Remarks by Secretary Carter at the Commonwealth Club, San Francisco, California

SECRETARY OF DEFENSE CARTER:  Thanks Gloria so much.  What a wonderful, warm introduction and Gloria left herself out of that story and I want to get back to that in just one moment old pal.

I also want to recognize Secretary Perry, Secretary Schultz.  Thanks both.

(Applause.)

SEC. CARTER:  Many other distinguished guests here.  Thanks all of you for coming.  One of my core goals in this job has been to build and in some cases to rebuild the bridges between the Pentagon and America's wonderfully innovative and strong technology community.

When I visited here the first time, the secretary of defense, back last April.  I discovered that I was the first secretary of defense to have visited Silicon Valley in almost 20 years.

So today, it's my pleasure to be here on my third, official trip in that time to the Bay area to speak with you about the common challenges we face and the extraordinary opportunities that we share.

Now, almost a quarter century ago, Gloria and I had the privilege of working together for Bill Perry in the Defense Department during those critical days after the end of the Cold War.

It was evident then, as it was after the end of World War II, that America would be called upon to stand as the world's foremost leader, partner and underwriter of stability and security in every region of the world.

It's a role we continue to fulfill today, even as we're now entering a new strategic era.  And as I mentioned that -- those former times, I need to say that we take it for granted now, but without the effort of Gloria Duffy who was carrying out the (inaudible) of our program for Secretary Perry and me, those nuclear weapons would not have been removed from Ukraine, Kazakhstan and Belarus.  That is a historic achievement-- so there you go.

(Applause.)

SEC. CARTER:  I came from Washington where last week I laid out our defense budget for 2017.  In that budget, we are and we need to take a long view in our mission to defend the United States.  We have to, because even as we fight today's fights, we must also be prepared for what might come 10, 20 or 30 years down the road.

This is particularly important today, because today's security environment, like everything else, is rapidly changing.  It's competitive.  It's dramatically different from the last 25 years.

It's going to require of us new ways of investing and operating for the U.S. military.  Five evolving challenges.  Namely Russia, China, North Korea, Iran and terrorism, now drive DOD's planning and budgeting.

And I want to describe briefly each of them to you before I dive more deeply into some issues that I know are top of mind for this particular community.

The first two of the five challenges, reflect a return in some ways to great power competition.  One is in Europe where we're taking a strong and balanced approach to deter Russian aggression.

The second challenge is in the Asia-Pacific, the single most consequential region for America's future, where China is rising, which is fine, but behaving aggressively, which is not.  Now, we don't desire conflict with either of those countries, and while I need to say that they pose some similar challenges militarily, they are very different nations and very different situations, and our preference is to work together with important nations.  But we also cannot blind ourselves to their apparent goals and actions.

And meanwhile, two other longstanding challenges pose threats in specific regions.  North Korea is one; that's why our forces on the Korean Peninsula remain ready, as they say and have said for decades now, to fight tonight.  The other is Iran, because while the nuclear accord is a good deal for preventing Iran from getting a nuclear weapon, we must still deter Iranian aggression and malign influence against our allies and friends, particularly Israel.

The fifth challenge -- very different from the other four, very important -- is our ongoing fight against terrorism, and especially ISIL, which we must and will deal a lasting defeat, most immediately in its parent tumor in Iraq and Syria, where we're accelerating our campaign in every dimension, as well as where ISIL is metastasizing around the world.  We're doing that in North Africa.  We're doing that in Afghanistan, where we continue to stand with the Afghan government and people to counter Al Qaida, and now ISIL.

And all the time, all the while, we're continuing to work with other government agencies to protect our people here in the homeland.  We don't have the luxury of choosing among these challenges.  But we do have the ability to set a course for the future, a future that's uncertain but will surely be competitive and demanding of America's leadership, values and military edge.

That's why a common theme across our budget is that DOD has to innovate to be competitive in a competitive world.  As I like to say, we in the Pentagon need to think outside of our five-sided box.  And that's why, just to give you one measure, we're spending $71.8 billion on research and development next year alone, constantly increasing.  For a little local context, that is more than double what Intel, Apple and Google spent on R&D last year combined. 

That money -- those funds go to fun things like making DOD the leader -- a leader in cybersecurity -- more on that later -- advancing our commanding lead in undersea capabilities and developing new hypersonic missiles that can fly over five times the speed of sound.  It involves advancing artificial intelligence, autonomy and robotics so that no matter what our enemies throw at our systems, they just work.  It enables taking long-existing systems and giving them surprising new capabilities.  And it invests in new strategic approaches to preventing and winning conflicts against 21st century threats.

All this reflects our understanding of how much technology development has changed in recent decades.  When I began my career, most technology of consequence originated in America and much of that was sponsored by the government, especially by DOD.

Today, much more technology is commercial.  And as many of you know, the competition is global.  For these reasons, our budget also invests hundreds of millions of dollars next year in building and rebuilding bridges with America's technology and business community, including here in the Bay Area because we need a strong partnership to succeed in the 21st century to protect our people and make a better world for our children.

One way we're reaching out is through our Defense Innovation Unit-Experimental, or DIUX as we call it, which I opened in Mountain View last year to explore different ways-- a  variety of different ways for DOD to better tap into the region's innovation ecosystem and build relationships with local companies -- some of which I'll be meeting with later today.

And we're still exploring.  We're still innovative because we want to be iterative.  We want to be agile.  Another example is the Manufacturing Innovation Institutes that we're co-funding with the private sector in key technology frontiers, including the one focused on flexible, hybrid electronics located in San Jose.

There, over 30 of our partner organizations have a presence between Silicon Valley and the Golden Gate Bridge, including companies from Apple to Lockheed Martin to Xerox.  We opened that a few months ago on my previous visit.

We're making these investments here because our military must always be capable enough to deter even the most advanced future threats in a changing and competitive world.  And this means that just like competitive companies here in the Bay Area, we have to innovate and seize opportunities in everything we do.

Just as companies here are constantly restructuring and reevaluating their approaches to their competitors, we too at DOD are doing the same, making our contingency plans and our operations more flexible and more dynamic in every region.

I can't talk about this much here, but it's yet another place where our military commanders excel over others.  Just as companies here compete furiously for the best talent, we in DOD must do the same.  It's an all-volunteer force.

That's why we're building what I call the Force of the Future.   Because as good as our technology is, it's nothing compared to our people.  They are what make our military the world's finest fighting force.  And in the future we must continue to recruit and retain the very best talent from future generations.

That's also why we're opening all combat positions to women, to expand our access to 100 percent of Americans for our all-volunteer force. Competing for good people for an all-volunteer force is a critical part of our military edge and everyone should understand this need and my commitment to it.

And just as companies here in San Francisco continually seek greater efficiency to benefit both their customers and their shareholders, we in DOD are pushing Congress for much needed reforms across our enterprise.  From acquisition reform, to closing bases that we don't need, to reducing overhead, so that your taxpayer dollars will be spent more wisely and so that our troops get everything they need to succeed and come home safely.

We're doing all these things to make sure that the remarkable stability and prosperity that's been achieved in the Asia-Pacific region and around the world can endure.  Trade requires safe passage.  Investment requires stability.  Innovation requires freedom.  And each of these requires security. 

It's been said that security is like oxygen; when you have enough of it, you tend to pay no attention to it, but when there isn't -- when you don't have it, it's all you can think of.  Security is what enables the stability and success of global markets, and the very foundation that shapes the global order depends on the physical and perceived security that the Department of Defense provides.

Whether you think about it or not, this community right here can and will continue to thrive because that foundation has been rock-solid, from the seas to space to cyberspace.  Indeed, the Bay Area's prosperity depends on connectivity to the wider world and stable markets enriched by global investments.  It always has, first as a port in the Gold Rush through to the present.  And now today, this community thrives because of an open global marketplace, including over the Internet.

And increasingly, many tech leaders here are now seeking to reach above the sky, building and launching path-breaking satellite and space technology, a reflection of how the world looks here to you in the Bay Area.  It looks to you to see what that next great thing will be.

In these three critical domains, the oceans, the Internet and outer space, continuing to ensure the free movement of information, goods and services will require the private sector and DOD to work together.  And it will require fresh thinking -- in the Bay Area, yes, but also in Washington -- to chart a future that brings a common benefit and a common wealth to all of us.

We've done this before.  Seventy years of security, stability and prosperity on both sides of the Pacific didn't happen on its own, neither did the extraordinary leaps that allowed us to network the world and reach for the stars.  All three were a product of hard work and focus by generations of individuals -- military and civilian, government and industry alike -- who stepped forward together to build that prosperous future. 

The government helped ignite the spark, but this was the place that nurtured the flame that created incredible applications.  Now, we must do so once again and renew and strengthen our partnership, lest others chart the future instead of us. 

Let me begin with the guiding example of the sea.  San Francisco's history, as I noted, is inextricably trade -- tied to trade in the Pacific.  The remarkable diversity of commerce and people who've crossed the Golden Gate over the centuries proves that the Pacific has never been the domain of any one nation; it belongs to and benefits all. 

But that common benefit relies upon a foundation of stability and peace.  Since the end of World War II, the United States and our military have played an indispensable role in helping create that foundation of security, allowing people, economies and countries to rise, prosper, innovate and win.  First Japan, Taiwan, South Korea, then the nations of Southeast Asia, and now, yes, China and India.

Hundreds of millions of people have been lifted into the middle class. And in many nations, democracies have taken hold.  America's policy of rebalancing to the Asia-Pacific is about sustaining this progress and maintaining our pivotal role to ensure stability and prosperity in a changing region.  The U.S. Navy patrols the seas to ensure the free flow of commerce, as we have for generations—not only for the United States but for every nation.

We will also continue to forge stronger bonds between the nations of this critical region, including the bonds between our respective defense industries.  When we build things together, the bonds between nations grow stronger and others can share the burden of common defense.

We'll also continue to provide defense systems to friends and allies and train with them to advance the maritime security of all our nations as we're doing increasingly, as more Asia-Pacific nations, from India, through Vietnam to Japan are drawn to partner more with us.  And we're investing in this in our budget too, with -- for example, a $425 million Maritime Security Initiative for Southeast Asia.

Now to be clear, America's efforts in this region have never been aimed at holding any nation back or pushing any country down.  The United States wants every nation to have the opportunity to rise and that includes China.  We welcome its rise and its inclusion in this architecture.  But we don’t welcome aggressive behavior.

We all have a fundamental stake in the security of maritime Asia, including in the South China Sea.  Nearly 30 percent of the world's maritime trade transits its waters annually, including approximately $1.2 trillion in shipping trade bound for the United States.  Like, you can see it.  I saw it in the Strait of Malacca.  Amazing sight when I was in Singapore a little while ago.

That's why the United States joins virtually every nation in the region in being deeply concerned about the artificial island construction and militarization in the South China Sea, including steps, especially by China, as it has taken most recently, by placing anti-access systems and military aircraft on a disputed island.

These activities have the potential to increase the risk of miscalculation and conflict among claimant states.  President Xi stated in Washington a few months ago that China would not do this.  China must not pursue militarization in the South China Sea.  Specific actions will have specific consequences.

Indeed, while some in the region appear determined to play spoiler, the United States and our many friends in the region don't plan on letting anyone upend seven decades' worth of progress.  For our part, it should be clear that the U.S. military will continue to fly, sail and operate wherever international law allows there, as we do all around the world, because the maritime domain must always be open and free to all.

To ensure that the U.S. military's continued ability to project power in the maritime domain and around the world, our budget makes key investments in our naval strength.  One is in undersea capabilities where we continue to dominate and where we're investing over $8 billion just next year to ensure ours is the most lethal and most advanced undersea and anti-submarine force in the world.

Including by the way, with new undersea drones.  Another investment is of course our surface fleet, which in our budget grows both the number of ships and their capabilities to deter even the most advanced potential adversaries and protect the maritime security we all depend on.

All in all the rebalance has dedicated by far, the most, and the newest forces, of the United States to this region.  And more is coming.  All of these military investments are necessary.  They're not sufficient.  Because security and prosperity are inextricably linked, so America must build on its growing political and economic engagement in the Asia-Pacific as well.

Most importantly, Congress must complete action on the Trans-Pacific Partnership Trade Agreement, or TPP.  I've said that from a strategic perspective, with respect to foreign policy, having TPP is as important to me as an aircraft carrier.  We cannot allow anything to undo this critical achievement.  It's time to get this done.

Now, as our military preserves freedom of navigation and the free flow of commerce at sea, we are equally committed to the free flow of information and commerce online.  The Internet was created by DOD, academia and industry working together.  And since then we've seen it enable boundless transformation and prosperity across all sectors of our society, making many things easier, cheaper, and safer.

But as we've also seen in recent years, these same technologies present a degree of risk to the individual people and the businesses who rely on them every day.  Making it easier, cheaper and so it seems safer to threaten all that.  Like so many Bay Area businesses, the Defense Department relies on networks heavily.  Which is why defending our networks and weapon systems is job one for the Department of Defense in cyberspace.

They're no good if they've been hacked.  DOD's second mission in cyberspace is to help other agencies defend the nation against cyberattacks from abroad, especially if they would cause loss of life, property destruction, or significant foreign policy and economic consequences.

And the third mission is to provide offensive cyber options that can be used in a conflict as we're doing now against ISIL in Syria and Iraq.  In the defense budget, we're investing more in all three of these missions, a total of $35 billion over the next five years.  With much, much more than this going to modernizing and securing DOD's hundreds--hundreds of networks.

Part of that goes toward building and training the Cyber Mission Forces, some of whom I'll meet in Seattle later this week.  These are talented people.  Some active-duty, but also reservists and National Guardsmen, who hunt down intruders, red-team our networks and perform the forensics that help keep our systems secure.

And it's just one way the American military is helping protect U.S. interests in cyberspace and preserve access to a free, open and secure Internet, so businesses can continue to innovate and individuals can continue to interact without having to live under any threat.  This is important, because the rules of the Internet, to the extent they exist, have always been a product of all its users.  They weren't written or dictated by anyone.

They came out of garages, and dorm rooms, and home offices and research laboratories.   In many ways, they still do and are continuing to be shaped by individuals, including many here in the Bay Area.  When it comes to the Internet, no one nation, no single entity has the authority to write all the rules for anyone else. 

That's not just my opinion; it's the firm position of the Obama administration, which it has shown in recent trade negotiations, diplomacy and decisions on net neutrality that the United States is a strong proponent of a free and open Internet.  But here too, some nations seek to play spoiler.

China and Russia, for example, are pursuing a very different vision, one predicated on absolute government control of the Internet.  Anti-access policies like the "Great Firewall," state-sponsored cyber theft, including theft of intellectual property, cyberespionage and also cybercrime.  Just last week, China's government further restricted foreign companies from publishing and distributing online content in China and made it clear that state media would speak for the party's will alone.

We've seen that China aims to, as one news headline put it last week,  quote "Rewrite the rules of the global Internet," end quote.  Limiting the access of their 1 billion-plus citizens to an open society.  China has also indicated an intent to require backdoors to all new technologies, potentially forcing the world to operate and innovate on China's terms. That's not right.

Clearly this approach is contrary to the values we share as a nation here in the United States.  So let me take a moment to tell you where the United States government and the United States Department of Defense stand on this issue.

We share the same underlying objectives and values as America's technology community and we believe in living the values we defend in the Department of Defense.  We believe we all have a stake in protecting intellectual property and making sure the Internet remains free, open, secure and prosperous.

And that means we must continue to respect, and protect the freedoms of expression, association and privacy that reflect who we are as a nation. As secretary of defense, my mission is ensuring our military can defend our country and make a better world.  And DOD is at its best when it has the best partners.

Knowing how we've worked together in the past with those of you in the innovative tech sector and how critical your work is to our country, strengthening that partnership is very important to me.  And I'm glad that we've started to make real progress on that over the last year.  We always want America's best contributing to our national security and for it to be a two-way street. 

There's a lot we can learn from each other on better securing our networks and defending against emerging cyber threats.  Getting it right depends on getting the right people, which is why we're creating new ways to bring talent from the technology community into DOD, even if only for a time, a year or two -- a project, so they can help us do better.

An example of this is our new Defense Digital Service, which brings in talent from America's vibrant, innovative technology community to help solve some of our most complex problems.  And I brought its leader, Chris Lynch, out here with me. 

Chris, stand up and wave.  Before Chris came here -- great guy.

(Applause.)

SEC. CARTER:  Before Chris came to us to help us, he was a serial entrepreneur here in the tech world, also worked at Microsoft.  He's recruited in -- in this role for me -- he's recruited coders from places like Google, and Palantir and Shopify for a tour of duty -- we call it tour of duty here at -- back in DOD.  And he's done such a good job of cutting through red tape, he even figured out how to get away with wearing a hoodie everyday in the Pentagon.  That's what he looks like.

(Laughter.)

We want people like Chris to help keep us strong, creative and forward-thinking, and hopefully, that infusion of innovative, entrepreneurial spirit will rub off on us and help sustain and strengthen the bridges we're building with the tech community for many years to come.  I'll have more to say on that tomorrow.

I know the issue of data security, including encryption, has been a hot topic here in the Bay Area and around the country.  There are limits on what I can say about the case that's been in the news lately, I'm sure you know which one I'm talking about, particularly because it's under litigation and it's a law enforcement matter.  So let me speak more broadly, because this is one of the most complicated challenges of our time.

First, it's important to take a step back here, because future policy shouldn't be driven by any one particular case.  Second, encryption is a necessary part of data security and strong encryption is a good thing.  DOD is the largest user of encryption in the world, principally because our troops need it.  It helps keep our fighter jets and our sensor networks from getting hacked, it allows us to surprise our adversaries and it lets our people deployed around the world communicate securely with their families back home, from sailors aboard aircraft carriers to soldiers in Afghanistan.

For all these reasons, we need our data security and encryption to be as strong as possible.  Third, as we together -- together engineer approaches to overall human security in the information age, I know enough about technology to recognize that there will not be some simple, overall technical approach, including the so-called back door.  The bottom line is that the tech community and policymakers need to work together to solve these complex challenges, just like they have in the past.

Future technology will only grow more complicated, and in this global marketplace, failing to work together would risk letting others set the standard on their terms and according to their values, and that wouldn't be consistent with our values and it wouldn't be good for U.S. businesses either.

The right way is partnership.  It's easy to see the wrong ways to go about this.  One would be a law hastily written in anger or grief.  Another would be to have the rules written by Russia or China.  That's why the Department of Defense will continue seeking to work with Bay Area companies, because we're living in the same world, with the same basic trends and the same basic threats and we must innovate the way forward together.

Meanwhile, as we work together to protect the free flow of commerce at sea and online, we must also recognize the opportunities and the threats to the free and open domain of outer space.  Many companies in this community are now exploring the frontiers of this domain and nearly every business depends on it to some extent, even if for just -- for just things such as communications and GPS.

In DOD, we rely on it just as much, and we have for quite some time.  From secure communications to reconnaissance satellites, to allowing for precise navigation and targeting, space is integral to our operations.  Indeed, space enables great things here on Earth for security and prosperity, from financial companies with global presence, to the remote street vendor conducting business with a satellite phone.

GPS, first developed in partnership with the Defense Department and maintained for decades, including up to this day, by us is now woven into every aspect of our lives, from hailing a car service on the Embarcadero, to finding and targeting terrorists in the Middle East.  All that.  And decades ago, we pioneered space together, you and us.  It was the innovation of this region that led to the cutting-edge satellites that have quite literally changed how we see the world today.

Today, many companies are going into space now on their own, with ambitions for greater commercial imaging, micro-satellites, even aspirations for tourism.  Just as government-led efforts in space have benefited both our security and our society, private-led efforts are doing so also, one recent example being that the public disclosure of China's surface-to-air missiles in the South China Sea was due to being discovered in commercial satellite imagery.

However, this emerging marketplace is leading to a reemerging challenge.  Space can get crowded, particularly with many companies and many nations seeking to operate there, in ways we've never seen so many do before, including some that can pose threats to safe global order in space. 

To give you just one example of the dangers we would face if space turned from universal benefit to unrestricted battlefield, consider the longevity of space debris, which can cause great harm if it impacts a satellite or a spacecraft.  When a Chinese anti-satellite test destroyed a defunct weather satellite in 2007, it dispersed over 3,000 pieces of debris, expanding the amount orbiting the Earth -- the total amount by 15 percent in one moment.  The remnants of that satellite are still there and they'll be there for over a century, just as 100 years after the Battle of Verdun, French farmers still encounter unexploded ordnance in their fields.

A kinetic battle in space could leave behind a legacy that would last far longer and make this common domain hazardous for commercial applications for generations.  And make no mistake, both Russia and China have developed just such anti-satellite systems.  Just like with the maritime and cyber domains, therefore, it's in the self-interest of every nation to advance the common interest of free and stable environment in space.

While in the past some may have thought of space as a sanctuary, DOD must now prepare for and seek to prevent the possibility of a conflict that extends into space, and we are.  In our budget, we're continuing to invest more in space, totaling more than $22 billion just this year, including with investments to enhance our ability to identify, attribute and negate threatening actions by others.

DOD has a responsibility to protect its assets and interests in space and to ensure this domain remains available for both security and commercial applications.  This too will require working together more with the private sector.  We know that.  Commercial space needs must be considered and protected to realize the continuing promise of this remarkable domain, and the only way to do that is through effective partnership and communication, once again.

We believe strong rules of the road that grow out of the commercial and civil interest in space will benefit all nations.  They will propel American space entrepreneurship, which directly benefits national security, and they will allow us to differentiate between acceptable and unacceptable behavior in space.

Let me close with a reminder about how much we've done together to shape the world in each of the three domains I've discussed, the sea, cyberspace and outer space, because in many ways, we don't think of it enough.  When someone orders an iPhone, they buy a device that brilliantly harnesses breakthrough technologies that were seeded by DOD and government investments, from multi-touch to iOS's Siri.  Chances are, they order it using the Internet that DOD, industry and academia helped create together.

The phone gets packaged in Asia, then shipped over an ocean our Navy patrols to ensure that that shipping goes unimpeded.  And it's tracked from start to finish by GPS technology, which DOD could not have invented or launched without a robust, innovative private-sector.

DOD's fundamental promise is to protect U.S. citizens and our interests, but we're most proud of providing the foundation of security that underpins global stability and prosperity.  That's why the partnership between the Department of Defense and this community is so important.  It's true that because we have different missions and somewhat different perspectives, sometimes we'll disagree -- and I think that's okay, because whether we're developing a new product or a new policy, the lesson to me is always the same: vigorous debate and exchange produce breakthrough ideas.

My pledge to you is this: you will always have strong and willing partner in America's Department of Defense.  You can count on your military, the finest fighting force the world has ever known, to do its part so that you can continue to innovate and excel with us for generations to come.  Thank you.

(Applause.)

STAFF:  Mic check.  Can you hear me? 

SEC. CARTER:  Yes.

STAFF:  Okay.

SEC. CARTER:  I can hear you.

STAFF:  Our thanks to Dr. Ashton B. Carter, United States secretary of defense, for an extremely substantive speech.  We have audience questions, I have a few question of my own.  So off we go.

You made history last December when you opened all combat jobs in the military to women.  What led you to this decision?  How is implementation of the decision going?  Are the military services supporting it?  What challenges remain to fully integrate women into all jobs in the military?  And when will that integration be complete?

(Laughter.)

SEC. CARTER:  All good questions.  All good questions.  I mean -- you know, and fundamentally, the question is why did we do this in the first place, what's the point?  And a lot of people think fairness, and fairness is important, but the real reason is that females are half of our population and we're an all-volunteer force.  And so what's important to me, for mission effectiveness, is to have access to the entire population.  That includes the half of the population that is female.  By the way it includes others.  We are not as geographically diverse.  That's not the point -- (inaudible) -- in the country so that we don't have access to all the very best.

Now, let me just remind you that we don't let that many people in.  We like picking and choosing.  And sad to say, about three quarters of young Americans don't qualify for our military.  So we need the very best.  Now, it's important to say, and you were asking about implementation.  Just declaring positions open to women is not successful implementation.  There are real issues here. 

They were -- this, by the way, you asked.  This was the recommendation I received from the chief staff of the Army and the chief naval operations, the chief staff of  the Air Force, the secretary of the Air Force, secretary of the Army, secretary of the Navy, the commander of special -- U.S. Special Operations Command, the commandant of the Marine Corp had some, at -- raised some issues which are very valid ones that I felt could be dealt with, but had to be dealt with in implementation and that's what we’re doing.

And to get to your point, implementation is really critical here and we need to do it right and we will.  But I'm confident we'll be able to do that and it's part of the way I think we need to think about the future.  By the way, we need to think generationally, not just gender.  Because kids today are different from us.  They have a different way of thinking and we want the very best of them.  We have to kind of understand what makes them tick and where we can make adjustments that make us attractive to a new generation.

So, it is an all-volunteer force.  I think the all-volunteer force is terrific, it's the way to go.  That's why we have the most wonderful people.  People all over the world love to work with them.  They love to work with Americans.  They're competent and they treat them wonderfully.  We have these great people but it's not a birthright.  We've got to constantly reach out. 

So this is just one place where we're trying to make sure that we're reaching all -- but that's the basic point of the whole thing.

Q:  There's been some discussion about whether women should register for the draft and so, who makes that decision?  How will --

SEC. CARTER:  It's not made and I don't want to speak for it because there's a separate part of the government that does Selective Service.  And by the way, it's all prescribed in law.  I mean, it stands to reason that Congress would reconsider that, given that women are now -- qualified women—qualified women who can meet the standards are allowed to compete for any position in the U.S. military and it would stand to reason that they would look at the Selective Service law.

I just want to say one thing.  As secretary of defense, I don't want a draft, for the reason I just told you.  I don't -- I want to pick people.  I don't want to be given people because sad to say, half of the young people in America don't meet our physical standards.  Ten percent of them have law enforcement records that prevent them entering our military.

About a third of them don't have a high school diploma and almost everybody we recruit in the military has a high school -- well, 99 percent have a high school diploma.  And so, we want all volunteer force.  That's our strength.

Q:  As you might imagine, there are many questions about collaboration and cooperation with Silicon Valley and DOD.  So first of all, how can technology help, for instance, in defeating ISIS and ISIL, when they respond by moving from website to website, from one social media outlet to another.  So this is the Internet it's a very fluid world.

SEC. CARTER:  It is and so we have to be very agile.  But the purpose is very simple and it is the kind of thing we've done in electronic warfare over the radio spectrum for decades and decades, namely interrupt the enemy's ability to command and control forces, undermine their confidence and the integrity of their communications, prevent their ability to resupply, to move and so on. 

And here, we're -- we have to do this.  ISIL has to be - it will be defeated.  We want to do that as quickly as possible, so we're looking for every way we can accelerate that defeat.  And using cyber in Syria and Iraq is one of those ways and we've got to do it and we have ways of being effective, despite the fact that they, like everybody else who uses the Internet, has some ability to be agile, we need to be more agile.

Q:  So the detail in this question suggests -- comes from someone in the Valley industry.  In order to redefine how the DOD collaborates with Silicon Valley, things like flexible business transaction tools, broader adoption of best practices or even the creation of a strategic Silicon Valley investment arm would help, but would necessitate more risk for the taxpayer.

How do we start talking about and reinforce the importance of this shift. 

SEC. CARTER: I think I get the question and they're just putting it very nicely.  But I think their saying, do you have to be such a clunky buyer?

(Laughter)

And so that's -- it is a fair question because the companies always meeting with some new companies later today and then -- if you tell them, well you know, it'll be 18 months before you get a decision about whether you're going to be funded or not, that's an eternity to a brand-new company.

We want those people working on our problems so if we behave in such a way that it's catch-22 for them, we're not going to get there so we have to be more agile.  And I won't get into the technicalities of doing that, but the question ends by -- essentially by saying, but we realize you have to obey the law, which we do.

But -- and of course, you know, if not -- we're never going to have the latitude that a VC does because it's the taxpayers money and the taxpayer requires a level of transparency and fairness and everything that we have to provide.  But that doesn't mean we can't be fast and we can't be agile. 

And we're not going to keep up in a competitive world if it takes DOD two years to turn every circle.  Were -- people are going to outrun us, so we've got to get faster.  Good question.

 

Q:  So there's the other aspect of the actual military actions against ISIS and ISIL.  I believe the 101st Airborne Division is about to deploy troops to fight in Iraq, striking at the root of the terrorist organizations in Iraq and Syria. 

What's our strategy in this more traditional military campaign? Are there limits to the number of troops we'd be willing to deploy?  What's the time frame for you to direct military engagement?

SEC. CARTER:  The strategy in Iraq and Syria, you really can envision in a sense, in an old-fashioned kind of way, we're going to take back the territory that ISIL is now tyrannizing.  Now, we're going to help the people who live there to do it, so that's the strategic approach. 

And that's in simple recognition of the fact that after ISIL is defeated, in order for them to remain defeated, somebody has to govern and give people back a decent life.  That's not us.  But that doesn't mean we can't help them to regain that territory.

So, thinking in terms of a map, in Iraq, think we're working with the Iraqi Security Forces now.  We trained them.  We equipped them.  We help them.  And in answer to your question, are we going to do more? 

Yes, we're looking for opportunities to do more with the Iraqis cause we want them to move now from Ramadi, which they took, to (inaudible) up and eventually to Mosul, which is Iraq's second-largest city which is in the hands of ISIL and needs to be taken back and will be taken back as soon as we can accomplish that with the Iraqi Security Force.

I'm confident we'll do that.  But, you know, if you're thinking about old World War II maps, just think of an arrow going towards -- from Ramadi to Mosul and we're going to take it and we will be -- and what the 101st is doing is helping the Iraqi forces in exactly the way I said.

Lots of different ways to make them more effective and to do what we're so good at, which is bringing the great weight of American military power to power to bear in support of someone else who has taken territory in Iraq who has to live there.

 Over in Syria, things are more complicated, much more complicated because there's civil war going on.  We're not a party to the civil war but among other nasty things: refugees and so forth, the civil war, has given opportunity for ISIL there.  The key place there is Raqqa, which, if you never heard of it before, you have now because it's the place that ISIL claims is the capital of its caliphate.

And we can't have a state based upon an ideology like this and so Raqqa, like Mosul, needs to fall.   And it needs to fall at the hands of the people who live there.  And we're doing exactly that also.  In fact forces enabled by us just took the city of Shaddadi again.  Forgive me if you don't know all this geography.

Shaddadi is between Mosul and Raqqa.  And by taking Shaddadi we closed the last major road between Mosul and Raqqa, which means severing the parent tumor of the cancer of ISIL in half and isolating it in the Iraq side from the Syria side, which obviously has a totally different political context.

And then we need to make those cities fall.  Then it'll be clear to everyone that there's no such thing as a state based on ISIL -- and by the way, then we'd go on and we'd be doing other things around the world where this spreads to other cells and so forth and getting it elsewhere.

Again, with the people who live in these places, helping them to get control of our problem

Q:  What can be done to make sure we don't make similar mistakes to the prior Iraqi campaign.

SEC. CARTER:  Well, you know, first of all, we've got to deal with the situation as we find it.  And that's what I do there.  The reality is we've learned a lot in Iraq, Afghanistan over the last 15 years about how to combat a movement like ISIL.

We've learned a lot about counterterrorism.  We've learned a lot about counterinsurgency.  There's no military in the world better than ours at doing this.  And again, you have to think about it and when we send in forces that partner up with local forces.  And our presence the brings the enormous weight of our intelligence, air power, mobility, logistics, technology to bear on that situation.  That's a winning combination time and time again.  It takes patience and you -- you have to have the patience to work with local people, recognizing that if you're going to have a defeat that lasts, it needs to be sustained and needs to be sustained by them, so that's part of the strategic game.  But we can do it.  We've done it before.  We've got to do it in this case.

Q:  Is Russia a threat to the U.S. or a new partner in combating the emergence of the supposed caliphate of ISIS and ISIL?  How would you characterize our relationship?

SEC. CARTER:  Well, overall, Russia, you know -- and Gloria, you've worked a lot with the Russians as well over time.  I mean, the overall story is that sadly, from my point of view, Russia has in recent years wanted to, and they say this, turn back the clock to another time.  And I don't personally think that's good for the Russian people, but that's not my call to make.  It is the Russian leadership and that's the direction they seem to be going, and that's creating a lot of problems, first and foremost in Europe.

And I described very briefly what we're doing there, but there, we are having now for the first time in a quarter-century, Gloria , to revisit our playbook with NATO and make sure that we can deter and respond to any aggression by Russia, particularly on NATO territory, on the kind of thing we've seen in Ukraine.  And it's not just standard aggression.  You need to worry about that too, but it's the little green men phenomena called hybrid warfare.  So in Europe.

In Syria, the Russians have gotten off to a completely wrong footing.  They said they were coming to fight ISIL, that's not what they did.  They joined the Syrian civil war on Assad's side, which will have the effect of prolonging the civil war.  Where they could be helpful if they choose to be, but -- but haven't been yet is to persuade Assad to step aside, because remember, what we need is an end to this civil war.  We don't what the structures of the Syrian state to disintegrate.  Then there'd be nothing there. 

So Assad to step aside, the Syrians state to -- (inaudible) -- and the opposition -- the moderate opposition join in that to be the governance of the Syrians in the future.  That's the path we need to get on.  The Russians have a lot of influence with Assad, and so they could use it that way and then -- but that's not what they're doing.  So they said they were going to do one thing and are doing another.

Now, at the moment, they -- Secretary Kerry has reached agreement with them and -- and many other parties to the civil war to a cessation of hostilities.  That's not an end of the civil war, but it's a good thing.  It reduces the level of violence and -- as long as it's adhered to, and we'll have to watch that, and -- and allows humanitarian aid to flow to what is really a -- really a very sad situation.

Q:  Is there an Iran-like deal to be made with North Korea?

SEC. CARTER:  The -- it -- I mean, translate --

(Laughter.)

No, no.  I get it.  I get it exactly.  And the -- the -- once upon a time, North Korea was on the threshold or seemed to be headed in the direction of getting a nuclear weapon, and that is circumstance in which Iran -- we found Iran.  North Korea now, as you know from its underground testing and so forth, has a nuclear weapon.  So that's a much more difficult circumstance fundamentally in the technology sense to turn around. 

And also, of course, North Korea, as a number of us here have of us here have tried on and off over the years to deal with three generations of Kims successively, and that's pretty tough.  And so I don't hold that a lot of prospect for that.  Our principle -- our principle objective in the Department of Defense is the one I said, which is to deter aggression, make sure there aren't provocations and that North Korea recognizes that to start a war on the Korean Peninsula would result in the sure and rapid defeat of North Korea. 

But it's not a way anybody wants, and so the important thing is there is to stand tall.  And the years go on and on and we do this, as you well know, year after year on the DMZ and that -- and for now, that's what we're focused on.

Q:  The U.S. government is now planning a major modernization of our nuclear forces.  Many former defense and military leaders, for instance, Dr. Perry and Mr. Schultz, who we're honored to have both with us here today, have stated that for deterrence, the U.S. does not need anywhere near the number of nuclear weapons we have today.  So why is the U.S. embarking on the modernization?  What's your view, given your background on arms control, about the need and the cost of this modernization?

SEC. CARTER:  Well, I mean, I'd start with a basic proposition, which is that the nuclear arsenal of the United States is a foundational part of our security.  We all wish it weren't so and that, you know, 1945 hadn't happened and so forth, but it is what it is.  And -- so I do believe the United States needs a nuclear arsenal that is safe, secure and reliable.

Then you get down to the particulars of -- of how we deal with an aging arsenal so that it stays safe, secure and reliable.  The biggest thing that's going on right now and that we put in our budget is the beginning of the replacement of the Trident class submarine, our most survivable nuclear force.  We're beginning that -- that's going to be very expensive program, but it is, in my judgment, an essential program.

We're also beginning a new bomber, not principally for the nuclear mission, but it could also accomplish the nuclear mission.  We're -- we're doing it for other long-range strike purposes, but that too will -- will be part of tomorrow's nuclear posture and the weapons that go with that, including cruise missiles which are necessary for penetrating air defenses. 

And then the ICBMs are there.  They've been there for many years.  There will come a time in the future when the question and the cost of the recapitalization of the ICBMs comes up.

So these are things we're doing.  We're pursuing them in a measured way.  They're expensive, but it's an expense that I think we need to -- to bear and it is smaller than it was back in our time, and that's perfectly appropriate.  But the reality is that the United States needs to maintain a safe, secure and reliable nuclear arsenal.  That's my -- that's my view.

Q:  Time for our last question.  This is an audience question.  ISIS is not an existential threat to world order to all life on the planet, anthropogenic climate change is an existential threat to human civilization and the whole biosphere.  It's -- in the view of this questioner, it's the gravest security threat not only to the U.S. but the whole planet.  What are you doing to stop carbon emissions?

(Applause.)

SEC. CARTER:  Well, that's a good question.  It's a good question and it's a serious concern.  I think the question is what is the Department of Defense doing, per se.  We are a carbon emitter, not -- but not a driver of that.  We are doing things, both in the name of efficiency as well as carbon footprint, like everybody else is.   More efficient buildings, more efficient fuel and more efficient jet engines, which also have a greater thrust to weight and other things that are important to us from a military point of view.

But climate change does have strategic implications for us, so another question in addition to the question asked is what are you doing to adapt?  And how does that -- how is that affecting us?  We don't have a whole lot of effect on it, but it does have an effect on us. 

One thing it's doing is opening up the Arctic, which is already causing people to jockey in position.  And I was talking about freedom of navigation and I mentioned the South China Sea, which happens to be the place everybody's focused on today.  But don't forget that the reason to stick up for freedom of navigation is it's everywhere.  Straits of Hormuz, Arctic Ocean, Strait of Malacca, South China Sea.  All of that is an important part of the human future.

And we're seeing change -- climate change in the -- in the Arctic and it's having this strategic effect on us.  It also has an effect on sea levels, which will, particularly for Pacific Islanders and everything, have a material effect of them.  Patterns of climate affect human security because they cause people to move and famines to occur and things like that that have security implications.

What happens around the world does have -- change the general environment for security, so -- (inaudible).  It does have implications for us, very much.  We watch all that very closely, try to make adaptations where we can.

Q:  Before letting Dr. Carter go, I want to say that we are only as good as a country as the willingness of our brightest and most skilled citizen to dedicate themselves to public service.  This is a time when it requires personal sacrifice and some risk to do so, so I want to thank for you for over 30 years of dedicated, outstanding public service.

SEC. CARTER:  I appreciate you saying that.

(Applause.).

I thank you.  I appreciate your saying that.  I appreciate your saying -- I appreciate your saying that.  And thank -- thanks for -- I thought you were going to a different place, and that's the place I want to go, which is think of all these wonderful people who do this with -- I mean, I have 2.8 absolutely -- 2.8 million absolutely fantastic, talented, dedicated professionals.  They're what I wake up for every day.

And by the way, I talked a lot about partnership with industry.  I consider industry part of the team as well.  This is serious business and I always -- I tell these kids, you know, I go out and I talk to our young soldiers and I say, "Think about what you're doing.  You get to wake up every morning and be part of something bigger than yourself and give people the security that allows them to dream their dreams, raise their children, live their lives in peace."

It's a fantastic, noble thing for them to do and it's them, not me.  It's them that make ours the greatest military and our role in the world really a noble one.  I -- I sincerely believe that, but it's them.  I appreciate your saying that about me, but it -- but it's them.

STAFF:  Thanks to Dr. Ashton Carter, U.S. secretary of defense.

(Applause.).

We also thank you audiences here and on radio television and the internet.  Please, everyone, stay for a moment while Dr. Carter and his party leave the room.  I'm Gloria Duffy.  Now, this meeting of the Commonwealth Club of California is adjourned.  Thank you.

(Applause.)