I would -- I think that there are important ideas having to do with, for example, the role of the chairman in integrating combatant commands trans-regionally. I've made some proposals there. I think there's definitely a need there. And I'd like to talk to people about that.


            Improving our acquisition system -- I've been at this a long time, and I'm always ready to talk to people about those ideas. The two -- the two things that I hope we can work through and that I really can't agree with are deferring wartime funding in a time of war, and budget instability. That's just -- that really hurts us. And all I can do is ask people to come together behind us.


            And all these management proposals and so forth -- again, I think micromanagement by the Congress of executive departments is not a good way to go. However, I'm willing to work with them in terms of provisions. And I just made some proposals yesterday. This is -- the Force of the Future ones, that are -- will require being enacted.


            But they're the ones that our senior leadership, our service secretaries, our joint chiefs of staff, and I and the senior leadership, you know, we've really thought hard about these things. We took months and years working through them, and they're considered proposals by the people they have charged with running the Department of Defense.


            And I think that we need to respect the judgment -- the collective judgment of the leadership of the Department of Defense. And so I hope we can work through some of these things.


            STAFF: More funding and instability are two things that I've heard. You're the third defense secretary to worry about those things since I've come to the Pentagon. So, you know...


            SEC. CARTER: You're probably right.


            STAFF: ... it's never too early to ask. Are you going to be around to keep these -- all these changes and initiatives going past January 20th?


            SEC. CARTER: I'm working for President Obama, every day he's president as long as he wants me to. The -- the -- I'm confident, though, that the ideas that we've been talking about today make so much sense that they'll continue in the future. I mean, look at these -- look at people like Will Roper. This is necessary. I think everybody gets it. Everybody gets the logic of it.


            And so I'm confident that long after I'm gone or any individual leader is gone, these things are going to continue because they make so much sense.


            STAFF: Well, thank you. As we wrap up, I think it's been very important to have this conversation now, and I thank you very much for coming here. Because, again, it's been about a year-plus since your initiative has started, and as I said on the top, there's been a lot of reporting at different levels for the national security press corps to get its head around things like technology.


            And I've been with you on the road when -- you should hear him talk to, you know, the scientists in computer labs. It's a whole other Ash Carter -- (inaudible) -- when he's talking about that, versus, you know, White House policy and budget lines.


            But it's an exciting field, and I hope it does take -- take hold and we have a lot more to talk about.


            So we want to thank all of our participants today who -- who -- and thank you, the audience, for showing up -- those of you watching on the live stream, our underwriters like BAE and Dell, and the rest. And I will also take the privilege to announce this is our tech summit, but our biggest event is our Defense One summit, and that's in the fall, our fourth one. It's November 17th in town at the Marriott Marquis, and I hope Ash Carter will help me get a lot of great speakers for that as well.


            And you're welcome to come back as well anytime also.


            SEC. CARTER: Thank you.


            STAFF: And more important than anybody else in the room, I have to thank my mother and father who are here (inaudible) front row and center this entire time.




            You've given my mother a great birthday present for the weekend.


            So thank you, everybody, and thank you, Mr. Secretary.


            A round of applause for the secretary. Thank you.


            SEC. CARTER: Thank you very much.