>> seriously, he found that one of your divisions have created 2 million fake account, had filed thousands of employees for improper behavior and had cheated death inside their customers that you did need than 12 hitter fire in ahead of her retirement?

>> backs, lots of deputy defense secretary robert work on the u.s. defense strategies focusing mainly on china and russia. he joined by the army chief of staff and the commander of u.s. pacific command. held by the reagan national defense form, this is a little more than an hour. >> welcome, everyone. it is a really amazing privilege to be here.

the reagan national defense form have extremely important questions to address today and to get to the first which i'll than that. it is who will win the army navy game next week. >> i think the nation will win. >> this is my 15th time on a panel -- 15 army navy game that we won. >> i tried to give and diplomatic out. there you go. any toledo friends out here? temple fans. >> the first annual army navy hockey game is being played following the caps-on monday night.

admiral carter is the superintendent of the naval academy will be coaching the navy seaman i will be coaching the army team as a prelude and fighting will be authorized. admiral carter is slap shot. >> yes, it is. we'll see. >> now that we've gotten these major affairs at a taken care of, it really is a privilege to be here at the foreign and with an amazingly distinguished panel. the personalities here are well known, but they start just briefly for my right. bob work is of course the deputy secretary of defense after a long career in the u.s. marine corps and a leading thinker of course on the future of competition. admiral harris is the commander of u.s. forces in the pacific.

general mark milley is the chief of staff of the u.s. army. mike strianese, ceo of l3 communications and jerry trina levin, ceo of dae systems inc. we've been asked to speak about the current era of the u.s. challenges and in a way that echoes the current offset. i suggest we are now in a third modern era of deterrence. if we say the first was the 1930s, which did not go well at all and deterring aggressive, adventurous behavior by nationstates. the second would have been the cold war which is generally seen as a success of nuclear deterrence although there were some exceptions around dean acheson and the korean war.

then we had the post 9/11 moments where he was questioned whether a classical principles of deterrence even applied dealing with non-nationstate actors and suicide terrorism. that brings us to today where we have returned to a third era of classical deterrence considerations. there are differences in the environment and capability to distinguish our air from the past with its nuclear bomb, cyberand otherwise. but it is anything helpful -- i find it helpful to look at that historical context and see the ways in which there are key difference with the cold war whereas that was a deterrence environment that looked overwhelmingly out one adversary in the soviet union. today the united states looks at a diversity of deterrence

challenges. we are speaking today chiefly about china and russia, but there's also iran and north korea. it seems that diversity requires also a diversity of deterrence approaches because one deterrence approach is unlikely to fit all. one way which i look forward in which the current environment is especially challenging it seems is china and russia can take our focus is are of course different countries, different governments, different editions, different histories, different things that motivate them, different vulnerabilities. anything that requires the united states of course to tailor its deterrence approaches and with a particular focus on different individuals who lead

the systems come at these political systems because to speak about capability alone in deterrence would run the risk of missing the personal and psychological aspects. just as different individuals are motivating differently and affairs of the heart or heart, they are also motivated differently in perceptions of risk and national interest and it seems that with kim jong boone and vladimir putin of course, it is important to look also to the individual personalities when we take these considerations into account. it's not just business. it is personal. and so i'm looking forward very much to speaking with all of us about the capabilities aspect in the personal one in the industrial one and others because we have an absolutely

first rate panel and it really is a privilege. i will open it up to all of us that the basic question of what is most important to understand and not to misunderstand about getting deterrence right given these rising powers in china and russia in particular. >> first of all, you heard the chairman saying you heard secretary carter say that essentially we have to address for state powers than one night stay problem. of those for state powers without question, china and russia are rising in the importance that the department of defense has focused his attention on. shanda schama defines a great power as a state, a large state that could take on the dominant state in the world, the united states conventionally and highly survivable nuclear deterrent. it's a very simple definition

for great power for the department of defense's first because it really focuses on capabilities. whether you agree to china and russia as a great power, by any definition they will cause the united states to expend a lot more strategic capital than it has in the last 25 years. both are very large nuclear powers. both are starting to really challenge is conventionally. as the chairman said, today are competitive advantages intact, but the trend lines are not all that encouraging so we want to take care of that. to a greater or lesser degree, disagree with the global orders the united states has been working so hard to build since world war ii. the russians believe they have been humiliated since the end of the cold war and china still smarts from the century of humiliation that tries so much of their thinking.

both are u.n. security council members said they could really causes problems even without taking us on militarily and both are especially and their near abroad. that means when i think of competition i think of it in terms of look, the west for some reason thinks the term competition isn't inherently negative term, which would lead inevitably to conflict. the russians and the chinese believe competition is just a natural state of affairs. within that competition, three things we have to have. we have to have strategic deterrence. we have to make sure we have that right. conventional deterrence. we have to make sure you have a competitive advantage on the conventional side so that the likelihood of a conventional attack or a conventional war with these two powers would be

minimized. the third thing is we have to manage the strategic competition on a day-to-day basis. i would argue to think of strategic deterrence at the top and conventional in the middle, managing this at the bottom, the length between the bottom to his crisis management in the length to the top to his escalation control. so the paradox that is not a unified. that only focuses on conventional deterrence within this comprehensive framework of comprehensive strategic stability. i look forward to the questions i'm not, but we have to get all three things right. managing the competition, conventional deterrence and strategic insurance. admiral harris. >> thanks. here we are in the reagan library and president reagan's dead that we can not be an instance of broad because there is no innocent abroad for something like that. i think that kind of lends itself to how i look at

deterrence. i've read all the theories, thomas schilling in all these other guys and it's pretty complicated stuff. more complicated than i'm used to particularly because i'm from the south if you can't tell already. i boil it down to my own idea of what is deterrence. you may deterrence is an equation and capability tensors ofttimes signaling about the times deterrence. if any of those things on the right-hand side, capability, resolve or signaling, if any of those are zero, you've got no deterrence. you can have the greatest resolve to use the threat, which we do. but if you don't have the signaling or signaling correctly, you've got returns. so that is nicer to idea of

deterrence. deterrence is in the eye of the beholder. so deterrence is about the person you are trying to deter and how that person for that country or entity views your capability results in signal. deterrence is in the eyes of the beholder and the last thing i'll say about deterrence from my perspective is that the military, the capability part of that equation, the military is only part of the equation. so deterrence is a little government and that's kind of where i fallout on deterrence. so as the secretary said, we are talking about china and russia, great powers and how we were inside the international system.

i look at it from my vantage point through a dark lines and everything we do is aimed at giving the national command authority the ability to manage that in a complex way. i look forward to your questions. >> general milley. >> i would again at go what he said and read quote peace through strength. same for his george washington used in a stairwell and not throw address. if you want to deter opponents you have to have the first part. but at the capability, capacity and size but also scales and readiness in the right type of capabilities. once you have those, you have the difference between the love for enemy and then you got to tell them that.

the baseline of the whole thing is you got to be strong to begin with. i think frankly our capabilities are exceptionally strong to be shared but they've atrophied over the last 15 years when it comes to the two adversaries the secretary was talking about, russia and china are significant state power. that's true in the army can assure in the air force as well. i won't speak for the navy except to say is true in the navy and marine corps, too. but it's true. we've been focused on a single type of war. insurgency, counterinsurgency and counterterrorism. we have sub optimized other parts of our force structure so this capability gaps that have emerged, we still have competitive advantage in the aggregate, but they are capability gaps that are clear, dangerous and closing fast and there's also proximity issues of the case of russia obviously the

ability to operate and so on and so forth to china is a different strategic situation as well. the bottom line as well as through the united states military is strong and very good and very capable and you're not going to hear anything different for me. let's be careful about beating our chest i'm not death. the world is a very serious place. there are some dangerous actors they are. those need to be deterred and there are currently in my view in the long scheme of things, there are significant threat in the international order that has been getting as a nation we need to come to grips with that and we want to continue that international order because it is under challenge by russia, china, north korea, iran and terrorists.

we have to come to grips with that and that means maintaining capabilities in order to assure our allies and adversaries. it is not in my mind a difficult science project. it is done through strength which is a combination of size and capability and we've got some work to do on that and the current leadership of the department of defense has acknowledged that and i think the future leadership will do the same. >> thank you on the general. >> thank you. start of the story is to restore some of the technological capability that seems to have eroded over the last decade or so and that is industry's job in partnership with our customers. the pentagon, something is made in the pentagon that are adversaries generally iranian state-owned companies were there's a lot worse the inflexibility and doing whatever

it is they need to do. we on the other hand are dealing with stakeholders, whether its shareholders and a host of others in a highly regulated environment. but before restoring the technology technology is going to involve the will to adequately fund budget from a terrible situation known as sequestration over the past seven, eight years that has done a lot of damage not only to the industry that we operate, but also to the perception that the u.s. willingness for seriousness about the technological advantage. it was always the object is to own the night. now we seem to be sharing the night and we need to get all those advantages back. the industry is very committed to that. just to quote a number how bad

over the last seven, eight years. as an industry we lost around 1.7 million employers. not only do we need to attract the workforce back so we are able to search again, but we need to get young people attracted into the stem programs so we can get the finest into this industry. one of the ways we are dealing with this has been some partnering with a very smart companies here in the west coast. we can bring some of those commercial practices into the aerospace and defense industry to get innovation and technology inserted into our products faster to help close the gap. that's part of what we're doing and how are looking at the problem. >> thank you. mr. demuro. >> industry's role is really to be the arsenal for military.

whatever the vision is and whatever the military needs essentially relies on a free market that we have in the united states on the aerospace and defense for the most part industry and for this industry to be healthy, our customer needs to be healthy. mike talked about a search into your budget and adequacy of budget and the certainly been problematic with her throughout the session and frankly all of us spend some time on the hill seeing bipartisan recognition that at a minimum there needs to be greater stability if not increases in the budget so we can get at some of these readiness issues as well as the bed and long-term equalizer trap where perhaps we've lost some ground. first and foremost i would say for industry to be able to help our customer and to help the mission of deterrence we will talk about, we need a stable budget that it needs to be

robust. the first at giving up the cap spears stable budget priorities can be established. our customer establishes the kind of initiatives mike talks about a very agile industry where we have streamlined the statistics show even the top five, top six since 2008 have reduced 14% to 15% and if you carry that you get to make spammers. we've demonstrated, hot the most advanced weapons in the world. i have every confidence that our customer can get stability and robust funding and making set priorities that collectively we can achieve and the second thing i would offer from several panels, one of them about reform or rebuild. it is both. congress was discussed by two members this morning that it

also has to recognize it has a role. we always focus on dod and say we have to streamline and get rid of regulations and people appeared dod is an organization that operates in an ecosystem that operate in a political and the legal framework in an ecosystem. congress has to understand and i say and the management of the process and reporting of the process. it has consequences. they have revised operating processes. whether it is 52 or 28 but the quality of that decision be any worse by getting 52 to 26. i don't know.

i don't have the answer. the regulatory regime affects the quality of decisions that would have gotten very transactional and our business and working contract by contract, regulation by regulation. the most recent rule without understanding the implications of that for industry. which operates in competitive capital markets as mike alluded to. and so, sometimes what we see are actions that have the reverse effect. instead of supporting the innovation was the third off that and providing capital to do that, describing human capital and financial capital of the need to carefully consider the ecosystem and not be as transactional. lastly i think we will have resources to work on this very difficult problems. it would behoove all of us if we

look at the export regime. our expert regulation regime. the interoperability gains that come in our alliance is when we share equipment and we have that interoperability, which we can bring those economies of scale back and assist in new technologies price reduction more effectively supporting our customer. >> thank you. admiral harris, i would like to circle back on the definition of deterrence you offered. you could afford this capability is, at times signaling. i've heard others but is similarly with the distinction capabilities times intense times belief.

that is belief in her other guy and a willingness to act. that gets the point you made about deterrence been in the eye of the beholder. i wonder if you comment on whether that's an important distinction between signaling which is about the way we act, the united states acts and belief, which is how the potential adversary calculates risk. if we could also speak about how that belief part of the equation works in china and russia today and how perhaps the belief of china and russia and u.s. deterrence compares today to a few years past. >> i think we are talking about the same thing in the sense that the believe of the deterred is affected by the signaling of a deterring power and the resolve and capability.

so the deterred power if you will is going to look at all of that. the deterred powers believe is ultimately going to determine the deterred powers action in the spectrum of conflict for no conflict that went into the other. i think we have been successful at the nation in deterring great powers, using the secretary's definition of a great power in terms of russia's actions on the global stage in china's actions on a global stage. and i would just say that we have to keep at it. we have to continue signaling part of that in order to effect their belief part of that, in order to continue to deter them in the great spaces if you will. >> let me add some of that.

we were on the 75th anniversary here come the japanese attack of pearl harbor are going out to celebrate that. before the japanese launched that attack, they need the capability of the united states and they knew they would lose the war. they knew that. they consciously made a strategic decision to attack when they knew they would lose a war. so they knew we would fight back and they believed it. but they still did it. history has several cases where countries under his did the opponent's capability. they understood that i had a will and they believed him and they still attacked. there are some other things to consider. things like mix of short wars. the japanese thought the war would be over to negotiate for police service fee.

and they thought that would be over in six weeks. we also were subject to that. we thought certain things would be pretty short and so on and so forth. it is not an exact science the whole idea of deterrence. it is a matter of judgment and it is something that is different in every single case. there is no uniform cookie-cutter stuff. it is different in every case. the one thing that is, and if you want to deter it is to maintain very, very strong and capable military forces. until such time as some sort of universal government or whatever, maybe some day, 200, 300 years from now, the world by definition is an arctic so there is no overarching force that can run the world so to speak. absent that, you've got to

maintain very strong large forces in order to deterred. >> if i could say something, david, use the word intent. harry used the word resolve. i like the word resolve better. it's the capabilities to bring to the table plus the signaling of what you can and can not tolerate and the resolve we show. the strategic competition with china and russia is our national strategy, dozens of allies and what the president has said, every president since world war ii, article v commitments are ironclad. there maybe other areas that we decide what we must do, but in the terms of article v commitments, i don't think anybody and russia or china doubts i resolve to nato and to our allies and with specific.

i think that is a very, very big help for deterrence against both of these great powers. >> thank you for the question on resolve and intend. i didn't mean to the words into the admiral situation there. if i could ask more on how china and russia look at the u.s. in a deterrence balance in what your belief is in the u.s. capabilities times resolve, how do you assess that their views on our standing compares today to years past and the russian case of course the 2008 deutsche episode crania in 2014. the u.k. generally people speak about in china, similarly the last few years some unprecedented moves and east china sea certainly presents

growing and growing. how do you understand the chinese and russian you at the united states resolve today compared to let say 10 years ago. >> well, i know for certain the chinese conception demonstrates capabilities. i know for certain they are both trying to copy and duplicate our love with joint nasa. i know that they are trying to gain technological parity. at this point in time, i am confident russia and china believe that the united states has the chairman stated has a competitive advantage. they may be looking at the trendlines and we're we're looking at the trendline and trying to make judgments on how to make sure that american overmatch remain. but at today i be the day do believe and i resolve for article v commitments to our allies and i do believe today we

have an advantage. the irony is that it's forcing them to put a lot of money into capabilities. the trend lines are what i think concerned the department of defense. how do we make sure the trend lines at the end of 10 years still have them thinking we have a competitive advantage. >> if we could step back and look in a strategic sense about china and russia, what would we say they are goals are? you mentioned in your opening remarks to what extent are they impatient powers? under their economic and political another's circumstances shaped their strategic thinking and what should that mean for u.s. deterrence strategy. what are the timetables we think

the chinese and russians look to for achieving their goals. why don't we start here. >> i would defer first two harry. he's been thinking about this for a long time and the china strategic initiative in 2008 we really are trying to understand and achieve by now, although he worries about providing forces in pacific and europe, he's been thinking a lot about the european problem. i'd probably ask him first in the military if what their judgment has. >> so i've spoken before about china and we typically attribute patients to china. but i've spoken about china is becoming a nation in a hurry. president she has become a man and a hurry where they tried of rappers ramp-up development and

their aggressive actions in east asia in a hurry. i've testified before congress and i believe china seeks hegemony in east asia and their views to push the united states now. that is where those military capabilities that we have come into play and not as where the whole of government view on deterrence comes into play. i think that the united states enjoys certain asymmetric advantages over every country on earth that would challenge us. those asymmetric advantages include anti-sibling warfare, cell technology, jet propulsion or culture of innovation and our ideas. but those hardware aspects of those asymmetric advantages are at risk if we don't continue to invest in them.

china is trying to overcome that asymmetric advantage gap that we enjoy quickly. they do that through cybertheft and everything else because they are not constrained by regulations and policy as we rightfully are. so we have to continue to be aware of the threat that is posed by a closing of the gas. the chairman talked about today that we don't want to go into a fair fight with our enemies are adversaries. you know, i've said before i want to go to a knife fight with a guy in a gunfight with every artillery and all of that. >> as well, why china in the and a hurry? >> i just look at the outcomes and they are moving swiftly and they seem to have put aside any

sense of strategic patients? >> they said a couple thousand years ago to tell the truth that wars are caused by fear to be a private interest. there's other reasons, but those three get to the heart of the matter and i think in both china and russia and many other cases, fear plays a big part in russia's case. they have living memory. so people sitting around dinner tables on the leaders of the sons and daughters have living memory and that was brutal. the united states experiences both my parents fought world war ii. they suffered, that the united states does not suffer like eastern europe and russia did in world war ii. the son of survivors leningrad

were people within 900 plus day siege. people need to think about that and remember that, that was russia went through in world war ii. fear is very real and not as their time i'm aware of in terms of the conditions. napoleon, moscow and doing everything that you see a sister in today. they were doing the same thing. so fear of extras on beijing is a very real, palpable married to and it's not fake. they believe it. they fear it and a view of nato rightly or wrongly. i think wrongly. but they think nato is an existential threat. fear is driving some of their behavior and their political leadership obviously believes it themselves but also exploit the internal political gain. what are they trying to do? they want to defend the russian

people and the russian sort of thing. in their mind, ukraine as part and parcel and t. have of course is the capital of russia in the year 1000 sort of thing. i believe it is very real and their mind. rush was a great power starting all the way up until the fall of the roman dionysian revolution. there is a great power, colonial power with a great empire and of course then the russian revolution becomes a power and its own right by making the greatest contribution to defeat germany and later becomes a soviet union as a superpower during the cold war. all of that came shattering down between 89 and 91 for many reasons that it shattered.

put himself called it the greatest catastrophe. that is something that ripped apart the self-esteem and pride of the country that have been set propaganda. so groups apart their pride. they regained the russian nationalist pride in themselves. and then there's a lot of interest in all. the least amount of money and so one is so forth. those are pretty significant with the russians and that is translated into behavior. along comes a guy, gets guy, get some guy, get some of our scott takes his shirt off. i will lead you to and i will take care of your fear. trust me and i'll be the strong man. it's been done thousands of times in history. so they rally around the flag and they modernize, reform and rebuild their military while we

are involved in a campaign in iraq and afghanistan. and then their behavior follows to the attacks on georgia, crimea, ukraine, threatening and intimidating the baltic states. you see what they've done in the area. they want to be on the same playing field. so if we want to deter that kind of further behavior, further aggression, that will require significant strengths. china for a bit different, but essentially the same in my mind. they've published it by the way. there is no great supersecret. they published it in a 2049 and they want them out of the western pacific and east asia and they want to be the regional hegemon in that region of the world. they would prefer to do it peacefully. they want the united states to peacefully retrench and be the dominant power at least asia as they have been for five millennia. the only exception has been what

they call their century of humiliation between the opium wars of 1840s and the chinese communist revolution of 1849. so they want to restore what they think is their rightful place in the world. they are on a roll since 1979 in their economy fall in economic shifts in power like that, military shifts in power have been. that is what we are seeing. modernization chinese military's incredible and fast. they want to do it peacefully, but they are preparing to do it laterally if they need to. so again, if you want to deter, it's a lot of diplomatic signaling, but that they find a deterrent is a strong capable military in both cases. >> the only thing i would like to add, david, is the chairman said a lot of people i hope they

understand what he's saying. this is why we deterred russia and china conventionally. he calls it adversarial competition below the threshold of military action and the russians are expert at anything but the russians and the chinese are investing a lot of effort trying to break our alliance is because both in europe and in asia. so the adversarial competition below the threshold of military action goes back to what harry was saying how important this is for our government to really have a strong strategy on how to approach and defend -- approaching deterred the big powers. >> i'd be interested to have you expand on your remarks about the differences are the similarities between the american defense industry and its relationship to

innovation and to government and the russian and chinese cases. how do they compare and how they work and organize and how they look to create capable platforms. >> share. i think right damage first of all is the great people we have that work with our industry in terms of their capabilities. but there is a lot less impediment for an entity to in any way it means to achieve its give and the object is they're both the same. whereas we need to create a gps demand environment and we wanted six months than we do everything we need to do than make it happen. if they get to companies or five companies, that's what they do. they are able to control resources, the ways and means of production to achieve their bids, whereas in our system they should know many of us are

publicly and companies than they have shareholders and when things don't go well, you have shareholders then you have acted this and it's a very dicey environment. so you know, we are all very aware of our hermit. we know how to work through it, so it's not the end of the world. but i think they can get things done a little bit quicker when they need to. our job is going to be how we count, how we develop technologies, weapons systems and the like that can operate in the environment. the great u.s. force projections in the carrier group we all understand the chinese have developed missiles that negate the carrier groups. we keep them so sure that the effect this has been somewhat impact did. >> i would challenge that. >> i'm just repeating what i

read. in any event, the point is there's been challenges made over the last eight years in places where the u.s. has a perceived technological advantage, whether it's going after self-development radars or long-range missiles and the flight. i think we need to respond in time for industry and work with our customers and, the system double offset those capabilities to benefit with the cyberand you panel earlier this cyberis become a terrible problem and it keeps happening over and over again and there needs to be a solution at hand right now is something that's going to have to get out with. we as an industry can't drop everything and focus on one problem. we have multiple customers and other applications with the model doesn't work as fast at

times. >> is finite, i would offer may be to expand on bikes point, we are looking at eight, nine, 10 year timeframe where we've had two particular adversaries who have been very focused in what they are trying to address, with the threat is, what they want to accomplish technically for structure, it better, et cetera as the secretary, admiral and general has said, we've been emerged in another activities, not the least of which is a huge downturn in the economy that's the economy that caused other constraints on the system, financial and political and i have every confidence that has happened before in our industry, most of the great discoveries are here. the fundamental reason is the free market enterprise system that we have drives innovation, drives incentives so we need to focus on those things that will

allow us to establish priorities and a reasonable planning horizon to stay with them and the regulatory regime that facilitates rather than tricks that innovation and just as we do in the pharmaceutical industry, all the way through financial instruments created with credit default swaps, those kind of things, that kind of free-market approach when you provide the right environment and the right reinforcement is tremendously powerful and will be again. i think that is what we are arguing for things like the third offset in those initiatives, like institutionalized in the budget process so we can really drive to whatever priorities, the long-term budget. whatever those four, five, six critical things are. there are many things we just need to set fundamentalists in place and let this model work.

>> before we open up in a few minutes, i would like all of us to weigh in on aspects of predictability and unpredictability and deterrence. when we look in the asia pacific and in europe, we see article v covers the nato countries. it covers japan as president obama clarified two years ago. the u.s. has a mutual sense treaty with the philippines but has not clarified the holdings in the south china sea islands are necessarily covered by that. there is some ambiguity there with taiwan. there is no treaty of course. there is a taiwan relations act that connects the u.s. to the defense of taiwan. in europe, it is well known the baltics of course within nato. moldova and other countries are outside of any article v

commitment. how did these issues affect the deterrence calculus and what is the rule of predictability and unpredictability for good or for ill and establishing deterrence against revisionist powers and you can leave aside surprise phone calls to taiwan if you want, which is an unpredictable move that surprised us all.

trying to deter and understand the signals and how you demonstrate resolve. within the context of the third offset even just on conventional capabilities we have the same, we will reveal capabilities for deterrence and we will conceal capabilities for war fighting advantage. we want both russian and chinese military planners wondering what type of capabilities that america could bring to bear, if god forbid, we ever got into a military confrontation. so ambiguity is useful in some cases but it's not universal. and sometimes clarity is very, very, very needed. but it is certainly something we want in our arsenal of deterrence. >> if i could ask the general question about predictability and unpredictability and also a related deterrence question about the differences between

deterrence and provocation. if you want to touch on freedom of navigation patrols in the south china sea. >> sure. so on the issue of the predictability and unpredictability, there are advantages to being both predictable and certain substances unpredictable than others. as far as our treaty allies go, the united states has only five treaties and they're all in the asia-pacific region. the other two definitions are multilateral. our treaty allies in asia should not worry about america's commitments under those treaties. and those are treaties with japan, korea, thailand, australia and the philippines.

they should not be concerned about our resolve in meeting our treaty obligations. i think the president clearly signaled, for example, he clearly signaled where we stand as a nation with regard to our treaty with japan over the issue of secaucus and the fact that secaucus fall under the provisions of the security agreement with japan. i think that was a clear signaling to china and had a deterrent effect. with regard to freedom of navigation operations and the like, and each of deterrence and provocations. freedom of navigation operations are not designed to deter anybody from doing anything. freedom of navigation operations are simply designed to do just that. they are designed to exercise our nations freedom of navigation in international water or over it, in

international airspace. and so if you don't exercise your freedom of navigation, then under international law you might lose that freedom of navigation over whatever issue it is the secretary of defense has been very clear that united states will fly, sale and operate wherever international law allows. that means we must exercise that freedom to fly, sale or operate wherever international law allows. that's the purpose of international operations. so good to exercise our right to operate wherever international law allows. >> general milley? >> i agree with both about sometimes ambiguity is good. sometimes be clear is good and all accounts that suspicion of the tuscola rate of operational. but at the strategic level i think clearly is more helpful and lack of clarity. i think a question that needs to be asked and answered right now

is what's america's role in the world. general dunford was asked at lunch if you had a magic wand what would you ask for? that's how we entered vikki said i would like consensus as to our role in the world. why is that so important? because some answer to the question what's america's role in the world derives all kinds of things like sizes of your forces and capabilities and so on and so forth. it's a critical question. it's been answered for seven decades. it was answered in 1944 any hotel in new hampshire in bretton woods when we just suffered 100 million dead between 1914-1945 in the first and second world wars. the united states said that's not happening again. we are not doing that. so we gathered everybody at that new hampshire hotels come all the diplomats and everybody hung out for a couple three weeks and they all wrote paragraphs and chapters to essentially the rules of the world. i was post-world war ii going to

be run? we're not doing this again. we just did it twice. we wrote the rules. american wrote those rules. all the other diplomats from all the other countries signed up to them but america wrote it. those rules were the rules of the quote free world, the western world up until 1989 and then expanded essentially to the rest of the world. some people don't like those rules. some people don't like that quote international order and want to revise it. revisionist power. so the question that we have asked and answered to ourselves as it relates to deterrent or anything else is doing like those rules? are we comfortable with them? do we want to keep them? if the answer to that question is yes, that's a really expensive opposition. we are going to have the capabilities and the forces to enforce those rules. you have to have the will, the posture, the the presence, capacity, all of it if you like those rules.

if you don't like those rules and you are okay with somebody else writing the rules, that's okay. that's a national decision. it's not asked and answered by the military. it's asked and answered by presidents, senators and congressmen, by the people of america. that needs to be asked and answered because from now to figure out what it is you're willing to fight for. we made this mistake before. the end of world war i, britain it wa wasn't the enforcement ofe rules, was laid waste and the united states backed away, didn't step into the breach and you got what you got in the '20s and 30s and it end up in world war ii. then we got it again post-world war ii when dean acheson comes out and says nope, sout south ka is not important. thank you very much. and then grandfather calls a stall of excess green, roger greenblatt, go. whom, you have the korea koreanr unenhanced entryman jumps in. started again when she tells

sedan weight is not that important. roger that, greenlight, go. boom. signaling and being consistent at the tedious level matters and knowing what you're willing to fight for, knowing what you stand for, nor what your role in the world is, that's fundamental to deterrent. it's fundamental to our military, and i personally think we need to ask and answer it, clarify it. normally that happens every four years in american politics. we have been answering it one way for seven decades. we need to answer it again now. i think it will be answered and think we'll be in good shape once it is entered. >> what about predictability and unpredictability in procurement, budgeting, r&d? and also what about some surprises we've seen in recent years, procurement difficulties with major platforms coming online, the f-35 and others, major systems, how does that affect deterrent? >> the predictability of budgets we think is central to being able to execute what we need to

do and in an effective and efficient manner. allows us to retire mac to hire and retain the people we need and it will actually show future workforces that it's stable industry to come to work in, not one that will experience layoffs every few years because of contracting budgets, depending on who's in office at the time. i also think that in and of itself it will fund the military objectives is a deterrent. so one come and makes this more predictable and makes it more efficient. and in terms of the systems proprietary data, if you will, i think companies have addressed that risk in many different ways, but we seem to be able to come if that means it doesn't reside on a network a logger, every site in in a safe somewhere, for now that's what it will have to be. but the crown jewels are not going to be exposed on global network systems as far as i can

see. -- vulnerable network systems. that's how most companies are dealing with it right now. >> as we talked about, predictability from the strategic level through the budget provides stability in the industrial base here if you don't have that, it undermines the induction base and the ability to come back and do what needs to be done. it undermines the will to invest. there are four things we can do with earnings, invest in capital, we can invest in r&d or bmp. we can give dividends or buy back stock or we seen a lot of latitude and i would argue with the lack of stability, lack of predictability. it's a function of that. it's not come or is a factor in that. it's not the determining factor. lastly, the back to the point mike made. we in industry over the last 10 years have come to appreciate even more obligation in the cyber domain.

we always talk about we are part of that battle. we are part of the defense infrastructure. we are working very hard, collaboratively with the intelligence agencies and the defense infrastructure to do everything possible to protect those assets. >> let's now open it up. we have microphones, at least one here. if questioners can identify themselves and try to ornament their comments with a question mark at the end. >> admiral harris, my name is stephen perry. how concerned are you about china's self manufactured naval base in the islands? what, if anything, can we do about it? have they perhaps effectively deterred the west through their strong resolve and strong signaling? >> thanks for the question. it's great.

i'll answer it quickly to give opportunities for other questions. i think a lot about the islands and i think they have built 70 bases. i don't think of them as islets anymore. i think of them as military bases in the south china sea. three of them have runways of about 10,000-foot length. we now have, i have two now as a military commander think about those bases. i do not think they have deterred us at all. i think those bases are, you know come in a conflict scenario then given a seven additional targets, if you know what i mean. [laughter] but they have, as i said in opportunities in the past, a continuing buildout of chinese capabilities in the south china sea will give them the ability to control the south china sea in over $5 trillion worth of trade that travels through the south china sea including

1,000,000,000,000 dollars that involves the united states annually. it will give them the means of controlling the south china sea against any scenario short of war with the united states, which no one wants, including us. we have to continue to work with john on that, and our friends, allies and partners in the region to reassure them so that we continue to build credible combat power and we built a network of like-minded friends, allies and partners to ensure that we fly, sail and operate wherever international law allows spirit let's take at least four question together, and please keep them break. >> eighty. john harper with national defense magazine. i thought i'd ask you about -- for the military officials, have you seen any tangible benefits on this initiative yet? to the members of industry, how do you view this? do you see it as a positive thing or deceit is commercial companies having an unfair advantage with this fast-track acquisition tool? >> i was out there just a few

weeks ago. in fact, to check on exactly what you just ask, tangible benefit. frankly, candidly, it's a bit a bit early entrance of tangible benefit. it has him and stood up a very long. isn't the kind of stuff you sprinkle magic dust on. these guys haven't been in operation for all that long. i think it's a very good idea. i think there's some tweaks to it. i've provided some of that feedback back to the department of defense that it's a good idea to be sustained and there's good initiative. because we need to accentuate and accelerate innovation for the applications of commercial products out there for the military. there's no question in my mind. but let's give them a little space, give them some running room before we start grading them out. >> i would only add, anything that sparks innovation and brings new thought to the problems that we're trying to

solve, we would welcome. the airspace in defense industry doesn't create a lot of the technology. it integrates and applies that technology, whether its automation automation or whatever it is. as the joe said i think stimulating more people to come into the industry can't be anything but good -- as the general said. >> sidney friedenberg, breaking defense. question, both the four stars might have a thought on this but particularly for deputy secretary work. you've put a lot of energy into the strategy, and i remember you telling me about a year ago that your hope was to set up options for the next administration to choose from. at this stage how comfortable are you that there's been time to set up good options and hand

them over to the next administration, probably a more turbulent transition than most? >> thank you. we need to write a two minute drill, so if we can get the other two questions quickly and we will answer them as best we can. >> i'm a student at columbia university. i question is primarily for admiral harris although general milley hi expertise is also appreciated. how realistic dvd and asian equivalent of nato, it is good for now but could the united states reassert itself through a acr in order to leverage the regional politics? >> i'm a junior at university and in it with the alexander hamilton society. my question is this seems to be a growing concern and skepticism among american people on an active as a foreign-policy.

looking at that resistance among americans, adverse powers especially russia and to an extent iran seem to be exploiting that in their aggressions. would you say that the specific assessment, and how would, how could this be resolved? >> secretary work on the transition? >> sidney, look, the third offset, you heard the chairman say lunch, this is all about guide to making our conventional competitive advantage and whatever you call it. that's what it is all about. what we have right now is meaning many demonstrations that are late into the budget. we are talking about a $3 trillion program, about 600 billion a year times five. it's a 3,000,000,000,000 dollars program. we had about $20 billion that his leg and right now for a lot of different demonstrations but the incoming administration can elect to either pursue or not.

take us back to what general milley said about the program. there's an awful lot of things going on right now. we are seeding a lot of innovative approaches. and back to jacob, i'll skip over the ttp and the asian equivalent of nato and i will leave that to harry, but look, i don't think the data shows the american people are resistant to an activist policy. i think, going back to general milley his point, because we have to have the debate of american role in the world, and anything can reckon people take part in that debate and tell us but but i don't think, i think e date is next on whether or not there's any indication that the american people want to be, less active. they want to know what we stand for and what we're going back this way, who do we want to deter, who do we want to have

sls, who will be protected, all those questions need to be answered. i know we're running overtime limit to say something. as far as a deterrent to goes, this is is what i think the russians and the chinese military planners worry about most, the american soldier, sailor, airman, arming and coast guardsmen here there is no other military, none, not in history of our planet that is as innovative as these people. and if i was the chinese or military -- russian military planner and saint wow, i think it's time to take on americans, sooner or later the model will freeze up because some young americans is going to say hey, why do we do it this way? they will whisper something into general milley said here and admiral harris is here and they will say yeah, let's do that. because it will ruin their day. so look, i've got to tell you,

rest assured. [applause] >> admiral, closes out. >> i want to talk about nato and asia. i will add to what the secondary said, and that is the other thing that scares our potential adversaries and their adversaries is the fact we are having this kind of a form because we are a questioning society, a questioning nation. i just can imagine this this kind of a venue where you have military, civilian and industry leaders together answering whatever questions come up in the ways that we are trying to do for all of you. so i think that's the other thing i think scares them quite a bit. i do not believe we are ever going to see and nato in asia. nato was formed when i was a single focus at the soviet union and those countries that were aligned with the soviet union, lined up against those that were not and we formed up nato are all the right reasons. in asia, there's not that

compelling single focused in the me quote-unquote will. china is part and parcel of asia. asia. they are part of our economic life in america and all that. so we are not to see, in my opinion, and nato in asia. we will see multilateral frameworks. i call it partnerships with the purpose. we have defending northeast asia, so that's a natural trilateral language between japan, korea and the united states. there's a countering violent extremist organizations in south east and south asia. and natural grouping of that would be the us, malaysia, indonesia, australia, new zealand and maybe bangladesh, certainly the philippines. so we should be going after these kinds of naturally forming multilateral organizations to get to those advantages. then we have axion which exist

not as a defense back between those countries that are part of aussie on but they're interested in security things. you have a dimm plus, and those things which i think are useful to go after transnational crime, piracy, the kidnapping-for-ransom and all those issues that we see in the strait of malacca and other places. that's how i view multilateral defense structures come if you will come in asia. thank you. >> thank you, gentlemen. thank you to the reagan foundation, and thanks to all of you. [applause] >> all this week with congress not in session where showing you booktv programming in prime

time. >> booktv tonight and all this week starting at 8 p.m. eastern on c-span2. and on c-span3 it's american history tv in prime time with programs on world war ii. we will begin at a eastern with a discussion on spy sent codebreakers. see it on c-span3. >> this week on c-span in prime time, tonight at eight eastern a review of house and senate

hearings on 2016 2016, topics including the flint, michigan, water crisis and the wells fargo unauthorized account scandal. >> seriously? you found out that one either divisions had created 2 million fake accounts, had fired thousands of employees for improper behavior and had cheated thousands of your own customers and you didn't even once consider firing her i headed for retirement? >> thursday at 8 p.m. eastern we remember some of the political figures that passed away in 2016, including former first lady nancy reagan, supreme court justice antonin scalia, and friday night at eight hour in the more your program continues with shimon peres, muhammad ali and senator and astronaut john glenn. this week in prime time on c-span. >> new year's night on q&a -- >> while people were starving, van buren was having these fancy

parties in the why does. it was part of the image making where harrison was the candidate poor man for the poor people, and he was this rich man in washington sneering at the poor people. harrison had thousands of acres and an estate so he was a very wealthy man but he was portrayed as the champion of the poor. when it came to the parades and the way take a chance. some gave speeches. some wrote pamphlets and was very shocking. they were criticized by the democrats who said these women should be home making pudding. >> ronald shafer, sunday night at eight eastern on c-span's q&a. >> next a look at diversity and silicon valley technology companies in the future of online gaming. this was held at the annual techcrunch disrupt san francisco

conference. it's 45 minutes. [inaudible conversations] ladies and gentlemen, please welcome back techcrunch senior writer jordan crook ♪ ♪ ♪ >> i appreciate you. what's your name? sam. you are my new favorite. hold onto that. take it with you to the bank. we are going to roll right into our next panel who here uses black? i've got a little special treat for you. if you type in -- tried a few times. you would get yours truly in your feed and that's a precious gift. lee's welcome to the state are r next panelists, leslie miley from slack and her moderator

jonathan shieber. [applause] >> this is the best intro music ever. >> isn't it amazing? >> i would love. i want to do this all a time. >> this should be the subject of my life. >> with so much to talk about. thank you for being here. >> thank you for having me speak that was a tepid response. can we raise the roof? [applause] >> this conversation is going to be amazing. leslie looks like it is a terrible headache, probably brought on by silicon valley but wilwe'll talk about that in a b. first question, because you are one of the seniormost developer guys ever there, why can't i do threaded conversations on slack? why? >> why? it's a good question. it's a hard problem to solve.

as we tried to do x like everything is done with craftsmanship so it takes time, effort, and these are things were working on. >> can you give me a tiny? >> can't give you a tonic. hopefully you will still have hair when it comes out. >> 2017? my hair isn't going anywhere. >> unfortnuately, this is all -- >> so what about box? bots have been the hot things for now for the past year. where do you fall on the bots spectrum. what role with a play within slack? >> i don't know if i can say what role they will play. there is definitely a technology we like to use your we want people to get used to using. we've done some experiments and seeing how people are very accepting of the suggestions, very desperate slack box giving them suggestions and will continue to experiment in that. we will probably roll something

out in the near future with the bots but it's definitely a way for people to learn more. there's a great bot called intro bot. not showing for anyone, just think it's a grateful for peope who join a new team for them to figure to the er, where they came from, what their interests are. i think you'll see more and more about. >> this is just the obligatory questioning. where i throw a bunch of buzzwords at you about things that are hot in check right now to make you respond. i apologize for that. what about ai speak with what about ai quirks when it really works i think will be use it. it's still not quite there yet. no one wants to unleash skynet on them. so when we get a little bit better -- >> visibly going to be this robot overlord future where skynet takes over everything and we all just slaves to machines? >> we kind of art. you were asking where your phone was before he came on stage.

>> that was more to connect with his fight audience because i want to give them a chance to ask you questions through the whole magic of twitter. twitter. although they kind of slack me too. spirit we should probably have one. >> maybe next year. things to think about our techcrunch disrupt 2017. ai is tricky. it's a hard thing. you say it's not quite there yet. people are trying to recruit talent, and there's only a selected group or hypothetically, there's only a select group of people one can pull from for this talent there is that hypothesis correct, or can you find great ai engineers across the country quirks when would you look for great ai engineers? >> wow, that's a good question. i i would just look around. i mean, just look around. look around the room. i'm sure there's someone here right now. i think where i would look is

any place that's doing that type of work work, right? it's not just confined to mit or stanford or cal. it's happening in detroit with what the auto manufacturers are doing, happening in richmond, virginia, with what capital one is doing for credit cards. it's happening with u.s. government in washington, d.c. within s seven everything were doing. so you can start looking everywhere for great talent like that. >> where are you at slack looking for talent right now? what's on your agenda? >> i will speak for me. i cannot speak for everyone at slack but i think we look for people who can essentially good at what they do, who are good programmers from an intimate perspective. we give everyone a coding -- i hate saying coding exercise. it's something that's graded blindly. we don't know who they are. the greater don't know where

they went to school. the waiters don't know if they went to school, if they are men or women or other. they just know that they did this exercise and we grade them and then if they do fairly well and that, based upon the ranking in a internal ranking system we have a conversation with them and bring them in. >> that's the way that slack has privileged diversity on one level. and has managed to greet one of the more diverse workforces in the valley. i think intact in general. there's also a geographic diversity, and i wonder if you u are looking to expand that at all? are the places where you would go at slack to try to recruit new talent or open new facilities to get things done? >> just softball that went to me, didn't you? >> a tough one, they are coming. >> definitely would look all over the country for talent. just not silicon valley but i think i just had somebody start who was coming from tennessee.

as if, since you softball the question to me we are opening up a facility in the most diversity city in north america. before anybody try to pick up what that is, it's actually toronto. toronto candidate has one of the most diverse populations in the world. 47% of the population is foreign-born. it's an amazing city. we are partly a canadian company. stewart butterfield is canadian. it makes a lot of sense to a presence there as well. >> how important to the company is something like economic, like diversification, socioeconomic sort of privileging? when i think of toronto i don't think that as a city that is struggling economically financially. this is just a nod to the diversity of the city itself, is that why you all are setting up camp there? >> at the end of the day we are a business and we have to look

rental places where we think we can have the best business climate in order to grow. economic diversity is as important as any other diversity. look around this country and you can tell there are cities have been totally left out of the tech ecosystem. what i like to be in other cities in the united states, like detroit, richmond, nashville? of course. i think in the future we can look to do that but right now we chose toronto. >> i was watching an interview you did with the guys that, i guess a a couple months ago, a couple weeks ago, and you talked about the ways in which oakland is changing. you kind of had some harsh words for what's going on in oakland, and i'm wondering if that, if, you know, know, there are ways to do economic diversification poorly always to go into an urban environment and not do it right and that's what you saw in your experience when you went back to oakland or is there

something else going on? >> you look, we are in san francisco, so let's talk about san francisco, which is a really good example. you look at the midmarket area of where twitter is, where several companies, where square is, where uber is, and you, and you see there's increasing economic activity but actually at the height in at it is really left people at the low end out. that area hasn't changed as much as he could. not to blame san francisco, but that was not done as well as it could. >> if you want to blame san francisco, by all means, go ahead. >> you have great companies that are no restaurants but it's serving the demographic that is not the demographic that's been living in those areas for decades. the same thing in oakland. i think we intact have a great opportunity to do more than just moving and justify. we can be part of the solution. we can actually engaged the neighborhood, help people like a

rising tide lifts all boats, we can raise everyon are going up. we need to do it more from i think from how do we keep people in this neighborhood into good paying jobs? how to improve the economic condition, not kindly give their schools computer or open up thea place where people can go play? that great but you would have to raise the entire neighborhood of economically. >> youth said silicon valley is hostile, actively hostile to diversity. how has that not affected the way that things work at slack? is that this blind sort of admission test that you do upfront, or has it affected slack i think it's that pic also into the intentionality that people at slack from stewart to adorn alsace. we have conversations at slack i've never had any other place about how we're doing hiring and who we are hiring and why we are hiring them. we don't take things like where

you went to school into consideration. we could care less if you went to cal, stanford, mit or if he went to san luis state or the university of miami, we don't care. this is been great in silicon valley. we want graduates from the schools. we don't care about that. i think that is been a huge part. what's also been huge part is once you start at a very early age and very early development in your company it makes it easier because you're not starting from way back. they spoke, google, twitter, thousands of employees and edges so far behind. and they all have reputations. people walk in and they don't see anybody who looks like them. why would they want to work there? >> so how does one solve that problem? i would think because things are so woefully bad in silicon, and they really are particular cut the diversity numbers from any of the top tech companies out here, it's really bad. when you look across the what

happened in the american education system, if you look what happened to american manufacturing, there were people put in place quotas and that managed to change the game in these companies, these big industrial companies and an american education. why would silicon valley not look at that like a very simple solution to what is, in fact, an endemic problem? >> quotas are just wrong and they are bad and they don't work, and they don't work -- >> do they not work? >> i don't think the work. in particular i think it's another way of saying that we won't lower the bar. you have to have quoted so we'll get people who are not qualified. that isn't what anyone is saying. what i'm saying and others are saying is we want a level playing field. you need to have a level playing field. you don't go to places like mit peduncle to places and focus on

mit and and stanford and cmu. you don't go to places that don't have diversity. that's not about quarters. that's about leveling the playing field. talk about quarters, look at the ethnic diversity of any of those universes and that's a court for people who are white or asian. i think, i don't want to have to talk about this again because i don't believe in quotas. i think they are inherently wrong and realistic solutions that don't have quotas attached to them. >> i mean, i understand that and to a certain extent like of course, you know, there's got to be a better system. it's it's a pretty blunt instrument. but at the same time i've seen other interviews with you when you talk about the endemic and systemic nature of privilege and a people need to actually step back from the table to make room for other people. i think you talked about that in the interview.

i don't know, this is really tough issue to talk about but ii think it's important to do so. i wonder what this space looks like, how that stepping back works when privilege is so institutionalized at us that even something that most people recognize? >> i have like a data point to bring up. there's an organization called -- it's a group set up by a diverse group of entrepreneurs, mark zuckerberg. you look at the patriots page bs probably looking much like diversity does look like. they are looking to raise h-1b visa which i support strange enough. i think it's a great thing thing. let's do that. they got together to raise h-1b visas. cap. the lobbying firms for these companies that are supporting their spend anywhere between three and $4 million per quarter on lobbying. three to 4,000,000 dollars per quarter, quarter, up to $12 million a year on raising

that h-1b visas cap. when something like that for increasing diversity and increasing inclusion? i think that's a place where you can start. you get the people are doing something like that and apply it to the united states come up like to less diverse areas. and you can take another data point i'm going to try to type two things together, his book, 37% of their engineering team is asian. googlegoogle, it's up toward 40. twitter its 37% at the amount of money they spent in asia overall, 25, 50 million per year since 2012. is it any wonder they have those percentages of patients? know what's not. what if we were to spend that in detroit or enrichment. what if we're going to spend that in washington, d.c.? when we have a more diverse workplace? i think so. >> isn't that sort, just plain devils advocate, advocate, isn't that a matter of market

extension? look at these companies are trying to go abroad internationalize and like grow in global markets, and a way to do that is to set up research centers and things like that and reach out to those countries. maybe i'm conflating two issues and confusing to interview she did. i did a lot of research for this, i'm sorry. if the market is a saturate in the u.s., these companies d dueo set up shops in all these different areas. spirit they don't need to set up shop at the same scale. do you want to put 2000 people? probably not. could you put you wanted to? definitely. at the drop in net for google and facebook. and it's cost competitive. these areas are cost competitive, two areas in india and areas in china. i have had teens, manage of a wonder people in dingy. i know what cost structure looks like and you can do the same thing here. at a much lower skill. that does something interesting.

imagine if he did go to detroit, which google has done. if you go to richmond that have large diverse populations. all of a sudden you see people in those neighborhoods, people see their neighbors in these well-paying jobs and they start to us by her to that. number two, people who want advancement of there to come back to headquarters. you have people come to san francisco, going to menlo park, going to mountain view. what happens when you hire diverse people and you create an inclusive environment? they talk to the friends and the networks are going to look like them. they're going to hire their friends and thei associates whok a lot like them. then you start to make inroads into this problem that these companies have spent the last three years and tens of millions of dollars and have made virtually no impact whatsoever. >> we've been beating up on a very large tech companies. let's go down a level and beat up on some other people. criticism, it's healthy criticism. is it the same true of the

entrepreneurial community? when you look at what's happening with entrepreneurship and investment from d.c. speaking tech startups? would you advise young arctic winters to stay in the valley to build their companies? >> good question, and probably not. it's hard to encourage someone to stay anyplace that is hostile to them. i said this and i will keep repeating it. when you walk into one of the officers in sandhill road and people have a preconceived notion of value are based upon how you work, whether you're african-american, hispanic or a woman or a woman entrepreneur like more crude was up. a moment ago who talk about her struggles in fundraising. she has an amazing platform, and amazing market opportunity and it's very difficult for her to get funding. why would you stay in a place that is hostile to you? there are smaller markets, private equity firms, shout out

to power moves in new orleans. there's a startup detroit and invest in detroit. there are small committees that can help. i can't remember the gentleman to name but a year or so ago he said fis going to create another start i would go to detroit. >> it might've been deigned gilbert. drumming for detroit because, he would be the only invest in town because there are these markets that exist, but the capital that's their isn't as extensive. that's just a given. >> you're right but if the capital is not available, the capital is not available. if you walk in the people are like well, this is happened and i am an advisor for some companies, i mentor octopus of color and diapered stories were people gone and said you need a male cofounder. you need to get more white people in your team because having a team of six black people doesn't look good. i for these stories from people.

things that will never be said to her agent or a white cofound and silicon valley ever. >> does it mean that one should just try to ignore that capital completely? is a solution or is it just so entrenched that people should just not worry about it at all? >> silicon valley follows. the season follow. if you have a big hit somewhere else, whether or not if the a pn of color and hope that it is, vc will follow. if he goes there, trust me, they will follow. this is what needs to happen. i hope it does because i think that's the fast-track. >> well, we are almost out of time and a think we can just ended there. this is an incredible conversation. i hope we get to continue it over many other events like this one, and just in person. it's a pleasure talking to you spirit a pleasure talking to you. thank you.

[applause] >> see if we can pick him against david marcus backstage and see what happens. our next guest is from razors in gaining on the pc. you guys seem really engaged. c-span, what's up man? please welcome to the stage -- [applause] >> thanks for taking some time. >> thank you for having me. >> razer, you guys have built razer as big hardware company for gamers by gamers pick you are doing, gamer is your thing. now you are doing something a little bit different.

tell us about your news today. tell us what you are doing. >> so very quickly i think in the past couple of years we've got a bit of a start up, a longer pedigree resource between been around for 10 years since we were founded and we've done everything from hardware, so if shipped over 29 connected devices worldwide. without a massive software platform of gamers, 29 active gamers that come online everything they to connect with us. i think one of the question that was uppermost in our minds was what's next? what else can we do. today we're announcing a corporate venture fund calling it the ventures. it's a $30 million fund from razer. we are investing it off balance sheet really focused in early-stage startups that razer with our kind of structure can bring value add to the investment. >> would you say that this is

razors way to try to diversify itself? if i recall it's doing stuff in robotics but also stuff like e-commerce supply change management. real soup cannot kind of investment thing. what are you guys doing? >> i think a couple different focuses. the first of which is i think were looking at startups that razer can bring value, we know there's lots of startups with a whole lot of exciting technology, solutions, products. so for so for us we really focused on company that razer can help. we are not a traditional vc by any means. looking at, for example, we have our user base that we want to bring across to startups out there. over and above we've got a lot of experience in hardware and software. the hardware is really hard. everything from prototyping to mass production. these are the things we want to bring across and help startups. of course on the other end of spectrum were looking at things like software that we can help

the startups with. and finally i think specific in terms of companies that want to scale beyond what you are at this point of time, we have a global distribution network that we can bring across to startups. a third of our business today is in north america, a third is in europe, a third is in asia. we work with, for example, retail chains like best buy in the u.s., media two in europe. we've got -- in china so these are some of the benefits that would try to bring to the startups as opposed to traditional vc that may be primarily focused on financial return. >> okay. so razer is your target audience are gamers. do you see yourself as a mainstream company or disuse of kind of aiming at like really niche specialize gamers? do you want to be a mainstream company? >> for ourselves we have greater a bit of a cult brand of the source. we have gamers, they set up

razer shines. we have a huge following, and that's really the core of what the company is for gamers, by gamers and that's what we want to continue focusing on. i segment of the gamer was passionate about design, passionate about technology. that's really what you want to focus on. what we have realized, however, is what we don't necessarily want to go mainstream, mainstream is coming to us from the premise of if you see things like pokémon go, people who don't necessary to identify themselves as gamers are slowly looking at gaming, being one of the most engaging forms of entertainment. on top of that and maybe segue back to the conversation on that testing they gamer community is also the perfect user base to test new technologies on. look at it historically come you

got motion sensing from the nintendo wii. we've got tr, so gamers tend to be tech savvy. they are very comfortable dated testing technology and more importantly evangelizing to the entire gaming community. there will probably be more gamers in the future than any other segment. >> dimension pokémon go. huge success before going to have john on stage i think tomorrow. are you guys, do you want to build something as successful as that question want to build a pokémon go ever? is that in your sites? could you doing? >> i think traditionally for us we want to continue doing what we are good at, which is focusing on gamers building great product, software and services for gamers. that's what we're going to continue doing. when we first started 10 years ago, david wasn't about -- type

pitching anybody can years ago about hardware people would go like no, no, no. that's a software interested in. today hardware is a renaissance of sorts. gaming is getting a lot of primetime because pc gaming, console gaming, mobile gaming. amy is bigger than movies. it's bigger than music. there's a huge amount of interest in gaming right now. >> so for ourselves we are in an opportune position to take advantage of that, but while masses come into gaming today, these masses will probably leave when their something bigger and newer, shinier to look at. ourselves, we know what we are good at which is designing stuff for gamers. we will always be doing that. whether the industry is big or small, that's what we are good at and that's what we will be doing spin that that mean you don't want to build a pokémon go? >> i think of it comes along and if it's something we can build for gamers everywhere, look, there are 2 billion gamers out there right now.

>> dammitdammit, we should've de that. we could've done that. did you have a moment like that or did you just think that's so cool, let's build a communication layer on it? >> i think we just build stuff that we like. we started off as a peripheral company, and candidly because i travel so much and i was looking at gaming laptops and they were big, heavy and thick. today we build a team in the past couple of years and today we may probably some of the best gaming laptops in the world. that's what we do. we like to build things for ourselves. and we really taking over the world and a sense there are gamers out there and we're really hyper focused on the gamers. that's what we do. >> okay. what do you think the next generation of games is going to look like? >> so that, you know, we could be here all day.

>> in 10 words or less. >> sure. spinning you guys are doing stuff in the art. is it all going to be in the er or are we going to be are massive right now. but we still have a lot of consoles. where's the hockey puck going? where are you guys going with that? >> again i think overall for gamers as a demographic, it's not just going horizontally in different geographies. traditionally in the past it was the u.n., -- the u.s., europe, china, southeast asia. game is going really quickly everywhere but we also see gamers, the demographic going horizontally. gamers are getting older as a whole. gamers are more familiar playing different types of games. and even today a two-year-old, this is why think on a tablet, right away. so given the whole proliferation of the entire stack, we think

the game is going to go everywhere. it's going to be a lot motivation and i think immersion is really key. while vr is about having the most immersive gaming experiences out there. be at whether it's in the mouth you play on the pc that gives you a call on your mobile phone to tell to go back to the game, or different layers of the art. >> just go back a few seconds but one of the categories you guys are doing is robotics are you guys building a robot? >> we are excited about robotics. at razer we got into labs that we try all kinds of different things. you may have seen at ces we can do -- and the big bang of sorts. we are always again new things, looking at new interfaces of sorts. we think robotics is an exciting

new area that's a huge amount of innovation. i think for us because we see it as a conflict between software,, firmware and hardware and that something that we can as a company help new startups spirit i'm going to take it as a yes. okay. now, although a bit bit about razer itself, the company. you mention all ladies new area spirit is also a lot of new companies coming into the space. who do you see now as your biggest competitor? >> so that's an odd question of sorts. because i think we are pretty much a different company in the sense that we represent probably i company on a newer wave of things that i do is sing and a spot at the. so traditionally, companies back in the day would be great at a certain thing. so, for example, they're great and making peripheral or great

at making laptops or what have you. these traditional companies would then say okay, i'm going to carve out a segment for productivity. i'm going to do a productivity mouse, for example, a laptop or on going to do a gamin a gaming, something for designers, something for, i don't know, sports sports people or what have you. but that has changed. ourselves as a company, we have evolved to really look at the user. and with greater affluence, with greater focus on getting greater experiences. we see brands like that coming about. action sports, branson was it okay, i'm going to figure how to do these different categories for one person. whether it's somebody who is a cyclist or somebody who is excited about, or anything. like for us elsewhere focus on just one person and that's the gamer. the thing is, do we have -- do

we have competitors in the laptop space? does. we have competitors, for example, in the software platform space, yes, but there isn't a single company that is just hyper focused on the gamer with all of that. we don't usually have -- spirit not today. what about amazon? they made a massive investment in twitch. there acquired twitch. they are now finally finding success with hardware. you know, with their interesting echo and everything. so do think that might be a company that could keep you up at night one day? >> i think for us the entire industry for gaming is just so big. we are huge fence about amazon is doing with twitch. twitch is a great partner of rage and we work really closely together with them. what they're doing at lumberyard, for example, in the studio that they have.

that's a company we have huge amount of respect for, but because the entire industry is massive, if you look at the movies industry of the music industry, there are larger companies that go throughout the entire echo system without competing, so to speak. we see gaming being so much larger than movies and music. there is just this massive upswing of opportunities for all of us. >> lets talk about investment for a second. i know you guys are not investing in startups but you're a startup, too. 18 -year-old startup. some of your investment you disclosed. some of that you have it. some of it has just been reported and then you confirm it. ..

>> the strategic investment, for sure. you guys are like opening stores everywhere. you are building more hardware and a different kinds of hardware. are you funding all of that yourself from your current coffers or will you need more money and raise more money for that? >> we did a recent-- i think it was reported on tech crunch, so

what we are doing primarily for these new activities is to fund it from our own coffers. we see a continued need to fund because i don't believe that we will be all things to all gamers and we see a lot of incredible talent out there. we see startups that we could help bring their services to our users and give a leg up immediately with 20 million active users or to say, why don't we get you global immediately through all of our channels everywhere and if you need to meet any prospective customers or partners you can use any of ours worldwide and i think over and above the difference for us between razor as a start up, a fund for startups by a start up is that

we have the experience from scaling from two people to close to a thousand people worldwide, so that's the real difference. you want to partner with venture capital firms and give-- help companies go from zero to 100 immediately. >> a minutes ago when you were first talk about raising money you said you think a lot of cyber companies are staying private longer, but eventually you may consider what the next step might be. where are you on things like ipl plans and in general, what is your opinion on a company like razor going public. could you go public if you wanted to write now? >> i think for us, we have considered going public for some time, but we want to make sure we are a company that is ready to go public. there is no real reason for us to stay private, but i remain

optimistic and mean we want to make sure everything is addressed and make sure that we have crossed the tees and dotted the eyes and it's also a factor of the economy and how the market, we remain open to that and we'll just keep an eye on that. >> do you have a timeframe for might-- when you might consider an ipo? >> that's like asking the timeframe on one of our products it will be ready when it's ready. [laughter] >> are you profitable? >> i think our businesses very profitable, but we are doubling down and that's why we say we are 810 year old startup. we have a profitable core business, but we have exciting initiatives where doubling down on and always looking to reinvent or revolutionize. to put things in perspective, we

first started this entire gaming industry of sorts and we put the focus on that and back when pcs had become traditional and boring and dated and i said we are going to reinvent the traditional pc laptop. i think many people said at the commoditized industry and you don't want to get into it, but what we have done in the past couple years is created an entire new category of sorts, so we continue to do that and we continue to invest heavily in terms of r&d and that leads to the bottom line. that the bottom line we are comfortable with and what we want to focus on is to create truly great products and services. it's also an opportunity for us to bring more services and partners to things that are great new technology and we welcome any of the startups out there via to whether it's robotics or gaming software or

anything that we can at razor bring value to and we would love to talk to you. >> okay. so, we are running down on time now and i just wanted to ask you another question. okay. so, just to last questions and i hope we have time. one is about something that i love to ask for, you know, other startups that my b in the same position as you guys. you have strategic intel and i would be interested to know if how you work with them, strategic investors? i know you like put out a great web cam earlier this year. it's got fantastic intel. >> technology. >> really excellent camera. did you think of that and then approach intel or is intel influencing how you choose what products to develop?

how does it work and do you advise startups to do something different than you guys have done in that way? >> intel capital is one of the corporate venture groups we kind of modeled rules after because we have great respect for them and it's a bit of two things. use intel capital to navigate through intel and we went to work with their team and they have truly great technologies that what we do at razor is we look at it from the lens of a gamer and we are like that's cool stuff we want and for example real sense that we put into the razor stargazer and all that removes the background of any streamer and that's really really cool. what i think intel looks to razor is innovation in the gaming space. we have channels that can reach gamers immediately and we have an audience that is hugely

passionate about technology, so it's a bit of a symbiotic relationship. that is one of the reasons why we have come up with z ventures. we are able to reach out for startups to reach out to as many gamers as possible. >> almost following the intel model for you guys. >> on a smaller sense. >> smaller scale. one other question. razor, what happens when you want to leave? do you have plans to leave? quick answer. >> we have a great team of designers and engineers, so i think that pretty much answers that. >> no plans to go. >> thank you so much. >> thank you so much. [applause]. >> all this week with congress not in session we are showing new book tv programming in prime time.

tonight, a look at notable 2016 books starting with patrick phillips on his book, blood at the root: a racial cleansing in america. then, ed young discusses i contain multitudes. after that margot shetterly on hidden figures, the american dream and the untold story of the black women mathematicians who helped win the space race. finally, gary young looks at another day in the death of america. a book tv tonight and all this week starting at 8:00 p.m. eastern on c-span to. on a c-span3 it's american history tv in prime time with programs on world war ii. we will begin at 8:00 p.m. eastern with a discussion on spies and codebreakers. seat on c-span3. >> this week on c-span in prime time, tonight at eight eastern a review of house and senate carries from 2016 on topics including the flint, michigan

water crisis and the wells fargo unauthorized account scandal. >> seriously? you found out one of your divisions had created 2 million fake accounts, had fired thousands of employees for improper behavior and had cheated thousands of your own customers and you didn't even once consider firing her ahead of her retirement? >> thursday at 8:00 p.m. eastern , we remember some of the political figures that passed away in 2016 including former first lady nancy reagan, supreme court justice antonin scalia and try to not at 8:00 p.m. eastern our program continues with shimon peres, mohammad ali and former senator and astronaut john glenn. this week in prime time on c-span. >> join us on tuesday, for live coverage of the opening day of the new congress. watch the official swearing-in at the new and reelected members t