Media Availability with Secretary Carter in San Francisco, California.

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SECRETARY OF DEFENSE ASH CARTER: ... got to see a little bit of the beginning of this, which was terrific. I could spend all day doing this. But you saw one of five new ventures out here, all of which through DIUX are now familiar – gotten familiar-- more familiar with our problems and our need for solutions.

There’s a wide range of things from unmanned surface vessels for the sea to ways of visualizing big data to methods of data security. I said this morning in a speech at the Commonwealth Club how important data security, including encryption, are to the Department of Defense, presentations on that.

But there's another thing about this which is another important aspect of what I'm trying to foster through DIUX and other things we're doing and as we iterate all of our approaches to building bridges between the technology sector and DoD, and that's the people.

And so what you saw in this room were some people who have an interest in, a taste for the challenge of protecting our society and making a better world and making everything that's out here and throughout our country, you know, wonderful, innovative, country that it is, making all that possible and that’s security.

So there are going to be some interesting products and inventions that these companies have, but there are also some tremendous people. And just between you and me, I hope we steal some of them and bring them in because you know that's one of my ambitions.

So anyway, thanks for coming. And questions.

STAFF: Yes, it's going to be tight, so (off mic) unless we go really quick. So let me go first to Bill.

SEC. CARTER: Bill.

Q: Hey, so based on your speech today, it seemed like you were -- you don't believe that the case against Apple is a very good one. And it seems to be that you might think that it could set a bad precedent. Is that a fair assessment? And how would like to see that...

SEC. CARTER: No, I -- to be clear, I didn't address that case at all. And I need to be very, very persnickety about that because it is in litigation. It's a law enforcement matter.

The point I made in the speech is we shouldn't let the solutions to this larger issue of how to handle data security as a society be driven by any one particular case. I think that's the important point here.

And this is a large set of issues. In fact, it's not just one. There’s the questions of data in motion, there’s questions of data at rest, there’s questions of data in the possession of different kinds of parties, there’s questions of data crossing borders.

And so there are lots of aspects to this overall question of data security in society. And the point I made this morning is--we can't let a -- it would be unreasonable to have one case of any kind drive an overall solution to this, which is a very complex problem, and which I believe can only be resolved by interacting between the public policy sector, of which I'm a part, and the private sector, which is one of the reasons why I'm out here.

STAFF: Aaron

Q: (off mic) (Laughter.)

Q: Okay. So in your speech you also talked about serious consequences for serious actions in regard to China. Can you talk about what those consequences are?

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SEC. CARTER: Well, I'll give you some examples from the past of ways we've -- there have already been consequences from that kind of behavior, Andrea, they are our own deployments to the region.

One of the reasons why it's so important to put our-- more of our military and some of our newest military in that region is precisely because of the kind of concerns that are generated by this sort of activity, especially by China, but there are other countries I should make clear that press claims and try to militarize features. But China by far and away the largest one.

The other thing, the other consequence that you see again every day is countries in the region coming to the United States to partner more closely with us. That's what the Maritime Security Initiative is about. That's a whole host of joint exercises, trilateral activities that would have been unthinkable years ago.

And they wouldn't have occurred outside of a climate of concern in a region where, you know, there has been peace and stability. There are lots of historic tensions, but there has been general peace and stability.

And last and just to get to things this week, there are consequences in our budget. I told you about some of the investments that we're making specifically because of this kind of concern.

So there's no question that there are consequences for this action. It would be better if it weren't that way. But it is.

Q: Were you considering doing additional actions though given the escalation that you've seen in the region—the placement of missiles and the fighter jets.

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SEC. CARTER: Well, we have all those plans in all three of those categories. And you'll see them unfolding, some of them you see in our budget.

STAFF: Sean

Q: Sean Lyngaas with Federal Computer Week. Hi.

In terms of DIUX, how are you going to measure progress? I mean, I could see a future defense secretary coming out here every year and speaking to innovation and what you're trying to do here. But how are going to measure how the tools are ending up in the defense...

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SEC. CARTER: Well, it's a good question. And I'm going to give you some of the answers that are in my mind. But that I really mean the X in experimental. We need to keep trying, iterate, see what works.

But part of it is products that we can use. Part of it is connections to technology that we would not otherwise have. But, and I meant this when I said a few minutes ago, an important part of it is people as well.

This is a way, in an era when the number of people that we have in our all-volunteer force, since we get to pick and choose them, is only a fraction of the younger age cohort.

Familiarizing a new generation and an innovative generation with the national security mission, and giving them a taste of it, and creating a possibility that they'll spend some of their lives, not necessarily their entire lives, but some of their lives contributing to our problems, that's valuable to me.

So if I get that kind of attention and that mindshare. So it's attention to our problems by the -- you know, one of the very most innovative communities in the world. It's people. It is-- It's going to rub off on our own people.

I expect that this will be like a mirror where we look at ourselves. I was asked this morning at the Commonwealth Club a question which was a very kind way of saying that government is a pretty hard place to work with.

Which is a very reasonable and very true point. We need to get better at that if we're going to connect with the future-- so there are lots of things that I hope are going to come out of here. And that's why I'm pressing DIUX, keep trying on things.

I'm listening to people giving me feedback, and everybody is. So it really is experimental. But there are lots of different ways it's going to pay off. I'm sure it will.

STAFF: Real quick, got time for one last one, Val?

Q: You heard from a variety of companies today who made their pitches. Can you talk about some of like the concrete next steps forward, whether that's pilot programs or linking them with the S&T community?

SEC. CARTER: Yeah, well, I think, I mean, the general answer is to connect them with those in-- who have our problem set, who could use their technology or their innovative ideas, or, they wouldn't like me to say this, but their people.

And there -- you know, we're a big place. So it's any part of the Department of Defense. And there are -- so they get to pick the kind of problems they want to work with the Navy, as obviously the guy who has the unmanned surface vehicle would want, that's good.

But there are lots of different parts of the Navy. And he also mentioned the Coast Guard, other parts of the -- that are also part of our national security system. So it's connecting them with them, or with others who work for us.

Because remember, a lot of work is not done in-house, it's done by contracting out. So some of these people can work with people who are already working with us on a problem to make the solutions better.

So introducing our problems to these bright people, that's what it's all about. And these were just examples of that. There are tremendous variety here, I mean, fantastic -- I could do this all day. And I'm sure you guys could too. It's endlessly fascinating.

But for me it's serious business because we want to be the best 10 years, 20 years, 30 years from now like we're the best now. And it's not a birthright. It's something we've got to work to keep-- competitive world out there.

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SEC. CARTER: All right, guys.