00:00hello everyone welcome to the Asics insi
00:01podcast I'm sonal and I'm here today
00:03with the US Secretary of Defense ash
00:05Carter welcome ash good to be here
00:08thanks sonal thank you for coming here
00:09so you know you gave a speech yesterday
00:11at Stanford and you talked a lot about
00:13ties between Silicon Valley and the need
00:16for partnerships but actually I want to
00:18start with someplace kind of random
00:20which is you once said a long time ago
00:22how you hated GPS yeah and I actually
00:24want to hear why you say that okay
00:27GPS makes us receive signals from
00:32satellites that are in semi synchronous
00:34orbit which are by the way very
00:36expensive to launch and operate we do
00:39that in the Department of Defense so
00:41that expense falls on us but it's not so
00:43much the expense as the fact that that
00:46makes it vulnerable to people who can
00:49attack it it makes it impossible to use
00:52it in the valleys of for example
00:54Afghanistan or a big city where you're
00:56shadowed we okay so you can't from the
01:00satellite signal or in a place where the
01:02signal is poor just like cell phone
01:04signals can be poor so and we
01:06particularly of course in the Department
01:08fence worried about enemy's jamming GPS
01:11signal so what's the answer what would I
01:12like to do and sir watching these really
01:14expensive satellites I call it the GPS
01:17of things and what it there will come a
01:20time soon and we're working on this
01:22we're on a chip you will have an
01:26accelerometer a gyro and a precision
01:30clock so it's like a MEMS
01:31exactly exactly micro electromechanical
01:34system and MEMS and that chip will be in
01:40every object in the internet of things
01:42mm-hmm GPS of things so at the time
01:45every smart object is manufactured it
01:48will also be told what time it is where
01:52it is and what it's orientation spaces
01:54and from that moment on it will always
01:57know those things and it'll never have
01:59to ask a satellite so that's important
02:01for us if it's a bomb for example and we
02:04wanted to guide itself by GPS not to
02:06have to worry about it getting jammed
02:07but it's also good for people who are
02:09keeping inventory anywhere there is now
02:13on a vehicle on your phone you don't
02:15need to be receiving satellite signals
02:17so it's a very inexpensive and
02:19vulnerable way of doing things and
02:21pretty soon will I won't be launching
02:23any more of those satellite tell me a
02:25little bit about where you think that is
02:26gonna happen like when we talk about the
02:28evolution we talked a little about a lot
02:30about how we have a more commercial
02:32driven evolution of technology yet the
02:34Department of Defense is still
02:36accountable for 50 percent of R&D
02:38spending so where do you see that
02:40innovation playing out at what part will
02:42you own and what part will other
02:43commercial players in the ecosystem own
02:45you use the word ecosystem and that's
02:47just right we we used to be the whole
02:50Seco system and now you're asking the
02:52right question where do we fit in an
02:54ecosystem of technology there's global
02:56and commercial and in this particular
02:58case we because we have the need to not
03:04be vulnerable to jamming we will develop
03:08these MEMS even if they're very
03:10expensive we'll buy them even if they're
03:13very expensive because we need them so
03:15badly for a desperately important
03:18mission protecting the country so we'll
03:21basically by spending money being a
03:23market leader eventually cost will be
03:26driven down and everybody else can enjoy
03:28the benefits that innovation as well
03:29that's one of the ways spin-off works
03:31starts with us and it's not like we're
03:33wasting any money or we don't care about
03:35money we have applications that are
03:36particularly demanding that we pay for
03:38first and then the technology goes out
03:41but I also and I was speaking about this
03:44here in the valley and it's one reason
03:46to be out here we can't rely solely on
03:50the spin-off model and by spin-off by
03:52the way you meant that you guys
03:53developed it and then and then it goes
03:55to the commercial that was the old model
03:57it still works in some cases like the
03:59one I just gave but in most cases in
04:02technology today we the Defense
04:04Department we played the role in the
04:05ecosystem of a devourer of outside
04:09technology in fact I've heard that the
04:10government is the biggest IT buyer in
04:13West it is we have any we're an enormous
04:15market for IT companies and also for IT
04:18security companies because we care so
04:20much about security and so many people
04:22want to attack our networks either
04:24because they think it's fun sport or
04:25because their potential antagonists
04:27so that's important for firms like
04:31andreessen horowitz who are investing in
04:33companies we're gonna be at the
04:35forefront of a lot of their markets and
04:37then the question becomes how do they
04:40market to us I want them to market tell
04:43us actually having so there's a lot of
04:44startups that listen to our podcasts
04:46including startups not in our portfolio
04:47and we'd love to hear your thoughts for
04:49how they can reach pique your interest
04:53well they do pique my interest in that
04:55and and because we want the very best
04:58and we can't develop all that within our
05:00own walls the trick here is that we over
05:04time and I just have to say this the
05:06Department of Defense and the government
05:07in general has become a rather slow and
05:10stodgy buyer and it's there's a
05:13bureaucracy that's too big and so
05:17companies that know how to deal with the
05:20bureaucracy have an advantage over ones
05:22that have the best technology that's
05:25wrong and so we need to lower the walls
05:30to entry for start-up companies and also
05:34give them a path to success they don't
05:36want to end up sold to a big company and
05:39that's one exit for many of them but for
05:41a lot of people who are starting new
05:42companies they don't want to be owned by
05:44anyone controlled by anybody else they
05:46want to be on their own and they want to
05:47grow on their own we need to open that
05:50pathway for them that's why I'm working
05:53on creating an innovation unit out here
05:57that's just what we call it but it's
05:59point is to teach us how to welcome VC
06:04companies to market to us and teach them
06:07how to deal with us and open up that
06:09channel so that where we have as rich a
06:11relationship with the world of
06:13technology as we've had for decades in
06:14fact you actually put an X and the name
06:16of that new unit experimental and that
06:18just simply means that I realize we're
06:20trying things out we're trying new ways
06:23of interacting with the valley and the
06:25people of the valley and so I'm starting
06:28three or four pilot projects so to speak
06:30and we'll see how they do but I don't
06:32want to set up something with the
06:34pretending that I know where it's gonna
06:36I don't but that's actually good because
06:38it means that Wilkie stay smart will
06:41innovative that's what we need to do and
06:43I think we need to match our approach to
06:46the approach of the really bright people
06:48out here they don't want to fit a mold
06:51they want to be themselves but they want
06:53to market to us and they want to share
06:55technology with us I need to make that
06:57possible I need to make us compatible
07:00with the great wonderful innovative
07:02style of this part of the world so one
07:04question just to take a step back back
07:06to the ecosystem when you were talking
07:07about the changing model of the spin-off
07:09that we had before and what we have
07:11today with this new government being the
07:13primary IT buyer what do you see as when
07:17I was at park one of the things we
07:19noticed I noticed was that the
07:21Department of Defense had evolved its
07:23R&D to be more concrete and application
07:26oriented are you still investing in sort
07:28of big ideas as well or how does that
07:31sort of play out or are startups now
07:33driving that innovation like how do you
07:34see that all playing out in the
07:35ecosystem we it's a very good question
07:37and I'm determined and this we're doing
07:39this that even in the time of budget
07:42pressure sequester and all that that we
07:45keep our basic research funding going at
07:49a very brisk rate that that is things
07:52that are a real reach that the
07:54commercial world won't invest in because
07:56it's too risky or it's too long-term but
07:58we might because it's essential to
08:00national security so we're gonna do that
08:02the next trick becomes linking that
08:05basic research to the marketplace
08:08linking it to products because you can
08:10have great research going on in a ghetto
08:12yes that never links up with anything
08:15else and that's a tendency that all
08:17companies have to overcome but we have
08:19to overcome DoD also do you have any
08:21thoughts on how to overcome that silo
08:23effect yeah yeah what you have to do is
08:25make sure that the innovators are linked
08:29to the users and developers and the only
08:32way to do that is what I call some
08:34animal proximity I don't know it has to
08:37be they have to have know each other
08:39be together enough that's why I want us
08:42to have a unit out here a place that can
08:46connect innovators to those who might
08:49use the innovations because if those are
08:50those two parts of the ecosystem are set
08:53rated that's a real problem and a
08:55companies struggle with that but we
08:57struggle with that big-time Labs get
09:00self involved there they're interested
09:02in their own projects and they forget
09:04what it's all about it's to serve
09:06ultimately the customer and in our case
09:08the national defense well so just to
09:10wrap up since we don't have that much
09:11more time let's talk about security and
09:12especially because you were talking
09:14about wanting to partner more with
09:15startups on that this is clearly top of
09:17mind I feel like I'm stating the obvious
09:18to you and everyone in our audience that
09:20there's so much happening in the news
09:22with hacks and more especially this past
09:25week with RSA wrapping up do you have
09:27any thoughts um where there needs to be
09:28more innovation here where you would
09:30like to see more innovation I definitely
09:32do name a few really critical areas
09:35first industry is not and I'm not sure I
09:40understand why but for 10 years or so as
09:43the cyber threat has been growing
09:44industry around the world has not been
09:46investing adequately at its protection
09:49they're beginning to do that now
09:51and so people at the CEO level
09:54understand they have this responsibility
09:55you're beginning to invest in it but
09:57they're late to need in most cases what
10:00do you mean late well they have they
10:01have networks and IT systems and IT
10:04people for that matter who don't have
10:07adequate security background so that's
10:09the first thing is that that we're
10:12coming late to this compared to the
10:14enemy the enemy is hackers to foreigners
10:17and there are lots of spies economic
10:20spies there are lots of theming both
10:22government and economic espionage yes
10:24folks exactly exactly so what role do we
10:27play we play two roles in the Defense
10:30Department one is we are going to be one
10:33of the innovators of new techniques and
10:36we'll do them even if they're expensive
10:39because we have to have to have to
10:41protect our networks and so just as in
10:44other technologies where we have been
10:48willing to pay more for innovation and
10:51to do the innovation ourselves before
10:53the commercial world I think we will be
10:56able to lead technology development that
10:59will then spin-off to the commercial
11:01sector so that's one role we'll play
11:02both for ourselves good for us good for
11:05the commercial we're
11:06a second role we have I mean we are
11:09defense of the country and at some point
11:11the hacking rises to the level of a
11:16really unacceptable attack on an
11:20American firm an American company and we
11:23are the Department of Defense which
11:24means we're supposed to defend the
11:26people against all kinds of threats and
11:28we are also working on which combination
11:32of defense intervention and even counter
11:37attack like offensive exactly okay in
11:40order to tell people that if they attack
11:43Americans in cyberspace at a certain
11:47level we're gonna regard that as an
11:48attack it's not hacking it's not fun
11:51it's not it's not the Internet is is
11:56free and open but not free and open to
11:59people who are attacking others and
12:01causing harm causing economic damage and
12:04so forth so those are our two principal
12:06roles so ash in terms of security
12:08domains like what topics are most top of
12:10mind for you is it encryption backdoors
12:12like is there anything that in
12:14particular that you'd love to see more
12:16innovation yes a couple areas the first
12:21is threat sharing information you know
12:25information about who's who's getting me
12:27and what tools are they using that
12:29shared among companies and shared
12:32between the government and companies
12:33sounds like a very simple thing where I
12:36say hey look I'm being attacked in a
12:38certain way and I make that known now
12:41the problem with that is many companies
12:44don't want to indicate to their
12:46customers that they're under attack so
12:48this has to be done sort of quietly but
12:50the whole is greater than the sum of the
12:52parts if we all explain to one another
12:54and what kind of attacks were
12:55experiencing and of course this has to
12:57be done at network speed right it has to
12:59be like super fast so you're really
13:00talking about something where the
13:01current model is that companies may
13:03announce it or may not and if they know
13:05they keep it between themselves and
13:06perhaps there could their security
13:08comedy exactly and so you're describing
13:10sort of a meta network where the company
13:13or the security company say hey I'm not
13:14going to name who did who's what
13:16like what the victim was there a client
13:18of mine I thought you all should know
13:20that this is what's going on in
13:22somebody's network over here watch out
13:23for it and we can do the same thing with
13:26government and again if it rises to a
13:28certain level then law enforcement or
13:30Homeland Security or even the Department
13:33of Defense might intervene second area
13:36is what I'll call interactive defense
13:38you can't be passive anymore in in
13:41network defense you can't just put
13:42firewalls around it doesn't work you
13:45have to patrol the walls and look for
13:48people who are drilling holes and people
13:50who are climbing over the Interactive's
13:54right now if you mean when you say
13:55interactive you mean adding a more
13:56proactive component we just don't try to
13:58create this like perimeter that you're
14:00exactly actively monitoring to monitor
14:02what's going on outside and also what's
14:04going on inside because remember the
14:07insider threat really is the one that
14:09security specialists fear at the most
14:12it's an employee who's careless a
14:15seeming like intrusion detection yes and
14:17somebody who is exfiltrating data
14:19company data why are they doing that
14:21that's not their job boy that's a lot of
14:23information for somebody to be extra
14:24they must be up to something that kind
14:26of monitoring if you if we'd had it and
14:30just to put shame on ourselves NSA which
14:34is part of the Department of Defense
14:35that's what Edward Snowden did and he
14:37wasn't caught in the act over a period
14:40of months doing something that had no
14:42reasonable association with his job at
14:45all and the complexity and the scale of
14:47information systems make that kind of
14:50threat possible and of course everybody
14:52knows about Snowden but there are a lot
14:54of insider events that have occurred in
14:57industry as well people don't like to
14:59talk about them because they don't like
15:00to expose themselves exactly well thank
15:02you again ash and thanks for being a
15:04seasoned see podcast great to be
