Remarks by Secretary Carter in TechCrunch Disrupt Fireside Chat, San Francisco, California

Interview

Q: Thanks for that introduction, Jordan. I really appreciate that. That was good.

Mr. Secretary, thanks for coming today.

SECRETARY OF DEFENSE ASH CARTER: Thank you for having me. Appreciate it.

Q: I'll tell you, you travel with a lot of people.

SEC. CARTER: Yeah, they're watching the rest of the world while we're doing this. So, a big world out there.

Q: I really appreciate it, but I'll give you a little secret. Last year, we had Snoop Dogg here. And his entourage was bigger than yours.

(LAUGHTER)

SEC. CARTER: I'm sure -- different reason, but, no. I appreciate -- appreciate your having me; appreciate everybody being here.

Q: Great.

Well, secretary, you're the 25th secretary of defense. Yet, you were the first one to visit Silicon Valley. What took so long?

SEC. CARTER: Well, that's a good question. And all I can say is that for us to do what we need to do, which is protect our people and make a better world for our children, it's a competitive world out there. And we need to be the best.

And one of the things that has made us the best for a long time is the great innovative culture of the United States, represented in this room, and being able to connect to that.

Now, when I started out, you -- when...

Q: Jordan, yeah.

SEC. CARTER: ... introduced, when I started out in physics, it was a different world. And the bridges between the government and the tech community were bigger and stronger. The tech community was mostly American, a lot of it dependent upon the government for funding.

Today, it's global. It's vibrant. Much of it takes place independent of the government. And that's fine. That's good.

Q: Sure.

SEC. CARTER: But it means that I have an extra responsibility to try to build bridges to it and keep that connection strong.

Q: Now, you must understand that there are trust issues with the government here in Silicon Valley. What sort of reception have you received?

SEC. CARTER: Well, first of all, I understand that. And I absolutely respect that. And the only way to deal with that is to listen carefully and to dialogue and try to solve problems together.

What I find out here is that people are doing what they're doing out here because they want to make a difference. They want to do something of consequence in their lives. That's why they're doing what they're doing.

And when I say to them if I come and meet you halfway, you can participate in something of really great consequence, which is, you know, providing security for our people so that people can get up in the morning, go to work, take their kids to school, live their lives, dream their dreams.

SEC. CARTER: It's very important. Nothing else is possible without it. We can't take it for granted. We have to work at it. And that's something of great consequence.

And I'll try to make it such that you -- I find that animates a lot of people. But they want to know that it can be done in a way that's consistent with their lifestyle, with their values, and with everything else they're doing in their lives.

Q: Sure.

SEC. CARTER: So that means I need to change the way we behave, so that we can interact with people in a way that's sort of more user- friendly.

Q: I -- I...

SEC. CARTER: When we do that, I find that the uptake is good.

Q: I ask this not because of just Snowden and Prism, but we are one mile away right here from the listening room Mark Klein revealed that the NSA was using to monitor overseas and domestic traffic in 2006. So give me something specific that you've done to rebuild this trust.

SEC. CARTER: I'll give you a number of them. One is right down the road here. I thought it was important to have an outpost here. And one that was -- that experimented with interacting with and connecting in ways that were mutually acceptable and rebuild those bridges of trust and practice. That's the Defense Innovation Unit Experimental down the road here in Palo Alto.

And that is the first of several outposts in the tech hubs around the country. And it's to create a presence here so that people can get to know the problem sets that we're working on and their importance and how fascinating they are, but also give them a way to connect.

Another thing I did in order to help me, as I like to say, think outside the five-sided box of the Pentagon...

Q: Do you do that often?

SEC. CARTER: ... is -- yeah.

Q: Sounds like a pretty good... (CROSSTALK)

SEC. CARTER: Well, it's -- we have to do it, because in today's world if you're not open to what's going on -- you have to be open in order to be the best. Everybody knows that. And we need to be open, too.

I asked Eric Schmidt to chair an innovation board to advise me on how I can keep building these bridges. Jeff Bezos is a part of that; Reid Hoffman is a member of that. Reid who was here just a short time ago. Really great people. They've got other things they could be doing with their time and their lives. And they have agreed to help me help build once again these bridges.

And I'll just keep going here. We have something called the...

Q: One more.

SEC. CARTER: ... Digital -- I'll do one more -- somewhere here is Chris Lynch, who runs the Defense Digital Service for me -- right over there.

And that is a -- the digital service is something where people can join for just one project or just a period of time. And I've got people from the best companies out here -- Google, Spotify, and so forth -- and they're willing to give it a try. And they come in and do something meaningful like work on our GPS system, work on our enterprise information systems.

And they work directly for me. Chris reports directly to me. They're in my office. They travel with me. And it's a way -- you know, when I started in this business, I was doing physics. I had no knowledge of or really interest in public service.

Somebody gave me a chance. They said -- and this is now ironic, all these years later -- but said, "Hey, Ash, just give it a try for one year; there's a really important problem, and give it a try."

SEC. CARTER: And I did. And I got hooked because it brought together the two things that really jazz you up if you're a person, particularly a technical person. One was that my knowledge was valuable. If I hadn't been in the room, then the right actions wouldn't have been taken. And that was because I knew what I knew - which happened to be physics - for that particular problem set.

And the other thing was, I was doing something - so I was doing something I - that I was good at making real contribution to and that mattered a whole lot, which was defending our - our country and our people. Those two things - you bring those two things together - I can do it and it's really hugely important. That's magic.

Q: I think - I think that's fantastic. I'm also concerned - in order to recruit the best engineers in the world right now, you need to be a bit flexible. Let's say somebody went to Burning Man two weeks ago and partaked in some goodies; are they still eligible?

SEC. CARTER: Well - so - so, the goodies - it depends on what the goodies are.

Q: Well, no, I'm serious.

SEC. CARTER: But - no - well, it's a very good question and we're changing that in recognition of the fact that times change in generations. Changing - by the way - laws change as respecting marijuana and so forth.

And that in many other ways, we need to - while protecting ourselves and doing the appropriate things to make sure that it's safe to entrust information with people - we need to understand - and we do - the way people are - have - lives have changed. Not hold against them things that they've done when they were younger.

And so it's an important question and the answer is yes, we can be flexible in that regard. And we need to.

Q: Yes, that sounds good. Let's go back to the Defense Innovation Unit - the Experimental -- the incubator you set up here in the Bay Area shortly after becoming secretary. From what I understand, the first version of that program didn't result in many projects being accepted by the Pentagon.

Q: Right. That's right. So, we relaunched it last May.

SEC. CARTER: Correct.

Q: What changed between the two versions?

SEC. CARTER: A number of things. And yes, I mean - it's experimental so we did the experiment and we said, "Woops, our first shot at this didn't have it all right." So, I changed a number of things. The principal issue we were having was speed. We weren't as agile as the people we wanted to connect to want to be.

Q: Sorry to interrupt, but when you say, "we," can you be a little more specific?

SEC. CARTER: We, the government, particularly in the matter of dispensing money for innovation. It took too long and, you know, people here, if you tell them they've got a six month horizon or a one year horizon, that - that - that - that's too long for people. So, we needed to shrink that horizon.

We found some ways to do that. That was an important part of the new founding. We flattened the leadership very dramatically; we made it so that it reports directly to me, which allows it to respond more quickly. And, by the way, I should say we also - we opened another branch in Boston - another great technological hub - and stay tuned.

You'll see us doing more - in fact, very soon - in this same area. So, it's successful, and that's why I'm build - the idea is right. That's why I'm building on it. At the same time, you need to know - and I know you all know here - if you're heading down a certain path and it's not working right, you need to quickly jump to an alternative.

Q: That doesn't sound like a Pentagon mantra; that sounds like -

SEC. CARTER: -- no, it doesn't.

Q: -- some of these people are -

SEC. CARTER: I wish - I wish we did everything that way. We don't. But in this respect, it's important for us to match - it's part of building a bridge and meeting people halfway.

Q: Sure. Great. If I was a start-up founder or a company, what sort of technology should I build if I'm looking to get a contract from the government?

SEC. CARTER: Well, we're - we are present across the entire technological spectrum, from tech-tech and big data, automation, strong encryption, which is very important to us, right through to bioengineering -

Q: Do you have anything in photo sharing? These people are really good at that.

SEC. CARTER: Yes, I - believe me, we have everything. And if you have an idea or a technology that is -- you think is germane to a problem in national security, which is going to be pretty much anything, get in touch with Raj Shah, who is the director of DIUx - that's what DIUx is for, so that people can say here is something I am doing that is really innovative.

I believe it has an application - or I would like to see whether it has an application, would you connect me to the people who might find a use for that and who, by the way, might fund it also and we'll do that - the point about agility is we'll try to do that fast.

Q: Are you hoping that Silicon Valley rubs off on the Pentagon or even, I'm sorry to take it one step farther, Beltway Companies?

SEC. CARTER: Yeah, I am in the sense that we -- and the companies that work for us now that do fantastic work. I mean, we have wonderful, wonderful systems and - and I do not want to diminish the extent to which major companies in today's world are themselves being and striving to be more innovative, and that includes all the folks who have traditionally worked for us.

So they're in this with me. They also want to become more innovative. They want to attract good young scientists and engineers to their businesses, just like every other business does, and I think they recognize, like we recognize, and everybody does, that in today's world it is competitive and you only win when you keep striving and you remain open. And they are the same way I am and that everybody in this room is.

Q: So let's switch gears a bit here. Let's go back a few weeks. A few weeks ago a group that may or may not work with the NSA, the Equation Group, was hacked and some malware they had was dumped on to the internet. How did the DOD re-secure its network?

SEC. CARTER: Well I cannot speak about any particular case, and of course - just to be clear -- in any case of that sort where situations like that emerge, it's a law enforcement matter, not a defense matter. So I need to defer to the law enforcement people in that area.

But let me tell you - go to the end of your question, which is, you know, what are we doing to secure our networks. This is where I say strong encryption is so much in the interests of the department. I know there's a big discussion of encryption.

We are staunchly on the side of strong encryption because we depend - all of our systems, you know, all the planes, ships, tanks, there's no point in having any of that stuff in today's world, unless you can connect it all.

And so we are very dependent upon networks that are secure. And are our networks secure?

No, not -- and that is -- we spent an enormous amount of effort, an enormous amount of money on that and by the way, that is one of the areas where we welcome help people to come and help us and it's one of the priorities for both the defense and innovation unit experimental and the defense digital service and the defense innovation board and all the other things I'm doing.

Q: So if the U.S. government, the Pentagon, the Department of Defense is urging for strong encryption, shouldn't that be a fundamental right for Americans to also have access to the strongest possible encryption?

SEC. CARTER: Well, yeah, I mean, we are very much in favor of strong encryption. You are raising the question of at what point is it important for public purposes for -- public purposes that we all share -- for us collectively through our government in an appropriate way, to have access to information, for example, for law enforcement purposes.

SEC. CARTER: That's a deep and important question. And here's my take on it.

Q: Please.

SEC. CARTER: You know, first of all, we're not -- there isn't going to be one technical solution to this. And I know that people talk about back doors and all this stuff. This is -- in order for us to work through this, we're going to need to work through it in partnership.

I think it's incredibly important that the community that built, operate, innovates on the internet, enjoys internet freedom, values internet freedom, work with the government -- which after all, we are you.

Q: Sure.

SEC. CARTER: We're here to protect the collective. To find a way to balance the public purpose and what we all want and have, which is a free and open internet. I think there are ways to do that. But I don't think there's one way and I don't think there's a way that's going to be invented by the government. This is going to be something that we're going to have to work through together.

And I'm committed to working with people out here, importantly, to that end.

Q: Now, you brought up back doors. And that is a big part of this discussion. Back doors are available through zero-day exploits -- exploits like the FBI used to crack the iPhone in the San Bernardino case.

Should the government forward these zero days? Or should they disclose them to the companies to have them fixed?

SEC. CARTER: Well, just to be clear, we do work with companies. Because after all, we are -- our -- one, it's not -- I'm sorry -- I shouldn't say it's not the Defense Department -- but it is the law enforcement and the homeland security communities do work with companies in the United States to help them protect themselves and give them information where we have it about vulnerabilities and about who is doing what to whom on the internet.

That's part of our -- the government's general mission of protecting the people. I think where the debate has come in is in what ways is the collective's interest in protecting itself in some reasonable way, and the company's need to safeguard their own networks and their own data.

Q: Sure.

SEC. CARTER: Where -- where do those two things come into tension? And they do. You gave an example. Now, the only way to deal with that is to work openly with the people out here. That's one of the reasons I want to have that relationship. There's no way we're going to come up with some right answer to that all by ourselves. I know that.

Q: I ask the question because as I was backstage with your dozens of people, you have people using iPhones and Android phones.

SEC. CARTER: Sure.

Q: And these type of devices are vulnerable to zero-day device or zero-day exploits. So to me, it makes sense towards national security to work with these companies. But others in the government feel differently.

SEC. CARTER: Well, I -- I -- for national security purposes, as I said, data security is absolutely vital. I don't think there's any controversy about that anywhere, or at least anybody who really understands what the needs of defense are...

Q: Well, I think there are some of those people...

(CROSSTALK)

SEC. CARTER: ... and how defense works. But when it comes to this question of how to both have our collective protection and have a free and open internet, there isn't going to be a single answer or a technical solution or a government imposed answer to that.

That has to be something we work through case by case with the people who are the innovators and the businesses that also depend on the internet as we do.

Q: Right, right. Well, I appreciate your time and we're almost done with my part of it. We're going to bring out Jordan here in a second with some questions that you folks all asked earlier.

She wrote them all up on note cards so I can ask them. But before we do that, you're going to be out of a job in a few months. When the new president's inaugurated, more than likely you will be replaced.

But there is precedence to have you serve the next president as well, Robert Gates did it. He served both Bush and Obama. Will you serve the next president?

SEC. CARTER: I'm completely focused on serving the president who made me secretary of defense. We have all kinds of issues like the ones I just named. We need to and are going to defeat ISIL.

We have to deal with deterrence of North Korea, checking the Iranian malign influence, dealing with Russia, China. I got my eyes -- I'm completely focused on what I'm doing right now. I've got a lot to do and that's really what I'm focused on right now.

Q: That was good, good non-answer. It's completely fine. So we'll have Jordan come out, she has some questions for me.

SEC. CARTER: Hi, Jordan.

Q: Hi there, secretary. Do I need to have the dogs sniff this first or, OK.

Q: OK this one comes from Kate. You asked to do this too, by the way.

SEC. CARTER: No I did -- I did and I really much -- I very much appreciate the opportunity.

Q: Your people had to talk us into doing this. We don't normally do this.

SEC. CARTER: OK well, I'm grateful, I'm grateful, I'm grateful for the chance to -- to talk -- talk to people and also to hear from them.

Q: Yeah, great. So this one comes from Kate; it says, it's been reported that you want to split the NASA and Cyber Command into two separate organizations. What would the benefits of such a split be and what are the drawbacks?

SEC. CARTER: Well, we haven't made any decisions in that regard, yet. But let me tell you why the question arises and what the current circumstance is.

Q: Sure.

SEC. CARTER: At the moment, we have the National Security Agency which is part of the intelligence community which is managed by the Department of Defense for the intelligence community. And CYBERCOM which is a combatant command who's first job is to protect our networks, that's job one for Cyber Command.

Q: Sure.

SEC. CARTER: They are separate organizations but we have deliberately managed them in such a way that they had a single director and work closely together. And the fundamental reason for that is that -- and you all know this -- there aren't -- just haven't been enough good people to go around and populate two missions.

So we had them both in the same location and able to work with one another. That has worked very well but it's not necessarily going to -- the right approach to those missions overall in the long run. And we need to look at that and it's not just a matter of NSA and CYBERCOM.

If you look at each one, we are asking ourselves questions like what's the right mix of people. Military? Civilian? Contractors? How do we get people who can come in and out...

(CROSSTALK)

Q: What's the timeline on making the switch?

SEC. CARTER: We don't have any timeline, we're not -- we don't -- but we're looking at this question -- by the way, we're not the only ones. Congress is, as well and that's absolutely fair. And it's reasonable that the question arises because it's basically a management question and it needs to be resolved, in such a way, that we're best able to do these two related missions in to the standard that, the public should expect --

Q: Right.

SEC. CARTER: -- of us. And we all know that good people are key to those missions and good people are a finite resource. So we're going to try to manage around the people.

Q: Right, you're going to love this one. From Max, do you think Snowden should be pardoned?

SEC. CARTER: Well, again, it's going to be a law enforcement question. So let me just talk about --

Q: We only have six minutes and 57 seconds on the clock.

SEC. CARTER: I can't answer that particular question. I will say this, we, all of us who enjoy the public trust and therefore who handle classified information have a responsibility.

And I think to arrogate to one's self the authority, and to basically take something that has been entrusted to you. That is something I can't condone. It, we have lots of avenues for, there are plenty of other avenues in my judgment, for an individual to make their concerns known.

Q: So what your talking about - -

SEC. CARTER: This did tremendous harm to our security. It did tremendous harm to many American companies and their competitive situation in the world, and complicated our relations with foreign powers. And you know, there are 300 million of us in this country, we can't all, particularly when we have a special trust, we can't all just decide by ourselves.

And I object to that. I, I, I truly object to that. That is arrogating to ones self a power to do things to other people, that was not part of the deal when you were entrusted with that information in the first place.

Q: Right. Thank you. This one's a lot more fun. I promise. It says, we received several audience questions about DARPA. What lies ahead in your strategy for DARPA and how can starts up and enterprises get involved in that innovation?

SEC. CARTER: DARPA's another key part, and by the way, goes back along time that has kept itself very fresh, in terms of being a bridge to the technology sector of the United States. It does it by being smart, having good people.

DARPA staffs itself, by getting technologists to come in and work for DARPA for a little while, you know. They're not permanent. They're not to give their whole lives to the government forever. They come in, but as a, and they do this work and as a consequence the DARPA is technologically fresh.

It also, like DIUx is able to act quickly. That's really important. And in terms of fields, DARPA, DARPA's big by the way, several billion dollar organization, and it is, it covers the whole gamut, that I talked about before, bio up through IT type tech and everything in between and around.

It's extremely well run, run by somebody from the valley here. Arati Prabhakar, who's a fantastic director and many of the people who work there are from the valley. And they've done great work over the years, including the internet.

Q: I think you guys could fix the deficit if you open it up for tours and charge like Disney World. I would go. So, great. The CIA has its own VC arm in In-Q-Tel. What is the DOD strategy for investing in startups and developing new technologies relevant to national...

(CROSSTALK)

SEC. CARTER: I - I think In-Q-Tel's been a - a really interesting innovation. I commend the intelligence community for doing it.

We're actually - another thing I'm doing is piggy backing on that. And so we are going to invest in and participate in In-Q-Tel because I think they got a winning mechanism there. They've got a good reputation.

They got a good connection with technologists, and they've got a good way of supporting innovative ideas. And they've been good for the intelligence community. I think they'll be good for defense as well.

Q: You know some powerful VCs. You know Marc Andreessen and Reid Hoffman. Do they participate in any way in the (inaudible)?

SEC. CARTER: Well, as I mentioned, Reid is a member of my Defense Innovation Board. I'm known Marc Andreeson for a long time - an enormous respect for him.

I mean, what I'd say about both of them, and Jeff Bezos, and Eric Schmidt and so forth, I'm so grateful to them that they are willing to take the time to help us out. We can't do what we do, which is protect our people and as I said make a better world for our children. We can't do it without the best people being with us.

And I'm so grateful that they're spending their time. And I think what they reflect is what I sense a - a - a lot out here, and the thing I'm trying to connect to, which is people who make a difference - want to make a difference.

And they look at the mission of national security, and they - I'm not - they don't have to believe we're doing everything right. That's not the point. They just need to believe that the mission is important, and that they can help us do it right.

And if that grabs them, which is has in the case of the individuals you named, that's a blessing for our country and our world that our most innovative people are willing to spend some of their time working on our - our collective betterment and our collective protection. I think it's - it's incredible.

I take my hat off to 'em.

And - and what I'm - the reason I'm here, and the reason why I'm grateful you're having me here is to - that I hope many of you in the audience, and many of you watching who share that spirit, will find a way to connect to us.

We're open-minded, open eared. We need the help, we know that. And we're willing to meet you half way.

Q: So, let's try to sneak two more in here. This is from Ian.

Drone started as military tech decades ago, but became a consumer commodity seemingly overnight. What is the military's tech today that'll be in consumers' hands ten years from now?

SEC. CARTER: Oh, I think there are a - a - a lot of things that we're doing...

(CROSSTALK)

Q: You guys have lasers now. When can I buy a laser?

SEC. CARTER: Yeah, well - and there are some things that fortunately there's no commercial market for. And...

Q: I don't know.

SEC. CARTER: Perhaps very high energy lasers are in that category. So we do do things that only we do, and only we need to do.

But much of what we do is - is - is of wider application, whether it's sensing, whether it's computing, whether it's worried about - worrying about the health of our troops...

Q: Sure.

SEC. CARTER: ...repair of wounds, treatment of wounded warriors. All these things have applications.

And so sometimes we are looking outside and simply borrowing what has been down outside. And sometimes we get there first. But, and - in which case, we end up being the ones who provide to others.

SEC. CARTER: The - the case about the internet is one. GPS is one.

If you go back in history, satellite communications, first done by us. The jet engine first done by us, now available to everyone. So it is a two way street, and that's the way it's been, that's way it was when I was starting out in the business.

But it was more tradition then, because that wasn't that long after -- it was a while after -- but not that long after World War II, and everybody had served and everybody knew -- and I don't take that for granted today. Only a few Americans served in our all-volunteer force, that's fine. But every -- when everybody else takes an interest in what we're doing, and is willing to make a contribution if they can, it's a great thing.

Because as I said it, without security we can't have all the other things in life that we value. And so my job is to try to provide that to our people and our world, and innovation's a critical part of it.

Q: Thank you so much for being here.

Jordan is yelling at me but I have one more question here.

SEC. CARTER: She does look -- she does look exasperated.

Q: We travel a lot together.

SEC. CARTER: I'll be short.

Q: You're an expert in domestic and international affairs -- and this is personal for me. In about three weeks I have to go home, and I'm looking for some advice on a domestic thing. I have to moderate a local school board election. That's very contentious, do you have any advice?

SEC. CARTER: Well, first of all, good on you for getting in there and being a -- a part of things. I think people like to -- if you uplift people and summon their higher purposes and their higher faculties, I -- I find that's a better way to go in everything we do.

And so when I talk to people about national defense, yes they need to know it's a deadly serious business -- it's not a game -- it's an essential thing to do. But I also want them to feel how wonderful it is to be part of something bigger than yourself. And all of public service is that. The public good is an important thing, and I think your great to contribute to it. To give some of your time to doing something that is about all of us together is -- so good on you.

Q: Thank you for turning a dumb joke into amazing advice. I really appreciate it and thank you for joining us. Let's give him a round of applause.

(APPLAUSE)

SEC. CARTER: Thank you. Thanks everybody for having me. Appreciate it.

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