tv Atlantic Council Discussion on Defense Industrial Policy CSPAN November 30, 2018 2:31am-4:00am EST
on our live call-in program at noon eastern. his most recent book, the escape artist, debuted at number one on the new york times bestseller list. his other books include the ,nner circle, the book of faith and the first council, plus eight other best-selling thrillers. join us for in-depth fiction addition with brad meltzer from noon to 3:00 p.m. eastern on book tv. on c-span2. white house officials and congressional staff discussed the trump administration's defense industrial policy and cooperation between the federal government and military contractors at an event hosted by the atlantic council. this is an hour and a half.
mr. grundman: good morning. welcome to the atlantic council. i am steve grundman, a senior fellow here at the council's center for strategy and security. i am the producer of this defense industrial policy series. thank you all for coming, thanks very much, both those of you here in the room, and those of you who may be watching on the livestream. the purpose of this morning's event is to engage a discussion about implementing defense industrial policy. to that end, we are going to hear first from the deputy
assistant secretary of defense, eric chewning, who will make some prepared remarks, teeing up the discussion. following his presentation, eric will be joined on the stage by three other distinguished voices on this topic. caralynn nowinski collens, the chief executive officer of ui labs. ui labs is based in chicago. those of you who are following the nation's weather might know that they got a snowstorm last night, and so caralynn was not able to be here in person. however, by the magic of telecommunications, she's going to appear on that screen and participate, nonetheless. arun seraphin, a professional staff member of the senate arms services committee is another of the panelists, and jeff wilcox. the vice president for digital transformation at lockheed martin will comprise the panel which will mount the stage and engage us in a discussion after eric's prepared remarks. the release in early october of the administration's report to the president of the defense industrial base, it looks like this. it's entitled "assessing and
strengthening manufacture of defense industrial base and supply chain resiliency of the united states," focuses attention on a number of its shortcomings, the shortcoming of the defense industrial base, and vulnerabilities which could adversely affect military preparedness and performance. there remain imperatives to shoring up fragile nodes in the supply chain and incentivizing the development of capabilities which the national defense strategy identifies as differentiating to future military capabilities. however, neither the report to the president nor the national defense strategy itself addresses in much great detail exactly how the pentagon and the rest of the government are going to respond to these imperatives. it is the purpose of this event to drill into what i might call the nuts and bolts of defense policies. and we have the perfect panel by which to do that. before we move to that, i have just a couple administrative notes.
one, i have indicated the agenda. eric will make remarks, we will have a panel discussion that i will lead and then take questions from the audience at or about 11:30. we will have 25 or 30 minutes within the agenda for questions from those of you within the audience. the event is on the record, needless to say. you can see some cameras in the back, and i have already indicated we are live streaming. the consequence for the rest of you in the audience is that if i call upon you to offer a question during the q&a, please wait for one of our staff to bring you a microphone and then clearly identify yourself and your affiliation before asking the question. finally, note that we must conclude at noon, so i would ask all of you to join in helping me pace your questions as that hour approaches so that we can end on time. today's event is the 14th in the atlantic council defense industrial policy series. the series is an initiative to make a preeminent platform available to public officials and others who can address government stewardship of
defense industrial resources. previous speakers in the series include the acquisition executives of the army, navy, air force, and the special operations command, also the sector of -- secretary of the air force, now former secretary of the air force and secretary of the army had been speakers in this series. it shall suffice to say this series is a further expression of what general brent scowcroft had in mind for us. which is to be an institution which creatively cultivates a transatlantic constituency for strategic thinking about and practical solutions for the problems of international security throughout the globe. today's discussion, i claim, about implementing the defense industrial policy leads directly to that mission, and i want to thank again the entire panel for adding their names to the series' distinguished posture of alumni. thank you.
now, let's welcome eric chewning. eric is the deputy assistant secretary of defense for industrial policy in which capacity he served as the principal author of the report to the president of the interagency task force responding to executive order 13806. as i have said, or implied, that report is the impetus for today's discussion and eric will address parts of it in his prepared remarks. more generally, eric is the principal adviser to the under secretary for acquisitions llen lordnt alan -- e about the capabilities, health and policies concerning industrial resources on which the dod relies. prior to taking this position in 2017, eric was a partner with with the consultant mckinsey and company. he is also a former u.s. army officer and served in operation iraqi freedom with the first battalion fifth cavalry regiment. thank you very much for coming. we look forward to hearing your remarks. [applause] mr. chewning: steve, thank you and thank the atlantic council
for convening today's session of providing me with the opportunity to set the stage for a panel discussion. arun.eff, caroline, and i would like to say i've had the pleasure of working with all of them on industrial based issues and look for to hearing their perspectives as well. over the next 10 minutes or so i'd like to do three things. one, define and characterize defense and national policy. the concept, not the organization, because the concept transcends any single office or authority. two, i'm going to talk about five different levers that we use to implement defense industrial policy. three, i will talk about how we're going to apply those levers to context of the risk identified in the 13806 before. -- report. understand defense and social policy is important to start with the national defense strategy. as many of you are aware, the nds with its focus on great power competition clearly laid out three priority areas, increasing the validity of the -- the legality -- the leth
ality of the joint force, strengthening alliances and building new partnerships, and reforming how the dod does business. defense industrial policy plays a critical role in all three. because defense industrial policy is a strategic effort to generate and convert economic power to fulfill military war fighting requirements now and in the future. it is how we generate and allocate resources to modernize the force. it is the means for strengthening our industrial base and industrial base cooperation with our allies and partners, and it's a process that can be made more efficient through reform. now, our war fighters have a broad set of requirements. the dod buys everything from cell phones to nuclear weapons, healthcare services to spacecraft. the nds in particular highlighted key capabilities for force modernization as we retool the industrial base for great power competition. capabilities like hypersonic
advanced autonomous systems, nuclear forces, space, and cyberspace. as noted in the nds, our ability to modernize this force requires changes to culture, investment sources, and protection of our national security innovation base. some technologies will continue to drive the state of the art through government funded r&d, but in others we will need to ilorers ofe fast ta fast followers of commercial sector advancements. in order to fulfill war fighter requirements, the department interacts with a range of industries with different market structures. for example, our power as a customer in microelectronics is different than our role in nuclear shipbuilding. the potential new entrants in artificial intelligence is different than that from manned fighter aircraft. what's more, the nature of our participation in these markets is unique because we are both a customer as well as an oversight authority. this position creates a range of levers for dod to use to cultivate supply.
some of the levers are the same strategic sourcing tools used by large procurement organizations , while others reflect the distinct nature of our national security mission. i will briefly touch on what i consider to be five of the most important. the first is the acquisition policy lever. the rules of the game for how and what we buy. this includes how we set requirements, the acquisition process, and the supporting regulations and qualification standards. currently the department is implementing the largest body of acquisition reforms since the goldwater-nichols act. recognition that the legacy way of doing things needs to evolve to our current operating environment. to better support the war fighter, the rules of the game need to enable faster filling of capability, more cost efficiency, and expansion of the industrial base to a broader set of technology providers. the second lever are the procurement decisions. the choices we make about what system to buy, who to buy from,
and when to procure it. these decisions send the demand signaled industry so they can go invest but also signals the government's collective choice about where we are putting our money, often for decades. ultimately these funding levels determine the market opportunity available for industry and in a particular capability area. the industry will size itself accordingly. the third lever are direct investments. money and human capital we inject directly into the roots of the industrial base to stimulate growth or correct a market failure. examples include defense production act title i and title iii authorities, manufacture -- manufacturing technologies program, manufacturing usa institutes, database analysis sustainment program, small business technology transfer program, small business innovation research program, as well as the work dod funds to research and universities as well as our national labs and
organic and industrial bases. the key element of many of these programs is a public-private partnership they enable. the fourth lever is our ability to review business combinations that shape and affect national security. the central authorities at play two here are the antitrust act that we work with ftc and the department of justice, as well as the committee on foreign investment in the united states chaired by our colleagues at treasury. finally, our fifth lever, international trade, department cooperation, and control. the government to government agreements ensure supply of material, cooperation military capability development, prohibition of companies from the national security supply chain, and controlled -- control of technologies with military applications. and so when we think about these five levers in the context of the 13806 report, 13806 report started with a discussion around
what we consider the five macro drivers creating risk within our industrial base. arounder and uncertainty government spending, it decline of u.s. manufacturing capabilities and capacity, the adverse impact of u.s. government business practices and procurement, industrial policies of competitor states, most notably china, and diminishing u.s. trade skills. we then transitioned to a discussion of how these macro forces work together to create industrial-based risk. that risk was characterized by 10 different archetypes. it's in the of the archetypes where it's important to talk about the levers and this application of levers become clear. for example, to the archetypes we discussed in the report were single or sole-source providers. there are some instances where it may make sense for the department to have a single source provider based on the amount of money we're spending or the areas to entry for particular capability. but in instances where that
doesn't make sense, we need as -- we need to ask the first order question. why is only one company able to qualify for for a particular capability to the department? could we pull a lever? for example, acquisition policy. is there a specific defense-unique requirement that is preventing other supplies of -- suppliers from entering the market? could we harmonize this was something that is more commercial to lower the barriers to entry and expand the potential folks who could provide the capability? or the procurement decision lever. can we choose to use a different supplier then the one we have traditionally used? recognizing that while that may create risk for a given program, it will buy down risk across programs. or is this market appropriately sized given our projected levels of procurement? would we need to potentially increase what we're spending any particular capability area to entice more entrants? direct investments? can we use defense production
act title iii authorities to augment a business case to bring in and qualify a second supplier? review of business combination. was there a consolidation event that reduced competition? would there be potential consolidation events to further reduce competition? and finally for international trade cooperation control perspective, are allies qualified to buy the capable as -- capability? is there an opportunity for a supply agreement to buy down concerns we may have access to that capability? one can apply an approach like this across risk archetypes and and it is the reason why we use risk archetypes in the report. quite simply, while we identified 300 discrete risks, there are others we didn't find, and these known unknowns are likely going to fall into one of these risk archetypes. so my thinking about the application of the levers in the context of the risk archetypes we create the pattern recognition and the institutional muscle memory necessary for dealing with the problems as they arise.
i think it is an important note about the report, it is just a snapshot in time. anyone who has managed a supply chain nose supply chain risks are constantly evolving. it is going to be updating and reviewed as we move along. risk will come, risk will go. the important thing is we're building the institutional capability to address changes as -- address opportunities as they evolve. as i mentioned earlier, these defense industrial policy levers run across the department of defense as well as the interagency. as a result, the value that a defense industrial policy office can create for the department in general and specifically for my boss, the undersecretary for acquisition and sustainment, is insight into the longitudinal view across levers. a perspective that says are we pulling them as an enterprise in a way to most effectively adress the risks that have been identified yet the if we're not uniformly pulling the levers, why? and can we do it better to
address concerns we have in our ability to meet current and future war fighter needs? with that, steve, i pass it back to you. steve: thanks very much. all right. [applause] right there, eric. and hopefully we'll have caralynn join us, there the is . hi, caralynn. that's great. i think that did exactly what i had hoped for our purposes which is tee up the discussion, give those of you who have not yet delved into the 13806 report -- [laughter] it's good. i like my copy the way it is. a preview. the archetypes is a key thread to be aware of and to help us
understand what the administration's industrial policy is. perfect setup. the rest of our panel if you didn't figure it out, represent different perspectives on the same problem. a perspective of industry a perspective from the hill a perspective from let's call it the independent sector that's collaborating both with private and public entities in order to address some of these problems. so let me give, as i have offered that they do, each of the other panelists a few minutes to introduce themselves and their core perspective on the topic before we begin the discussion. i've asked jeff to start there. jeff wilcox who is, let me give a little introduction, he's vice president for digital transformation at lockheed martin in that capacity he's responsible for leveraging emerging digital technologies to transform systems design,
production and sustainment operations of the company. apropos of this conversation, he is also chairman of the manufacturing partnership of the national institute of standards and technology and serves on the advanced robotics for manufacturing board. jeff: if i could, first, thanks to the atlantic council for convening this important conversation. if i can start with historical overview, it's worth noting that this is a new conversation in many ways. it goes back a couple hundred years to alexander hamilton who recognized early on the importance of the defense industrial base, didn't use those words, but as the person who was in charge of acquisitions to washington's army it was a big deal to him and as secretary of treasury when he reported to congress with his third report on manufacturing, he focused on the role of that defense industrial base for our security. but he also talked about his role in terms of prosperity. i think that is important to
keep in mind. we often talk about the defense industrial base, national security, but if you look at history, the aerospace and defense community, the defense and industrial base, has done a tremendous amount to advance our prosperity as well. you just have to look at things like the internet, darpa, global positioning satellites, the apollo program drove the early chip industry. this industry does what's at the edge of the possible, the edge of what's really hard. because of that, we introduce building blocks into the innovation ecosystem that can be leveraged for u.s. prosperity. in a few hours, nasa is going to land the insight lander on mars. lockheed martin built the technology it takes to do that are incredibly challenging and that ends up driving a lot of technology investment broadly in the u.s. industrial complex. something to keep in mind as context. this is a big deal to lockheed
martin because we are a system integrator, fundamentally, more than a manufacturer. the health of the supply chain an existential issue for us. we spend a lot of time stewarding it, addressing it, and working with the government and with academia to make sure that it remains robust. i would say that that's getting particularly challenging these days as we go into this fourth industrial revolution, industry 4.0 you might have heard it referred to, the convergence of digital technology, augmented reality, virtual reality, artificial intelligence, new materials and so forth, all of which leverages data as fundamentally a new commodity in many ways in the scale and processing power to deal with that. for companies like lockheed martin that has the scale and resources to move into industry 4.0, it's an exciting time and it's a great challenge. and opportunity. but for the supply base, a lot
of small and medium-sized enterprises at the root they're referred to in the defense industrial base which is where this innovation comes from, the o.e.m.'s like lockheed martin rely on that extended supply base to bring the best to bear in service to our customers. they have all they can do to meet payroll in many cases, you know, to find workers that can show up to start a second or third shift. they have a lot of challenges on their hand. entering the fourth industrial revolution is not what they wake up every morning thinking about , and yet, if they don't, there is a risk of getting left behind and the base everybody has been addressing for the past couple of hundred years becomes at risk. we welcome this report and the study and the effort to address the risks to that base. i would add as kind of an introduction to caralynn, there's a number of mechanisms that we use to steward, foster, nurture that industrial base, one steve mentioned is the
manufacturing extension partnership. a public-private partnership. the other is the manufacturing u.s.a. institutes. lockheed martin was an early advocate in support of the initiatives. we are members of eight of them and on the board of the advanced robotics manufacturing. that's a place where we can all come together, government, academia, industry, and shape a road map that will lead us all together into that fourth industrial revolution. i think with that overview, i'll pass it on. steve: ok, jeff, thank you very much. there's several things you mention that we can come back and develop in our discussion. i am indeed now going to turn to caralynn, dr. caralynn nowinski collens, c.e.o. of u.i. labs, the goal of which is oto transform industries using digital technologies. caralynn will surely explain what u.i. labs is all about but
for my introduction i'll note that u.i. leads the consortium that was awarded the dod contract to operate digital manufacturing design and manufacturing industry, dmdi institute as we'll call it here. it's one of the manufacturing innovation institutes of the d.o.d.'s manufacturing technology program. prior to her appointment at u.i. labs, she was vice president for innovation and economic development at the university of illinois. it's also worth noting that she sent spent the early part of her career in venture capital and corporate finance. thank you very much. i'm sorry you were not able to make it here. due to the weather. but you are here, rest assured. please give us your introductory remarks. caralynn: thanks so much, steven. thanks for being so accommodating and allowing me to join you guys despite the weather. this is what digital technology is all about. jeff, appreciate you teeing that up.
lockheed martin is one of our founding partners as well. it really does embody the true public-private partnership. at u.i. labs our vision is to forge the future but digital -- the future of industry through digital technology and collaboration. dmdi is the way to focus on the future of american manufacturing. let me back up for a moment. dmdii is part of the larger effort in two ways. one, it's part of a network of manufacturing institutes, part of this manufacturing u.s.a. network of 14 institutes across the u.s. that are all focused on one particular advanced manufacturing capability. the recognition of many groups, public and private, who recognized several years ago that our manufacturing capabilities were eroding and if we wanted to maintain national security, if we wanted to increase the manufacturing capabilities of the u.s., we
needed to make sure that we were both developing these advancing -- advanced manufacturing technologies and also figuring out how to reduce those to practice from a technology standpoint and work force standpoint. we're part of this broader manufacturing u.s.a. network and we're also one of eight institutes that are part of the d.o.d. manufacturing institute. and these institutes are within the office of manufacturing technology within the d.o.d. so the office broadly has the obligation or requirement to maintain u.s. manufacturing capabilities needed for u.s. war fighter readiness, for military preparedness. how do we make sure our manufacturing base has those capabilities to make sure we are the most competitive, that we are the most capable? as part of that mandate, these institutes take on different
types of manufacturing capabilities. for us at dmdii we focus on digital manufacturing. as jeff alluded to, this fits nicely into the fourth industrial revolution. the industry movement that's bringing the digital and physical worlds together. within digital manufacturing what we want to do is connect a -- every part of the product lifecycle. we want to use data to create what's called the digital thread, the thread of data from the earliest stages of design through factory operations through making and assembling, through the supply chain and end of life. there's an incredible amount of alonghat is collected this thread that allows us to make better insights, to better understand what is happening within our factories, what is happening within our supply chains, and ultimately raise the readiness, raise the capabilities of our industrial base. it's through partnerships with
the department of defense and through our leading manufacturing partners like lockheed martin who are basically working hand in hand where we understand what is the need for the war fighter what is the need from the manufacturing industrial base, what is the need for the commercial manufacturing base? so we can tie all these groups together, create an ecosystem that develops these technologies and advances them, also transitions these technologies and ultimately also creates a capable work force and if by bringing together in our case more than 300 different organizations alongside the department of defense, including universities and startups and large businesses, technology companies, manufacturing companies, that we can ultimately do what our job is, to accelerate the development, adoption of these digital manufacturing technologies. without this lever of being able
lever of being able to make those without this lever of being able to make those investments public and private side-by-side we fear we won't have that readiness of the manufacturing industrial base that's necessary in this fourth industrial revolution. so with that, steve, i turn it back to you. i turn it back to you. steve: that's great. although i'm going to impose on you one further question, only because i think the answer will surprise. what does the u.i. in u.i. labs stand for? >> university industries. so the early recognition that by connecting the great innovations that are happening at our research universities here in the u.s., real competitive advantage for the u.s. to industries' needs then we can hopefully transition those technologies more efficiently and ultimately more cost effectively as well. >> is there a tie to the university of illinois? >> it's definitely a nod to the
university of illinois, university of illinois was one of our founding universities but today we have partnerships at over 45 universities and technical colleges. so it really is that broad set of partners that are necessary for us to be able to do our job and we dent believe any one organization can solve this problem and that it really is about bringing together the collective that allows us to accelerate the development and adoption that is necessary. >> ok, thanks. thanks very much. finally, hardly least, let me arun serapin, he has a big job, acquisition policy, management at the pentagon, science and technology program, information technology systems, defense labs, the afore mentioned small business innovate i research program and
test and evaluation programs. he also previously served in the white house office of science and technology policy as its principal assistant director for international security and international affairs. give us the perspective, at least of your experience, if not the whole of capitol hill, your experience on capitol hill. >> thank you, steve, thanks to the atlantic council for having me here today. with your prodding i'll do my standard disclaimer. nothing i'm saying here retchts the views of all the people i worked for in the past, work for now or will work for in the future. some of the things i say don't reflect what i think. i'm just trying out ideas on a crowd here, we'll see how it goes. steve: excellent. arun: the topic is very important on capitol hill, of course. it's because i think i it ties together two of our biggest
drivers, jobs and national security. there's no better issues that focus members' minds more than jobs and national security unless they got in the business of working on health care outcomes also. therefore you see a lot of activity on the hill because of that. the other thing about the sets of issues is that they're very local. every member experiences dealing with the industrial base, dealing with manufacturing issues, dealing with the manufacturing work force every time they go home. they hear about these issues from a wide variety of constituents ranging from state and local government officials who are looking for federal investment, who are looking for federal partnerships, who are looking to strengthen their employment bases, companies for the same reasons, to the actual work force and labor itself.
and then of course there's the overlay of the department of defense and important constituents reich the depots and ship yards and arsenals which members all want to protect. therefore you see the members very interested and active in this set of -- in this set of issues. what we are sometimes struggling with is the line between industrial policy which isn't something that we nureblly engage in actively on the hill, and national security policy which is something we always engage in on the hill. and so when those two things overlap and it gets to be very interesting set of policy discussions and debates. but looking back over the years, even in my time on the hill, we've been on the cent senate ampled services committee, in the national defense authorization act very active in
these areas particularly through support of some of the programs other panelists have mentioned, the manufacturing technology program, managed out of the pentagon and military service, edefense production act and the investments being made in the industrial base through the defense production act, the national network of manufacturing institutes including those managed by the department of defense, the manufacturing sanction programs, so the active support and funding of those areas, active support of policies the authorization of the programs themselves reflects the interest of the hill in the past and i think going forward. we have over the years written a lot of legislation in various -- targeting various specific issues in manufacturing. so for example, it was an ndaa that originally mandated the creation of a manufacturing industrial base policy office within the pentagon. and that was to try to strengthen the role of the voice
of industrial policy within decisions made in the broader acquisition programs of the department of defense. we've tried to strengthen the manned tech program by creating joint defense manufacturing technology program and a panel to coordinate those efforts to try to connect those programs to the manufacturing extension programs of the department of commerce and to push for manufacturing strategies that can help guide congressional nvestment in manufacturing and targeting sectors. we've also focus thobed work force portion of the manufacturing and industrial base base program. most recently through an initiative called the manufacturing education engineering program which tries to connect university education programs to the needs of the future defense industrial base. and then in thinking about the
organic industrial base which is the depots and ship yards and the arsenals, which are represent -- which represent the manufacturing strength within the department of defense, we've tried to strengthen the pentagon's ability in the mill -- and the military service's ability to hire the talent they need by promoting faster hiring authorities within the government to make them more competitive employer with the private sector. another whole area of effort over the years has been in acquisition reform. this has been a perpetual effort then hill and in the last few year, like eric mentioned, there's been a -- there's been hundreds of provisions written to try to reflect the changing nature of both the global industrial base and the increasing speed by which technology is changing to try to move the pentagon procurement processes in a way that reflects that environment and that speed. we tried to create faster
contracting methods to connect the pentagon with small businesses, to universities, and to nontraditional defense contractors, companies who don't usually work with the pentagon. but are working in very important technical areas, things like cyber security and robotics and artificial intelligence. we tried to increase the flexibility of the existing procurement tool within the pentagon. the federal acquisition regulation is not noted as being the most adept and agile way of buying things for the pentagon but turns out there's a view on the hill and the pentagon that that's a tailorable tool and processes and we tried to write legislation and point out some of the flexibility that exists within the federal acquisition regulation that pentagon officials, contracting officials can use to try to get to the right company, to try to get the right product delivered as a -- delivered at a fair price in a timely fashion.
we you saw over the last few years a set of legislation that tried to push at those kinds of authorities and that kind of behavior. and then in terms of work force, the real focus over the last few years has been hiring in the stem world. so you see the hill over the past few years has given enhanced authority to places like darpa, the defense laboratories, i mentioned the depots and ship yards and cyber security, to try to make the government a more attractive employer to that highly sought after technical work force. so then looking forward, the kinds of things i think we're thinking about are probably summarized as more of the same. we're of course going to continue to tweak tweak acquisition processes an actices as we see problems arising for previous legislation that needs to be adjusted to
reflect new needs of the pentagon. i think a major emphasis will be trying to help the pentagon actually implement all those different provisions that have been written over the years and that is some function of training the work force and just standard process of congressional oversight over the use of some of these new flexible acquisition tools. in terms of looking at the manufacturing and technical work force, i think in addition to the hiring authorities that have been given out over the years, i think we're going to try to think about things like making use of the vast numbers of talented foreign nationals who come to this country to study engineering and science and manufacturing, which gives us an advantage over some of our global competitors. those same people aren't always going to every country. but we in working with the defense department haven't really figured out how to make
use of all that foreign national talent and put it to effect to improve national security innovation. in the struggle for talent, i think one of the things we're concerned about is that the government is at a standard and fundamental and maybe structural compensation disadvantage when thinking about hiring specialized talent in fields like artificial intelligence or robotics or advanced manufacturing with respect to the private sector. thinking about the compensation packages which would entice people to come and work in the public sector and the kinds of careers people want in the public sector to work in these important fields. we are probably past the age where people want 30-year careers in government anymore so can we think about different employment strategies to hire people for shorter periods of time, make use of their talents and push forward technology
while at the same time making the government and particularly the department of defense a more smarter buyer, smarter regulator of these kinds of industries. then in the work force, i think the other thing we're struggling with is in offices like eric , he may need a few really smart artificial intelligence people but i would assert what people like eric need in office and offices that think about the industrial base need is real management, financial, almost wall street expertise. and so how is it that we can get that kind of business expertise into the pentagon to think about these complex industrial relationships? to think about how the public sector should be interacting with globalized technological manufacturing base? in the same way that we for decades have had a strong relationship with the university community, bringing talent and seens and engineering in to
support our darpas and national science foundations and more recently we planted outposts in places like silicon valley to tap into an innovative community that the pentagon hasn't had a relationship with, should we be thinking about the same thing with places like wall street? with places like the banking community? to reach out to get a petr understanding of their drivers and hopefully to attract some of that talent to come back and work with the pentagon on these challenging issues. in particular for example can we get data analytics experts like carolyn was talking about to come and help us think not just about tactical data on the battlefield but data as it reflects the manufacturing problems, data as it reflect -- reflects procurement policy. the last thing i'll mention before i get off the stage, is money. we think about money on capitol hill of course. from a policy perspective, the
hill is comfortable in thinking abspending money on fundamental science to promote all the technologies driving both economic scommurt, national security, health care outcomes. investments in universities and investments in basic research that lead to things like internet and g.p.s., we're good with that. we're also good with procuring the things the defense department needs to equip the military to fight the next battle to ensure our national security. sort of everything in between we're struggling with. we dent have a good sense of how to fund what's called valley of death programs. to mature things to the point of commercialization or production. we don't have a good sense of where government procurement dollars can be used as a tool to spur and stimulate and preserve innovation in this country. in the same way we're very comfortable using r&d dollars to stimulate innovation, shouldn't
with bethinking about procurement to create marks to create domestic suppliers of artificial intelligence capabilities rorkbotics capabilities going forward? i think one of the things we're going to be thinking about, struggling with, is how to invest, how to budget for that kind of gray area where we traditionally have called that sfrill policy and kind of ceded the duty over though private sector, maybe the world has changed and the government needs to think about more of that from the inside. so with that, i'll stop, i'm happy to take questions. steve: that's great. your remarks reflect the activism, i think we could call it, on capitol hill over not just the recent year but a few years in industrial policy which you're indicating while not speaking for anyone is likely to continue. here's my first question, which i'll direct at eric but any of the other three panelists may weigh in as they'd like.
i wanted to remark upon the renaming of your office as the industrial policy -- as industrial policy. when i had this job, almost 20 years ago, the name of the office was industrial affairs. and that ostensibly subtle difference actually marks a really fundamental cultural divide, i would almost observe. and i wanted to draw you out eric on where we are in a culture which actually to pick up on a point that arun made where industrial policy traffics in a culture that mostly gravitates toward laissez-faire. the reason why office was called industrial affairs is because if you can imagine against the 1994 congress, no democrat was going to try to pass off an industrial policy. that's not what we do, culturally. and by the same token, national
security policy is very much sort of -- has acceptable, i'll call them command economy instincts. so these two things are sort of intentioned with one another and i'm wondering does the denomination now forthrightly of our office as industrial policy, does that mark a turn of the culture, at least in this administration? >> yeah, i think building on arun's point and your comment, steve, i think it does. so here's how i see it. industrial policy, it's a bit of a false dichotomy to say there's either this po lit pew row, top-down driven approach or there's a free market new york state intervention at all when it comes to department of defense. eric: the comments, we oversee a range of different markets. we're a consumering we're a regulator, there are all different levels of state intervention and management of those things across the board. i think the point we're trying
to make with perhaps the sut real naming is the need to be more thoughtful around our role as both a customer in some of these markets where we are very determinative because we're potentially the only customer or one of a handful of small ones, differentiating how we might act there versus ones where we're a dirivetive buyer. i think too, to build off arun's point also, there's a need for subject matter expertise at the intersection between economics and national security. right? i think we've allowed to a certain degree the development -- with an economic perspective everything is about positive outcomes from a national security perspective, zero-sum outcomes. you need to talk and bridge across both because you need to be able to talk both in terms of positive economic relationships and what implications that may have from zero sum national security.
steve: let me actually insist arun you give us a sense of the temperature for industrial policy up on capitol hill and then i will ask jeff and carolyn if you can account or testify if you will to any resistance to industrial policy or if we can just put that behind us which i'd like to think we could. arun: even if you take away the term industrial policy and call it better supplier management. that's effectly what it is. steve: or industrial affairs. industrial e's an -- storse eric: if we were to say, who is your strategic sourcing executive it's a different person than the one running category management because you need to cultivate these. what's the: -- arun,
temperature of this topic? arun: i think resistance to the government picking winners and losers is still on the hill. having said that, if you invoke the phrase national security and the idea to do intelligent supply chain management, protection of new technologies to initiate national security in the future, preserve the need for the surge protux of -- production of whatever we're going to be into in the future then members get more interested. and industrial policy has always n the third person, i think, industrial policy tends to be more support i. there's an appetite, it's just how you talk about it and what kind of intervention are you actually specifically promoting. >> carolyn is there -- offer your comments on this, particularly if you have experience having to overcome
obstacles to what might be regarded as one of the express -- main expressions of defense industrial plcy. carolyn: i think what we're hearing from our partners specifically our industry partners is that we need to have a -- an industrial policy that in fact we, the u.s. are going to fall behind not just from a national security standpoint but an economic security standpoint. if we don't do something. in the here we see it subset we work with is what other choices we have, what other alternatives? and the he re-ality is, folk dealing with global national economy have a choice where to go to do business and where to go to innovate. if we give our industry base a choice and that choice is easier for them to go get investment from china or from germany or singapore, name a country, rather than the choice to make that investment here in the u.s.
where they can develop new innovations, it's very important they transition those innovations. just like arun was talking about that, valley of death we dent have a policy that bridges that valley of death. and says it's not just about developing new technology but how do you reduce those and get them into workers that are capable of using the technologies? there's a real pull right no from organizations we work with to have this strategy, to have this policy in place that really allows us to really explain manufacturing still matters here in the u.s. and we are going to build a competitive, capable work force and industrial base ere. steve: jeff, i think it must be said, or i'll say it, industry is sometimes resistance to industrial policy particularly big incumbents who see policy as creating competition.
again i'd like to think i overplay this but what's the perspective more generally in industry? on industrial policy? jeff: i think policy versus outreach versus affairs is a bit of a red herring. engagement is always good. we want to be at the table with the government. we want to know what they're thinking. we want to help shape where we're going together. and so i don't sense this reace -- resistance to the word policy in industrial policy. i sort of put it into two camps. one is engagement in arctic pating -- articulating advanced needs that commercial will never event. hyperer sonic comes to mind. i don't believe there are commercial hyper sonic program, i'm pretty sure there aren't. that's important that the government says we want to do these things, nobody in the commercial world is addressing those, let's fund them, let's address them and i think that's really important. the other one is the being at
the table conversation. one of the great things about the manufacturing u.s.a. institute is you're at the table with the government. there are very few places where we go where we're at the table with the government and with academia and industry. for reasons never quite clear to me there aren't a lot of forums where that happens. but it's so important. that dialogue is really what shapes public needs so we understand public needs, and so they understand our capabilities as well as our challenges, especially in the supply chain and our ability to hire. i guess i don't hear the angst personally anywhere that i go. i think in general, me more -- the more we talk the better, the more we engage the better, the more we shape the future together the better. >> i agree it's a red herring but i wanted to put the elephant in the room from the go in case -- lest we avoid talking about it. ow let's move on to -- i'm sorry, eric.
>> strategic supply chain manager. steve: let me turn now to a different question and that is where you may see or anticipate in our dealing a tension between industry 4.0 which is sort of the 20th century industrial resource we need if you will among them or the vision of 20th century industrial capabilities and industry, you know, 1999. my own experience again managing industrial policy is that particularly with respect to constituent interests and interests on the hill, industrial policy tends to be as much about protecting and retaining and cultivating yesterday's capabilities as it is about cue rating capabilities for -- cure ating capabilities capabilitiesrating for the future.
how do you work past that, if it s to be worked past. >> i immediately go back to what we doing as a department, to unlock the role digital can have for us and the knock on effect of the broader digital additives that type of industry 4.0, so you are broader manufacturing capabilities. i view it in two steps, our role as a customer to help catalize that activity in a way that's helpful for the brder u.s. manufacturing ecosystem and two, what investments are we making internally to be the benefits of the digital thread that will ask industry -- we'll ask industry to put together. it'll be easy for us to ask industry to move forward with an industry 4.0 model. swreel to work through things like property right and the rest of it. if you're going to use it on the front end to get the value out
of the life cycle cost requires investments in our own capabilities for management of that digital thread through the life cycle. i think about it what can we do to catalize and are we making the right investments to keep pace with what we're asking industry to do. steve: let me take the harder part of this question and give toyota jeff. will the realization of industry 4.0 initiatives that you're responsible for at lockheed martin, is part of their effect if not their purpose, to put out of business so to speak, maybe literally, 20th century capabilities we can innovate around essentially? or we can succeed with a 20th century solution, a software solution rather than a hardware solution, if you will. jeff: trying to think in terms of tension, at first i'd say the
great tension in realizing industry 4.0 will be modes of working. it will be methods of how we work together to leverage those technologies. if you look at past industrial revolution like the second one, it was decades before we saw whrk weapon started to introduce electricity in factlies before -- factories before productivity improved. it was a long time after computers were introduced before you saw productivity increase. and we're not seeing frit the fourth industrial revolution. you have to think in terms of expectations and methods of working with our customers and supply chains. if you force new technology into old ways of working you never see the benefit of it. the example i give, email. you'd type up an interoffice email, put it in an envelope, the red string around it and send it around. then the digital revolution comes along. what do we do now? we type an email and send it
around the office, it's the same thing. except we can do more of it, more 'm not sure is productive. we're just now seeing new tools that let offices work together. the long way of answering your question. the tension is can we accept and, you know, put into language whether it's statute or policy way of working that let us realize the benefits of the revolution? there's a number of cases where you might go to model based development which is using all digital for a certain product but then your customer will say that's great you did that, but you still have to provide me this artifact because you've been doing it for 2 yores and i still need to see it. you end up doing the work twice. at this point aye talked long enough i've forgotten your question. steve: i'm sure arun will not.
it's got to be the case on the hill that they see policy around anchor chains and buggy whips is a real part of life. arun: all institutions struggle with moving into the future. steve: fair enough. the military institutions struggle with this as well. i think what makes members interested and excited about, we'll call it industry 4.0 is the fact that it's going to be a fferent model from where you perform the innovation, what are the technology is you're interested in next week it won't be developed in a government-owned, government-operated laboratory behind fences like things used to be done in decades past. i guarantee that the folks developing it won't be the corporate research labs that are trying to mature the prototypes,
they don't exist anymore. it'll be some strange combination of universities and small businesses and entrepreneurial professors with private sector money maturing these things. and i bet you they won't be by a d for the military set of large primes who corn they are market on production. the models by which industry and the government will invest in innovation and stimulate that innovation through pro toe typing and get into reduction will be more hybrid. they're going to, from beginning to end have a big prime presence a big university presence and have a small, innovative business presence. i think that interests the members. the other thing is, since all these things revolve around work force so much, that then involves the state and local governments much more than the federal government. so from beginning to end,
whatever that technology is next week, you're going to have a different kind of model of development of the i.p. and the work force to manufacturing. i think that's something members will get very behind. >> the tension there, i don't see as will the buggy whip makers go digital? it's a question of, are we going to put in place the incentives, the business case so they will go digital that to me is where it is. they'll go digital if we make it in their economic interest to do so. if we make it in their -- to make it in their economic interest to do so requires changing our mode of work. steve: carolyn did you want to igh in on buggy whips versus industry 4.0. carolyn: everyone is talk about technology and people. you need both to move forward. every industrial revolution we have seen jobs go and new jobs come. i think this in -- in this
further industrial revolution there are a whole host of new opportunities. it's hard to use these technologies. as jeff said, it's changing the way we work today, it's going to take time. i think we need to make sure we have an eye toward programs that allow us to accelerate that timeline. got years ago when dmdii off the ground there was resistance to digital. some people said that's not going to apply to me, i can't worry about this because i don't have the work force, and i'm trying to get production out the door. today i think there's an increased recognition that digital is going to affect all industrial companies and how are we going to make sure that we have access to those technologies and that we can put them to practical use and very importantly that we have an r.o.i. case, a real business case for these. that's what eric was just
saying. there are ways to incentivize this, we have to make sure that maybe the incentives are also aligned with what is the real business case we are trying to -- what's the return on investment we are expecting and there's actually a host of case studies, many of which we're developing with our partners here at dmdii that tells us there's productivity increase when digital technologies are used but it's not about one to one. it's a one to many. and that means that you've got to figure out a way that the many can have access to these solutions. steve: we're going to take questions from the audience. if we can unabashedly embrace the idea that the government is going to incentivize, you know, constituents of the economy to do things that are strategic us to that would be an important, believe it or not, advance in
industrial policy in this country, defense industrial policy. and i'm hearing all four of you say we can -- yes we can. >> we don't have a choice. steve: i'll start here unless there's a question in the back, i'll start here on the front row and then to the gentleman in the third row. wait for the microphone. right here please. and then give a microphone to the gentleman in the third row. > it's good to be reminded about this. my question has to do with the two black holes and achilles heels in all this, what do you do in war in terms of retention and replacement and repair? world war ii, the navy started with five aircraft carriers in the pacific and lost all but one, by the end of the war we had 100. the eighth air force lost bombers you could build
liberators and mustangs in days if not weeks. mccain and fitzgerald were badly damaged, it'll take two years to bring them back. keeping our current advanced fighter and helicopters even operational in peacetime is very difficult. so what are your thoughs about what happens in a real war and you're looking at china and russia this is not going to be the types of war we've fought since vietnam in terms of battle damage repair and indeese replacement of advanced systems? steve: eric, can we start with you, and then to jeff? eric: the ability to kind of measure the resiliency of a system in response to that is very important. one of the efforts we have taken on as a follow-on exercise is actually trying to model out certain elements of industrial base to identify where we would we have bottlenecks and how would we go and bottleneck that part of the system? to your point, it's a question that will have constraints,
let's identify where the constraints are it may be at the prime level and it's going to vary if we're talking about emissions versus manned fighter aircraft. steve: jeff, is industry ready to mobilize as needed? jeff: i guess i come back to technology when you think about surge. we've goten a lot better recently at doing things quickly. we've gotten better at using advanced technology like 3-d printing to do things quickly. so i think that will help address that. also you mentioned availability which is a big deal of access in the field. anything you can do to drive that up is all the direction. and we've seen tremendous success in data analytics, health management, being able to -- we see this a lot especially right now in the commercial world, the commercial helicopter business where availability like
for getting helicopters out to platforms is critical. they put a lot of investment into, pe we paw lot of investment into that. same algorithms can drive the availability of that in the field. that starts to get at the surge issue if you have them all, that helps. beyond that i'm optimistic about the role of technology provided e can deal with acquisition re -- related issues. it's not so much about the technologies there, it's about methods of work that will be addressed to get there. steve: there's a question on the third row, and then i'll come to the woman in the fifth row. >> the takeaway i got from the report among other things is we can't do it alone.
the national technology and industrial base was expanded with f.y. 2017 to include u.k. and australia. i'm wondering about how you view other partner and ally countries. you've mentioned israel in another venue, japan and south korea both come to mind as countries with very, very strong industrial bases. how do we take competitors and incorporate them into a strategy? because my sense is that we've got a lot of catching up to do. steve: eric and then arun if you could weigh in on that as well. eric: in line with the secretary's priority about building alliances and partnerships, industrial cooperation becomes an important art part of that i think of force structure the same way as this ability. we've shared our view on where ally cans play a role with, i
think at this point, five other allied countries which you mentioned some of some of, some you haven't. the concerned you atloon --out lined are concerns they share. we're in a dialogue with them about the portion theefs risk identified, could we work collaboratively to address. we also have bilateral agreements to security supply arrangements, does that become another mechanism? and without a doubt our allies are a part of the answer. this brings back cfius conversations and one concern we raised with them, participation within our defense industrial base comes with the need for a certain level of foreign domestic investment protection. we're working with -- working with our allies on updates to their own regimes. you've seen progress on that front with the u.k. looking at the enterprise act, canada, the e.u. updating their foreign direct investment protection. i think there's elements of how do we work together to address
the concerns tactically but also put in place the structures necessary for deeper integration. steve: arun, on the hill using allied and other industrial bases to help build some of -- fill some of these gaps will that go down ok? arun: the hill has been supportive of expanding the concept of the national technology lo -- tech no clock call -- technological industrial base. the struggle will be spending money overseas as opposed to jobs here. that's a big political driver. some of the issues that eric has mentioned. if i am short technical work force in this country to support innovation in this country, spending money overseas may or may not stimulate more development of that work force in this country. that's an interesting question to ask. i think there's concerns with even our domestic small
manufacturers and small businesses in terms of cyber security issues. if you expand our industrial base to include other countries that does that mean we have to worry about cyber security for all those elements in our industrial base? and then on the financial investment side, the cfius engagement with the domestic companies is already overwhelming and taxing to the government and its ability to track transactions, understand transactions, understand complex ownership what does that do then if i expand the industrial base o these other jurisdictions. the other piece, tying become to the previous question is that if you do need surge production and repair in times of conflict, someone needs to explain to my bosses then what does this concept of a global industrial base mean in those kinds of periods and then tie back eric's
trying to develop the modeling and simulation capability that can show what happens during those periods of conflict with this globalized industrial base. i think those will all be thing ours members will have to consider if we try to expand it even further. >> it must be said or i feel compelled to say that when in the summer of 2017 executive order 13806 was promulgated, some among them me, saw it as a pretech for protectionism. it came in the context of other uses of section 232 of the defense production act, etc. steve: i want to be one of the first to say, i hope i'm not the first to say, that's not the way the report came out at all. the report acknowledges and is open to the need for allied industrial bases to participate in and serve as a strategic hedge, as a principal supplier and strategic hedge in many of these things. i commend the administration for the way that ended up landing on
its feet in my opinion. there's a question in the fifth row and the gentleman in the same row with the beard will get the next question. we condition hear you yet. put it right to your mouth. >> marge rhee with inside defense. we were reporting last week that there were concerns about cfius expansion, i know that's a treasury department rule but i wonder if your office is getting involve odd related to allies. >> we have had conversations on that topic and other allies. what i suggest to folks is what was implemented on november 10 was a pilot program for how we'd exercise some of the new cfius regulations. we'll go into the reg writing possess over the next year where the finalized regs will be finalized. their concerns there raised are something woo we'll certainly look at and work through with treasury to address it, we think
that's consistent with our national security concerns. steve: and that gentleman and then we come over to this side of the room to the gentleman on the second row. >> dylan ritman, congress, for the defense production act do they typically have allocated funds at the end they have year for emergency matters like cfius? and how long does it typically take to allocate money from those funds to the company? steve: again, we'll prevail on -- and then caralin caralynn, we'll go to you. eric: one of the things i've asked the team since i've come into the role is increase our ability to get transactions done. i think prior to historically almost two years on average to see application of that which in the modern sense doesn't apply
because your average company is on an annual cycle. my challenge to our team is how do we reduce the time span necessary so it's relevant within a year. steve: explain to the audience what's a title one, title three? erbling: title three authorities -- eric: title three authorities are designed to allow us address shortfalls, it's an authority that was re-authorized in the last ndaa. to make the most of it we have to increase the speed by which we're able to deploy. steve: caralynn, it's not part of the defense production act but hue does the funding for that come to pass? caralynn: again, the manufacturing u.s.a. institutes were envingsed, it was designed to be a program that was truly a partnership so for every $that the federal government invests,
i believe that across the manufacturing institutes, what we have seen is actually $2 to $3 for every dollar the federal government has put in, and that's continuing to grow. the dmdii receives an amount of funding from the manufacturing technology office, the office of the secretary, then there's also funding that comes from our private sector partners. and that funding comes in in two fashions. one, it comes to support the operations of the institute, support that around the table conversation that jeff mentioned, convening of the various partner groups, and then also, the work force development and education that comes along with our mandate. then there's also investments that the private sector makes in technology development and transition. i would say what began as a way for the department of defense to cede veft eshgse investors, or catalyze private sector investment, we are beginning to see a transition where the dod is playing hopefully increasingly more of a partner and ultimately customer role,
where we can work together to define how can different advanced manufacturing technologies, in our case digital, solve the needs of the military services and agencies, and so increasingly, i think we're going to see more investment from dod that's coming from the military services and agencies with obviously the partnership tie to the office of the secretary. >> thank you. arun, you wanted to put a tag on that? >> i think one of the elements of acquisition reform over the past however many decades that's been left out is the way the government handles money. so if you had to think about how to best invest in innovation in a thing like biotechnology or software, moving it from prototype to production, how would you have the government budget for this, how would you have expended, -- had it
have it spended, would you actually come up with the arcane colors of money rules and financial management regulations we use today? i would assert probably not. i think going forward, we are talking about partnerships between universities and industries and government, we also need to think about how that money can be more sort of seamlessly flowed even back to the original point, the timing of that, of when that money can show up so that it's actually there when the opportunity presents itself. i think going forward, we should all be thinking about if i had to rethink financial management rules within the government, budgeting rules within the government, appropriations rules on the hill, what would be a more optimal set of rules to let the military sort of stay ahead of these technologies? harkening back to a previous point you made, could we bring some people from finance, from commercial finance, wall street, venture capital, who can tell us how -- what the barriers to the way we do it now are, and how significant they are. there's a question here and then that gentleman with the blue
shirt will get probably the last question. >> thank you. john harper with "national defense magazine." i have related questions. mr. seraphin, can you flesh out a little bit how wall street and the banking community could contribute to defense industrial based policy and what could be done to facilitate that. >> one question, go ahead. >> i think it's the kinds of things we have been talking about. we need better understanding of how to think about a changing industrial base and i would assert that that expertise is sitting in places like wall street. we need to think about when targeted investments from the public sector is needed to shore up investments in the private sector, and at what point in the tech maturity pipeline you need to make those kinds of investments. what could places like the hill or the pentagon do? well, we have a very good system of bringing in like i mentioned, technical experts from universities to help support r & d innovation. we have a great system of using
reservists to shore up talent needs in the pentagon. maybe we should be thinking about reservists who have the kind of business expertise that would allow for this kind of industrial base analysis or financial management analysis to reshape pentagon policies going forward. >> by the way, it must be said one of the reasons eric is so effective in this job is that part of his biography i didn't mention is before he was an army officer, he was an investment banker. last question. >> this is a question on the industrial policy and invent incentivizing given the global market base. in the 1800s, we adopted the metric system. yet today we are still using the old system. every mechanic has to own two system tools and we have lost millions of dollars in failures because of conversion between the systems. the federal government, the dod has the motivation and the leverage to get manufacturers to actually adopt the metric system.
this is happening, and if not, why not? >> jeff, are you the guy -- >> wow. i have no idea. >> [laughter] >> that's probably not the right answer from a panel. [laughter] so we have the bulk of our product of course are made in the u.s., roughly 93%, but we do have a global industrial footprint. we have canada, the uk and australia so we had to grapple with these issues and as you point out, there is a history which is replete with losses and expensive losses because of that failure. the system plays an important role in establishing standards. beyond that, i'm not sure. >> this question does resonate with one of those tensions. we're not going to go back over it, but it resonates with the tension that there is an instant
culture that sometimes has to be overwhelmed or overturned in order for us to have an effective defense industrial policy. everyone is nodding. i don't think anybody disagrees. i hope you also wouldn't disagree, it's harder than that. it's harder than nodding. it's really hard. ok. we are within a couple minutes of the end and i want to give each of the panelists first a round of grateful applause. [applause] truly, i'm grateful to each of you but also, an opportunity to give us a last word. i think we will start over there in chicago with caralynn and with eric. caralynn, last word? >> thanks, steve. something that's resonated throughout this entire panel is around connectivity and coordination. i think that this is a real opportunity for us right now to be able to coordinate across the public sector, across defense, but also across the private sector and academia and small business, and begin to not just
coordinate a program but also coordinate the people and to the point you just mentioned, the culture change that's going to be necessary for us to really realize industrial 4.0 and the opportunity. thanks for the opportunity to provide the comments today. >> arun? >> you for the opportunity. -- thank you for the opportunity. the administration has put out and the hill has directed a series of documents that have just recently come out, like eric's study and the white house advanced manufacturing plan and the national defense strategy commission report. it will be interesting to see how both the executive branch and the hill turn those kinds of high level documents into tactical policy actions, so i think we're all looking forward see how that plays itself out over the next 12 months or so. >> this game is afoot. publication of that document a month ago almost marks the hardly the end or
any stopping point. >> i will close with my thanks as well. if we had another hour and a half, i think we could. it shows the limits to realize the benefits of the robust potential future. training, to be apprenticeship programs, different ways of working. we really have to fundamentally come together with things like certificate programs, alternate careers. we could spend another hour and a half on people , that would be super. bar none the dominant recurring theme of all of the events that i do around topics of defense industry and industrial policy. eric? >> i echo the thanks to the atlantic council and the opportunity to speak with my colleagues. a couple quick quick points. there is an element of meeting
to retool ourselves. retooling ourselves across the national security base which i an attempt to broaden the source will looking for for the competition. this report intentionally focused on the fight tonight, if you go to the 19 ndaa there's a private to do future energy technologies. -- and technologies. think of that as an ad to it. but the mandate was large enough we wanted to focus it on more explicit things. the third point i believe with this if you've got a resistance for whatever reason to the term and industrial policy, just think of it in terms of strategic supply management which to your point about wall , street, the expectation for any large fortune 500 company has to do that because it is mindful in terms of how you cultivate a supply base. >> all right let's all go forth , and be mindful about cultivating a great u.s. defense industrial base. thank you very much.
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