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Remarks by Secretary Carter on Innovation in Defense Policy at the Hoover Institution, Washington, D.C.

THOMAS GALLIGAN: I also want to welcome you and thank you for coming out and joining us today.

Our discussion today is titled "Innovation in U.S. Defense Policy: A Secretary of Defense Perspective." And it will take a deep-dive look at how the U.S. has employed a technological advantage in defense of the nation and whether that remains a feasible proposition.

What was once the novel use of stealth technology, guided precision weapons, satellite command and control, is now being challenged by new technologies such as autonomous weapons, cyber and advanced manufacturing. With an accelerating research and development process, will the U.S. be able to continue to rely upon technological dominance for its national defense? Moreover, what role does the private industry play in this future?

The moderator for today's discussion knows both participants well. As the former Washington bureau chief of The New York Times, Phil Taubman has had front row seats to some of the most consequential national security events of the last few decades.

In 2008 when Phil retired from The New York Times, he came to Stanford where he is an adjunct professor with the Center for International Security and Cooperation. Phil also serves as the secretary of Stanford Board of Trustees and an associate vice president for University Affairs.

Thank you in advance, Phil, for what will -- I'm sure will be a fascinating discussion.

We're also delighted to have two incredible public servants as our speakers today.

The honorable William J. Perry has been at the front lines of U.S. national security for nearly half a century. Starting his career as one of the few analysts writing intelligence reports that reach President Kennedy and his advisers during the height of the Cuban Missile Crisis, Bill eventually hit the pinnacle of government service when he was named 19th U.S. secretary of Defense.

As secretary, Perry led efforts to reduce the dangers of nuclear weapons in the post-Soviet era and secure a safe transition into a post Cold War world. In 1997, President Clinton awarded Bill the Presidential Medal of Freedom.

When he retired from a career in government, Bill took on another form of service; teaching and research. At Stanford, Bill is a senior fellow with the Hoover Institution and the Freeman Spogli Institute for International Studies.

The honorable Ashton Carter is the 25th and current U.S. secretary of Defense. As the chief executive of the Department of Defense and principal defense policy adviser to the president, Secretary Carter is responsible for the men and women of the United States Armed Forces.

Similar to Dr. Perry, Secretary Carter has devoted much of his professional life to public service and advancing science and technology in the defense of the United States. He's held a variety of positions in the Pentagon, including deputy secretary of defense, undersecretary of defense for acquisition, technology and logistics, and assistant secretary of defense for international security policy.

Prior to his current role, Secretary Carter was the Annenberg Distinguished Visiting Fellow at the Hoover Institution and the Payne lecturer at the Freeman Spogli Institute.

Together, they have spent years in and out of the government focused on how they can promote and maintain peace and stability. When they were at academia, Bill at Stanford and Ash at Harvard, they co-directed the Preventative Defense Project, a program focused on how to prevent large-scale threats to international security from emerging, where they co-authored books, op-eds and reports.

Their collaboration has been successful because of their mutual admiration, respect and friendship, and I'm sure you'll see that today. Here at Hoover, we are delighted that we have an opportunity to recognize this decades-long friendship and the benefits it has brought to our security.

I'd like to give special thanks to Mike Frank and the Hoover Washington team, or about, and the Pentagon staff who are here, and Debra Gordon, Robin Perry and Lisa Perry for making today happen.

Finally, a quick note before we begin. Both participants have in advance chosen not to speak about current nuclear policy that is under consideration by the administration and will not be commenting on that subject.

Further note, we have the secretary for about 30 minutes. His day job calls him elsewhere. Thanks for doing that, Ash, thanks for fitting us in. We really appreciate it.


MR. GALLIGAN: But we'll -- there will be a bit of a change in the middle. And if everyone could just remain seated and we'll carry on with Secretary Perry at that point in time. We appreciate it.

Phil, I'm going to turn it over to you.


So of course, it's no accident that these two gentlemen are here to discuss defense technology and innovation. As most of you know, Bill Perry started his life as a mathematician, has a Ph.D. in mathematics and Ash has a Ph.D. in physics.

And as I say, when you look back at the history of innovation in the Defense Department, you often find scientists serving in top civilian jobs as the catalyst for that kind of change.

So let me just set the stage very briefly because we don't have much time with Secretary Carter. But I would remind you that science and technology and defense are indivisible in American history. And if you pick up the story with World War II, you have -- (inaudible) -- Bush working as the head of the Office of Science Research and Development.

Of course, there was the Manhattan Project during World War II, which was staffed by many eminent scientists. Then if you come to what I would think of as the first sort of explosive period of technological innovation in the post-war period during the Eisenhower administration, you have the development of intercontinental ballistic missiles, the nuclear Navy under Admiral Rickover and the development of the first reconnaissance satellites.

Then if you jump ahead, I think that the next big period of technological innovation really began in the Carter administration, and largely thanks to Bill Perry and Harold Brown, who was of course secretary of defense, and by the way, also a physicist. And in that period, we saw the beginning of the developmental efforts that led to the GPS system, that led to stealth aircraft and precision munitions.

So the subject for today really is what I think people are now referring to as the third offset. The prior offset, so-called offsets were done to give the United States an advantage in technology where we lacked some of the manpower to face Soviet threat and the Warsaw Pact.

So here we are today. You have launched a lot of very interesting initiatives and offset -- third offset. And I think we're headed, at least from what I read, to more semi-autonomous weapons, maybe some fully autonomous weapon systems. You're working with Silicon Valley.

So when you think about what the goals are for what you would like to achieve with this, what would be the top two or three be?

SEC. CARTER: Well, the goal for me is the same as it was for Bill and Harold and all of my predecessors, which is to make sure that we remain the finest fighting force in the world.

We're that today, and for two reasons, I should say. One is because we have wonderful people, and that matter's a whole different subject. Also, one where innovation matters. But the other is technology. And what we're doing today to try to stay the best is in technical substantive terms, Phil, as you said, keeping up with the times.

So you mentioned cyber, you mentioned autonomy. You might have mentioned bio also, because I think that's the revolution that will come after the information revolution, in a sense, and we need to be there for that as well.

But there's -- in addition to the technical substance, and we're present across the entire waterfront. We always have been, we have -- always will need to be. There's a stylistic change from the time when Bill was doing this, and I was working for Bill and even before then -- I want to come back and tell a story about Bill later.

But -- I mean, first of all, I always tell people we don't build anything in the Pentagon. We buy things, first and foremost, and we buy them from private industry. So the key is our relationship with the private technology sector. The alternative was tried by the Soviet Union, which is do it all in-house. Didn't work out very well.

So it has always been our relationship with the -- with private industry that has been the channel through which we got the best technology. Now, that has to be different in today's world, and that's what I'm trying to adjust to, than it was in the world where I began and where Bill was.

In those days, the technology of consequence in our world mostly was American and much of it government sponsored. Those two things are still -- were still major players, but that -- that -- those two things are not to be taken for granted anymore. So we have to have a new relationship with the dynamic innovative culture of the United States from the one we had when I started my career.

And so there's a technological -- there's a change in the technical substance we're trying to achieve, but there's also an essential change in style. That's when you see me coming out all the time to the Palo Alto area and elsewhere around the country trying to connect to the innovative community.

It's in recognition of the fact that they, unlike I, young scientists and engineers, I -- I -- it was part of my DNA growing up that you had a responsibility and a connection to public life. That's just not part -- it's nothing wrong with people, it's just that that's not a reflex anymore. We have to reach out, especially hard, to connect with them and draw them in.

MR. TAUBMAN: So I think one of the things you're doing, some may know it's a Defense Innovation Unit Experimental, DIUX. The Defense Department has set up these units in Silicon Valley, Boston and Austin. You're planning one elsewhere?

SEC. CARTER: Sure. We're going to keep going because there's lots of good technology up to the United States. And it's a great thing, you know, it is a cyber world and we can all talk to each other over Skype and so forth. But animal proximity matters.


SEC. CARTER: And having somebody in the neighborhood who is from us and of us and reaching out and trying to meet people on their physical and really mental territory matters. And so I'm grateful to Stanford, which was an important part of helping me set up DIUX down at Ames, then up in Boston which has a somewhat different technological center of gravity from the valley and that's good.

And then just last week out in Austin, vibrant, vibrant technological community and people who -- if you talk to somebody who hasn't been part of this, and you give them a chance, these -- these are young people who want to make a difference. And they want to have what's up here.

They're just like all people Hoover -- younger Hoover scholars. Same thing, same as you, they want what's up here to make a contribution. When you tell them they can do that in the field of national security and that that'll be really meaningful and you'll make it possible for them to do it, enough to join the military -- that would be great if they did. But we'll find some other way to make it possible for them to go in and out, do it for a time, then go off and do something else, broaden themselves in some other way.

And recognize that kids are different from kids in my day and kids in Bill's day. And we have to adapt if we're going to draw them into our mission.

MR. TAUBMAN: Right. So I think if one is a student of the Defense Acquisition world and I spent a fair amount of my time as a journalist writing about it, it's a very slow moving process, quite cumbersome, bureaucratic. And what you seem to be trying to do is create an alternative universe in defense acquisition.

Agile, accelerated, buying things off the shelf, in effect in places like Silicon Valley or getting involved early on in the development of technologies that you think may have military applications.

So this is not such an easy thing to do, on one hand to accomplish that and on the other hand, don't you face a lot of resistance in the traditional, consolidated defense industry about this and in fact in the military services themselves?

SEC. CARTER: Well, the last part's easy, no. And the reason is they are -- are great companies that have worked for us for a long time. They are in the same situation as high-tech companies that I just described the Department of Defense itself being in, namely, needing young, good talent.

Needing to draw people into them, to the importance of what they do. And so there's complimentarily, every time I get someone to work on one of our problems, that's someone potentially who's going to work for them.

It is, in many cases, it's a small company that they will buy. And so this becomes a feeder for the traditional defense industry which, you know, I was secretary of technology and logistics, essentially the job that Bill had for Harold when Harold was Secretary of Defense and he knows it extremely well.

And it was a different era but in this respect it was the same. There are things that take 10 years. You know, you're going to build a -- design and build a brand-new ship class or something that's going to take a little time. What you can't afford to do in today's world is make everything take that long, because I mean you just look around you.

The world of technology is changing too fast. You'll fall behind and people won't want to work with you because they're not going to work with people who fall behind. So it's a double whammy if you can't be agile. So we do -- we need -- we need to do that and we're -- the war's oddly -- war's not a good thing but it's a spur to agility because you can't -- you can't stand to not be there on time with something for somebody who's -- who isn't just getting ready for some hypothetical fight.

They're actually fighting today. And so we learned a lot about agility during that period. And I myself learned a lot about it. So our acquisition system, believe me, I'm the last one who's going to tell you, everything's perfect there. But the companies are in the same boat we are. And the same boat basically everybody in our system -- every major institution, which is they're trying to get young people, especially young, talented up-to-date people in their environs.

And working on the problems that matter to them, I mean look around you. Just about everybody here in this whole town and this whole country is doing the same thing, competing for the faces you see around this room that are bright, have a future, up-to-date. We got to do the same if we're going to stay the best military.

MR. TAUBMAN: So let's take a concrete case which is North Korea. So we've got --

SEC. CARTER: Not at the agility.


SEC. CARTER: Just checking.



You know, the Missile Defense System that the Pentagon has been working on for many years is shall we say not perfect. And so my question is, when you think about what you're trying to do with DIUX and other acquisition, what do you imagine would be outcomes that would be applicable to the North Koreans?

SEC. CARTER: Well, first of all, I mean North Korea is just to be deadly serious about it for a moment and Bill Perry is someone who himself, tried very hard to get on a different -- get us on a different path with North Korea but it wasn't to be. They are what they are, and it's not a game.

And it's not in the headlines a lot and so forth but we every day, the slogan of U.S. Forces Korea, as many of you probably know, is fight tonight. Not because that's what we want to do but because that's what we have to be able to do. And we are ready to do.

So we have a very strong presence there. Our South Korean allies get stronger every day. That's not the rock army it was once upon a time, they're extremely good. But we have a strong ally in Japan. But unfortunately, the diplomatic picture is bleak at the moment.

And we continue to be open to an improvement in that and try to get Russia and China and others interested down that road but it's hard to project that that's where it's going. And therefore for me, as far into the future as I can see, we need to stand strong in deterrence.

Now, you mentioned missile defenses as well and I'm going to differ with you just a little bit, because we do try to stay ahead of the North Korean missile threat. You're right, missile defense is a difficult mission. And when it comes to a major nuclear threat like that posed by Russia, we know and have long known we have no way to protect ourselves, except deterrence.

But we don't accept that with respect to North Korea and we're not going to for as long as we can possibly avoid it. And so we do aspire to protection of ourselves. And we invest a lot and we try to stay ahead of what they're doing, numerically and also qualitatively.

But it's -- I mean you've got North Korea, we've got Iran, you're talking about problematic situations, Russia, the Asia-Pacific generally and then of course ISIL which we need to destroy. So we've got plenty to do today.

But North Korea is one of these things that just never seems to go away. I worked on it once, once upon a time, 1994 I think. Well, I at least spent half of my time as the assistant secretary of defense working for Bill Perry, 1994. And it was deadly serious back in those days.

Can I tell you a Bill Perry story that I just got to get out of here before I need to go? Because -- and it's really aimed at some of the Hoover people here who are trying to figure out where they're trying to go with their lives and whether to continue to do what you know, Bill's done, what I do as secretary and but more importantly our, you know, 2.8 million folks to -- which I think is the noblest kind of way to spend your lives that you can have, which is protecting our people, and trying to make a better world.

There's just nothing better to go home and tell your family you've been doing all day than that. And so trying to lure them in. And I -- a little story. Bill -- Bill wouldn't know this. See, I may have told you this story before. But you didn't know at the time.

I was a physicist, totally absorbed with physics, no idea of anything else to do except physics, physics, physics. And I went to a -- a scientific conference. And it was here in Washington, and I came.

And there were sessions and sessions and sessions about physics and element and particle physics, which was my field. And there was one sort of physics and the public interest kind of panel -- or not panel, speaker. And I go there, and I just larked, and I didn't -- you know that hour was free.

And I sat down, and there was a -- a -- a person from the Defense Department, Perry I realized later -- years later probably. And he was being essentially badgered by the audience about smart weapons. And the -- the -- the question that they thought was a gotcha question to Bill was you know what are you going to do when one of these complicated you know microchip-enabled things breaks?

You -- and I -- I'll never forget the phrase. And by the way, sergeants today would be furious at hearing this. And so you know how's some sergeant going to fix that chip? And Bill said, well, they're -- they're -- he looks at them and he said, they're not going to fix it. They're going to throw it out and get another one. It's going to be that cheap.

And I remember -- and the whole audience went. And I remember this. And I said to myself -- I said, now, that's an interesting answer. And there's an interesting guy. He's a smart guy. And a tech guy. Look what he's doing. Look what he's doing."

And -- and -- and a little light went off that later down the road, when I got kind of lured into this as many of you I hope will be, by that offer, you know just do it for one year. Here we are 38 years later or something like that. And there was a little spark in there. And I said, wow, that guy's something else.

And you -- I'm sure you don't remember that. Maybe you gave that speech a -- a million times.

But for one young person in the audience that said, wow. Connecting mission and understanding pretty -- pretty cool. And it stuck in my mind.

MR. TAUBMAN: So, when one thinks about autonomous weapons -- fully autonomous weapons, even semi-autonomous weapons like drones that we're using today. Of course it raises you know possible visions of the future where we have nuclear-tip missiles aboard unmanned submarines controlled by machines. Is that something you can imagine?

SEC. CARTER: Well, I believe that in the matter of the use of lethal force, there will always be -- at least speaking for the United States -- a human being involved in decision making. I think that's necessary. And I -- I don't anticipate that not happening.

Systems that are -- have greater and greater degrees of ability to carry out certain functions for themselves are growing increasingly autonomous. I -- I -- I mean most cases, you really need to continue to think of a human machine overall system, even though the machine gets more complex.

SEC. CARTER: But -- and just interestingly, before all this discussion started, I issued a directive -- this is sort of eerie because I -- not only was I undersecretary, but I was deputy secretary of Defense too, and as was Bill.

But as deputy secretary four years ago, I did a -- a directive which says exactly that. That there will always be -- there always needs to be a human being in the decision making involving the use of lethal force by the United States military.

MR. TAUBMAN: So you know when we think of technology today, we also are finding the down side of technology, in the loss of privacy particularly. So, as you launch these programs what -- what are you doing, if anything to try to also launch consideration of the legal, political, and perhaps even moral questions that will be raised by new defense technologies?

SEC. CARTER: Well, I just gave you an example of -- of -- of us trying to look ahead. This was now four years ago when we were talking about autonomous systems, and people. And so we do -- we do look ahead and -- and think ahead.

In so far as privacy is concerned, and particularly internet privacy, one thing I would say to you is that we are enormous consumers of information protection technology because there's nothing -- nothing more important to us. That is our principal cyber mission.

That is what I tell our cyber people both in cyber command and around the services. That's job one because all of our stuff today -- there's no point in having all those planes, and tanks, and ships, and everything else. They're all connected today.

And so we have to have our network protected. So we are big supporters of, and big sponsors of network protection -- the largest in the world by far in terms of what we invest, and level of protection we demand.

MR. TAUBMAN: Because you know I think we see almost weekly stories of supposedly impervious systems that are hacked. And it -- it raises a specter of a future in which defense operates so heavily through these systems, that they are vulnerable to hacking.

Bill often talks about a miscalculation and possibly having a nuclear war. You know aren't we going to potentially leave ourselves in a situation where some of these systems can be taken over by foreign powers or terrorist organizations?

SEC. CARTER: Well, we -- not in the case of a nuclear arsenal. There's kind of a -- a special case where we had special safeguards that I -- I do have confidence in for other reasons, not to be gone into here.

But in general, you're right. We worry about it, we're concerned about it. Those -- anybody who thinks they're invulnerable is kidding themselves. So, for us that means it's a constant battle. We're constantly looking.

I'll give you an example in a minute. And -- but you also have to be thinking, what if I lose that connection or I lose that ability. So we train our people to -- what we call it, operating through an attack of that kind. So, you have a full back -- fallback operational mode and style that is not complete prostration if that happens. On the protecting ourselves front, I just want to mention one of the things that I've done that is -- that is an innovation, which I'm always looking at suggested to me by people outside.

And one of the things I -- I do is try to talk to people who are not part of our world, but care about their safety and their family's safety, and their children's safety. And -- and who will take an interest and little time.

I set up an innovation board. Eric Schmidt --


SEC. CARTER: -- Google Alphabet, is the chairman of this -- Jeff Bezos, and -- and Reid Hoffman, who looks at some personnel things that we do.

And what I've said to them is, I don't expect you to know anything about defense. That's not the point. But you do know what agile, forward looking companies and people are thinking. Tell me some things that might -- might be valuable -- might be useful.

We can't use everything because we're not a company. We're the public sector. But -- and one of the ideas that I got early on -- and this is the kind of thing I've asked Eric and the board to provide me more of, is it turns out nobody in the United States Government -- the entire United States Government had ever done what is called a bug bounty, which a lot of companies do. And what a bug bounty is, is when you go out and you invite white hat hackers to have at your -- and then report for a reward of some kind, vulnerabilities they find.

And nobody in the entire government- - we did it, for the -- and it's called Hack the Pentagon. And it was spectacular. We got for free, a friendly, very thorough examination of our attack surface from which we were able to make hundreds of adjustments. And the kind of thing that you can pay for, but you'd pay a lot for it, and wouldn't necessarily be as good.

And we -- in our case, we can't give big rewards or anything. Peoples' -- their reward was having hacked the Pentagon 'cause that's pretty cool thing to do. That by itself is -- so you know, lots of people who did this for us.

Now, there's an example of something that isn't novel out in the rest of the world, but that we -- for some reason, our people had never thought of before. That's the kind of idea I want to get, as I said I can't do -- I can't do everything because we're the profession of arms. So there will be things that companies do that we'll never be able to do, it's not appropriate for us to do, but, there are lots of things that we can do.

That's a part of adapting our style as well as our technological content today and the future, even as Bill did so brilliantly back in the Carter administration.

MR. TAUBMAN: Okay. I think we have exhausted the time that you can spend with us.

SEC. CARTER: Well you get to be with Bill, I'm afraid I have to go do something else and appreciate -- I want to repeat the -- what I said about Bill. Bill Perry was, is I -- as I think about myself now, talking to audiences and trying to draw people in, I was at the TechCrunch Disrupt conference in San Francisco last week and I'm looking at all these faces and a great majority of them -- not all of them -- had not served in the military, this isn't like the World War II generation or the draft generation or anything like that.

And you look out on those faces and you say, how can I connect to them and inspire them with the greatness of doing something in public life? And I'll just say that -- Bill Perry was a very big inspiration to many other people, many other people in my generation but certainly to me. He not only represented that connection of thinking and understanding to service but also great civility and decency. And that matters a lot, he was someone I always knew would do the right thing, stand for the right thing, stand behind people and I think that's important too.

That we all be morally solid for the next generation to the best of our possible abilities and he was. So he had all that and Hoover is very lucky to have him, I think our country and our world are lucky to have him, here's Bill.

MR. TAUBMAN: Thanks, Ash.

SEC. CARTER: Good to see you all.