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SECRETARY OF DEFENSE ASH CARTER: I just spoke at some length about the changes that we're making today in DIUx, going to DIUx 2.0.
This is building on the success and the experience that we've had, which has made me both more confident in the model and wanting to do some things differently as a department, because one of the things we've learned by connecting to the tech community is ways that we can change in order to make working with us easier.
And that is one of a number of changes that we're making to signify the movement from DIUx 1.0 to DIUx 2.0. And part of that is a new management structure which involves Raj Shah. And I -- I explained Raj's background earlier -- National Guardsman, F-16 pilot, combat veteran, also cofounder and CEO of a successful technology startup. So he knows -- he knows both sides of things.
And my intent with DIUx is to make there be more people like this who understand both sides of things, who come from the tech community and contribute to our vitally important mission and people who are already part of the Department of Defense to get to know the technology world better and how -- what its methods and ways of operating are so that we can work with it, and in some ways we can work better like it in terms of being agile.
Agility is critical in today's world. It's a competitive world. And so DIUx in this transition or phase and in every other one we undergo in the future, you'll see us constantly learning, constantly being agile. That's what it's all about.
So, with that, let me take you questions.
STAFF: We have time for a couple of questions -- (inaudible).
Q: Mr. Secretary, you mention the reservists. What role do you expect them to play under the managing and other directors?
SEC. CARTER: Reservists are this tremendous reservoir of resource -- technical resource for the department. They are people who part-time work for us, and so -- and that signifies, and they're all volunteers, that they care enough about our mission to give some of their lives to that; some of their time to that.
But during the rest of the week, they are leading engineers, project managers, managers of all kinds in the leading technology companies in our country. So what a great gift that is. These are people that we can't expect to have in those numbers and at that level of career experience in the Department of Defense full-time, but we get the use of -- (inaudible).
I'll give you a specific example of it that is just to show you this is nationwide. When I was up in Seattle a few weeks ago, another great tech hub of the United States, there is a reserve unit there that focuses on cyber. And they're one of our key tools. They are, for example, hardening our nuclear command and control system to cyber attack. I can't imagine anything more important than that.
Who is it being done by? It's being done by reservists that are based in Washington state who work there on weekends and evenings, and at Amazon and Microsoft and other great companies in the region by day. What a wonderful way to get talent. That's how the mechanism works and we're determined to tap into that talent. It's another way that we can get access to that technology talent.
Raj will be using that -- (inaudible) -- using that around the country.
Q: Mr. Secretary and Mr. Shah, one thing you alluded to today. I believe, Mr. Shah, you actually said we have our work cut out for us. Can you elaborate a bit on -- I guess on the culture challenges of kind of changing the culture both here in the Valley, back at the Pentagon in terms of -- I don't know if it's distrust or just a lack of familiarity in getting these different groups to work together more?
SEC. CARTER: Well, one of the things that DIUx has taught us in the department is to look at ourselves more closely and see whether we need to change in order -- and in how we interact with the tech world. I'm not expecting the technology world to change; it's a big global ecosystem. But there are ways that we in the department can change, and that was one of the reasons why I set up DIUx in the first place, is to give us that kind of feedback. Where do we fall down in our ability to -- (inaudible)?
And so I've learned from that and we -- we will incorporate into DIUx 2.0 both (inaudible) and what it advises me and the department as a whole to do in terms of action, in how we fund, how our people are trained and how many opportunities they get to know the culture, as you call it, of the Valley, ways that we can open our mission to people in a way that's compatible with their lives.
One was just mentioned, which is reserves. Fellowship -- there are all these ways -- (inaudible) -- people, technology and mission and money; those are the main streams. In each of those, we've learned something as a department. That's one of the reasons why I think that DIUx is such a critical thing.
So I'm not expecting the technology world to be more like the Pentagon and we'll never be like a company because we have a very important mission and we represent the profession of arms. But that's doesn't mean we can't learn from how the innovative world of Silicon Valley operates, and I'm determined that we learn that. So that's how it's going to happen.
Let me see if Raj wants to add to that.
MR. SHAH: Yes. I mean, I think the -- the key one is, as the secretary said, is we need to operate at the speed of business and operate in the -- the processes that are out here. So we are, you know, going to take the -- the -- this transition time to really hone programs that are -- that are relevant, that are supportive and ultimately achieve our mission, which is how do we bring the innovative technologies in support of -- (inaudible).
STAFF: Patrick?
Q: Thanks. You announced DIUx a little more than a year ago and already you're making a big leadership change. Sometimes, a change that drastic is seen as a sign of trouble. Why is that not the case here? And can you point to some very specific examples of success in your endeavors so far?
SEC. CARTER: Well, no. It's a sign of confidence in the -- the -- but it's also a -- which I have, and that's why (inaudible) going to be more to DIUx and why I'm taking such a continued strong personal interest in it. I'm proud of what it's done, and what it's done is very valuable. At the same time what it has taught us is that there are some ways that we can improve both DIUx and the way that the Department of Defense connects to the (inaudible) tech community.
So the -- the ledger is the -- the successes are the things DIUx has done and what it's taught us. But it's also true that some of what it's taught us is not DIUx shortcomings, but about our shortcomings in the department as a whole. That's what we've learned. That's a valuable lesson in how to be more agile and better connected, and I -- I think we need to admit when we need to change.
That's an important part of continuing to be the best military in the world. So I'm proud of what we've done, but I'm determined to step up when we see things that we're not doing as well as we could do them, or that we need to differently. That's the whole point of DIUx.
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STAFF: The gentleman in the back?
Q: Thank you.
Secretary Carter, in the context of your third offset strategy, could you talk about the challenges of trying to find military advantages from technologies like artificial intelligence, which are open and often happen outside of the military realm? Can we expect a military advantage?
SEC. CARTER: Well, I think we can expect to be as up to date as the field is, and to lead in the security applications of it. I know that we won't control or determine the path of an enormous field like that, which is global and which is -- has enormous commercial sponsorship.
And that's different from 30, 40, 50 years ago, when we could expect to control the destiny and the pace of a technology field. The reason for things like DIUx and everything else I'm trying to do with technology is that's not true anymore. But we still can stay the best military in the application of that technology. But to do that, we need to be up to date. We need to be connected, and we need to be agile. That's what DIUx and everything else we're doing is all about.
And that's what we have to do to remain the best, protect our people, create a better world.
STAFF: Trying to get two quick ones, if we can.
Q: Thank you.
Mr. Secretary, in your conversations with Silicon Valley CEOs, what is the biggest complaint that you hear from them? And what are you doing specifically to try to address those concerns?
SEC. CARTER: The biggest complaint I think is that the Department of Defense too frequently insists on doing things the way it does things and has always done things. And so they want us to change and to find different, innovative ways of doing things -- not everything we do, but some different mechanisms for dealing with people, like the Reserves that we just talked about; some different ways of dealing with funding so that we can take more risk, be more experimental, be more rapid in funding.
And so I actually welcome that. I welcome that feedback. And, see, I wouldn't have that feedback without DIUx. That's the whole point of being out here. So when I get something -- when I hear something from a CEO who says "I'd like my company to work with you, but you guys make it really difficult for us," that's an important lesson for me.
I'm not expecting for him to change his business model or shortchange his employees and investors. But I am expecting us wherever we possibly can to change in such a way that we make it possible for our very best people who want to work with us to do that.
STAFF: Last question.
Q: I just wanted to do a follow-up. You said if you find that you're not doing things as well as could be done. Can you give an example of what kind of things you feel you could have done better that led to this management change?
SEC. CARTER: Oh, well. Yes, two immediately. One change I'm making today is to have DIUx report directly to me. And -- (inaudible) -- well, why are you doing that? And I'm doing that, and of course, I can't afford to do that for everything in the department. It's not just because of the importance of what Raj and his colleagues are going to be doing here, but because of the need for rapid decision-making.
And I think one of the things we learned from DIUx is that the Department of Defense is frequently not rapid and agile enough. And if I can't show -- and so if I show that from the very top, agility in decision-making, adaptability, the ability to sense that you're not getting somewhere and change course and go somewhere else, I want to show that coming from the top and I want to support that coming from the top. So that's an area in here.
And another one is the ways in which we fund. We have -- and George and his colleagues and now Raj will do the same thing, have been exploring all of these different ways that we can be sponsors and supporters of a field like artificial intelligence, where we're not going to dominate, but we want to get in the swing. We want to be a participant. We want to be part of it.
And -- and money is one of the ways you do that. And we need to be creative, innovative -- and innovative in the way we fund those who are conducting research and development on our behalf. And so that's -- (inaudible) -- where I'm not satisfied we've explored all those ways and we're exercising -- (inaudible).
STAFF: Thank you, everybody. Appreciate it.
QUESTION: Do you have the authorities you think you need, sir, to do that kind of -- (inaudible)?
SEC. CARTER: No, I'm sure we don't. When we -- when we need more, we'll ask. And of course, in some cases our authorities are enshrined in law. And where we think we can do better, we'll ask the Congress to give us support to change the law. I'm sure they will because they -- members of Congress want the same thing we want, which is be the best, agile, and also be efficient with the taxpayer dollars.
STAFF: Thanks, everybody.
SEC. CARTER: Thank you.