>> this holiday weekend on c-span2 book tv, saturday night at ten eastern on afterwards, wall street journal editor joe and loveland looks at top women leaders in corporate america, and at 11, cnn political contributors talk about journalist thomas lake's book unprecedented, the election that changed everything, and a look back at the 2016 presidential campaign. sunday the 2016 presidential campaign. sunday afternoon a little after five, professional or could talks about the final volume to her eleanor roosevelt series. at ten pm eastern, author sl price on the death of the steel industry and its effect on a working-class town seem to the lens of high school football, playing through the whistle. for the complete schedule go to cspan.org. >> coming up next, look at us-japan relations and current military strategy. then journalists uncovering emerging technology in silicon valley and other parts of the u.s. after that our interview with retiring congressman jim mcdermott of washington state. later on the tv, a look at notable books from 2016 that

were featured on the new york times book review. military experts examine the us-japan relationship and how science and technology is affecting defense cooperation. from the hudson institute, this is 30 minutes. >> it's a pleasure to introduce our next panel. andrew is a distinguished fellow which he founded in 1995. he assumed his position in march 2016 after serving for 21 years as president of this premier washington think tank. his service was preceded by 21 years, his 21 career in the u.s. army. he is also served in the department of defense office of assessment and our personal

staff of three secretaries of defense. he currently serves as chairman of the chief of naval operations executive panel and on the advisory council of business executives for national security. our other panelists is doctor william schneider. i colleague at the institute and also president of the international planning services incorporated. it is a washington-based international trade and finance a verse firm. now doctor schneider was formally under secretary of state for security, science and technology in the 1980s. he served as associate director for national security, international affairs and the office of budget. prior to be nominating as undersecretary and he served as advisor to the u.s. government in several capacities but i would even add almost endless

capacities as his understanding of both military and scientific affairs is unparalleled in this town and in the thinking world. he also served as the generally by three on arms control and disarmament. he served on the defense science board since 2011. , 2001. gentlemen, my question to you as we begin this discussion and get underway and thinking about these questions is how did this offset strategy come to be formulated and how do we see it shaping up as something that will end up being more than simply another antique catchphrase that circulates in the pentagon for a number of years as what happened with transformation and really becomes a solid, grounded, concrete new way of thinking

about how we will fight in the six generation. >> i'm sure we both have views on this, but i think the third offset is a concept, whether it retains that name or some other reflects the way in which u.s. developers to the technology that it needs for national defense to the threats posed. the u.s. has historically had a strong predisposition to using technology to solve problems whether it was in a civil society where with the fence. we have always had a labor shortage in the u.s., we've always preferred using technology as a way of mitigating these kind of shortfalls and the modern history of this concept is rooted in the soviet american

rivalry in the cold war where the immediate aftermath of world war ii left the former soviet union with a huge manpower presence in central and eastern europe and that offered them a powerful advantage in conducting conventional military operations because these forces couldn't be concentrated. by the introduction of us short range nuclear system in the 50s and 60s, we are able to force the soviet forces to disperse and this diminish their effectiveness as a powerful conventional force, but this capability quickly lost its credibility as it became somewhat self-determined when you are trying to shoot 30 rounds of nuclear artillery. day for 30 days.

it didn't seem very credible and that evolved into the need to deal with the ultimate problem which was the russian second and third-generation capabilities. andrew marshall was very effective in propagating the convergence of the decisive technologies that made it possible to, in effect, defeat without firing a shot by the conversions of technology of precision navigation and guidance with persistent surveillance. it enabled the u.s. and nato forces to completely expose the second and third echelon soviet forces to destruction and that contributed to the ability of

president reagan and president bush to wind up the cold war without the kind of for fair we had constituted, but now we are in a new environment, post-cold war where they have done several studies on this problem where the technology of modern warfare is now more or less universally available. that is any country can get a hold of this technology and while china is perhaps the most powerful exponent of the use of this universally available for military purpose, other countries are doing the same thing on a different scale including iran and north korea and russia is adapting its own

tactics and operations to the opportunities created by access to these technologies. the need is to find a constructive way in which we can defeat these technologies along the lines that were mentioned. the third offset mentions an effort to do so. >> i'm not sure i have much interesting to say after them, but let me give you my twist on the issue. first, i think the third offset strategy is a nice term, but the core of what we are talking about a strategy and we all know the basic definition of strategy, how you how you employ limited means to achieve the ends you seek, but if you dig a little deeper, you see that

strategy is also about, at its core, identifying, developing and exploiting advantages against your adversary, while at the same time recognizing those advantages that you have that are becoming what was called in the early days, wasting assets. those those advantages that are fading away, and your adversary is constantly trying to make your advantages wasting assets and develop new advantages of their own, and there is this constant competition that goes on. as was mentioned by doctor schneider, we have this enormous advantage after world war ii, we had a nuclear monopoly. that became a wasting asset when the russians tested their nuclear weapon in august 1949. we were confronted with a strategic choice ,-comma what to do about it and the choice was,

do we build up our conventional forces, the lisbon conference and nato in 1952, there is a commitment to build up a force of 90 divisions which sounds fantastic these days when you look back at it. president eisenhower, after elected, so this is going to be a long-term to competition. we don't know when this will end , he made a strategic choice. he said, in a long-term competition, an important source of advantage for us will be the industrial base and the economic base of the countries of the free world. that is how we will prevail in this long-term competition. he said what we are going to do is ride this nuclear advantage that we have as long as we can to allow our allies to rebuild their economies and technological basis.

in fact, that strategy worked in the sense that it succeeded in rebuilding these economies, rebuilding technical basis until about the 1970s when, not only did the russians, as dr. as doctor schneider said, have a manpower advantage, conventional forces advantage in europe but it also caught up to us in terms of nuclear capability. those of us who are around remember all of this. there were a number of people in the pentagon who looked for another offset, another source of advantage and they founded in technology. the united states and the rest of the advanced industrial economy was shifting from an industrial base to an industrial information hybrid based

economy. this was something soviet russia didn't seem to be able to do. i was buying sony television sets and hp pocket calculators. i wasn't buying any that were made in soviet russia and neither were you. people like william perry and andrew marshall saw this as a new advantage. he said you could apply this advantage in many ways. we used it in terms of fbi to lay the groundwork for the original battle networks. we used it in submarine quieting. we used an impressive precision navigation and timing. we used it in weapons and in developing stealth technology. there were a lot of ways we could leverage this advantage. this advantage paved the way for

what some people call a revolution in military affairs in the 1990s. the advent of american battle networks combined with precision weaponry. that isn't the case of the first two areas of major advantage. this advantage is now becoming a wasting asset as both yarborough and the doctor has said. china's development with chinese characteristics and so the question is, well, if that's the case, if now our dominance in battle networks and precision warfare is becoming a wasting asset or at least being offset by the chinese, where we go next? i would argue, echoing dr. schneider, i don't think the answer is found in the 1950s or the 1970s. i think the answers found found in the 1920s and 1930s. as doctor schneider said, a lot of the technologies, and of

course militaries overtime are becoming more capital-intensive, and as you look the shifts, to a great extent they are technology driven or technology is a key component a key component. in the 1920s and 30s, you had these commonly available technologies. the commercial sector was really driving a lot of what was going on. the automotive industry, the aviation industry, radio, the military take some of this and adapts it so radio becomes not only radio for the military, but it becomes radar. the question is ,-comma what differentiated, the militaries that got it right from those that got it wrong. technology is widely available and as dr. schneider said, it's widely available today. where is artificial intelligence advancing. where is big data. where's robotics and nanotechnology in the biosciences. it's not occurring in los

alamo's, it's a crying out of the sector. we can refine it and adapt it, but just as in the 1920s and 30s, the key, i would say there are three keys in terms of who wins and who loses. the first one was identifying what are you trying to do. what is your purpose? the purpose of germany was to win a quick war against poland and france. the purpose of britain was to defend itself from strategic aerial attacks. different problems for different countries. different objectives. what differentiated them was number one, trying to identify what you're trying to do, and i would say today what were trying to do in terms of the us-japan alliance is defend the first island chain. deferred china from acts of coercion and aggression, and if

you don't know what you are going to do, then it's very hard to leverage technology in a way that makes it most effective. so, for example, the german military leverages aviation and radio to create blitzkrieg. the navies take some of that same technology and build their fast carrier and long-range radio, aviation and so on. they have a different objective and they are operating in a different domain. and so, number one is what are you trying to do. second is figuring out the operational concept, how are you going to employ this technology the maximum effectiveness? again, you see a great example that the americans use is the french army and the german army, both have tanks and radios, both have aircraft, but the the german figure out how to put

them together and the best way possible. the third is time. who can do it faster? who figures out the new way of war first because whoever figures it out first has a decisive advantage, which is why the british navy doesn't perform particularly well where the others performed at a very high level. :

>> >>. >> these are important remarks especially about strategy to figure out the best way to use our access to these technologies. but one of the other dimensions is a subsidiary level in is recognition of the advanced technology that we have been discussing and technologies now introduced with their importance is particularly profound with a new contract that we discussed for example, the

application of the unmanned underwater vehicles and and up possibility of the seabed becoming much more transparent with uh defense establishment especially the officer corps to adapt quickly to these kind of operations. that is something that is something given to little attention with the preoccupation of technology there is many different ways it could be applied and only through the shaping of concepts of operation that technology makes a difference. this is something to take a vantage of.

because the nature and rapidly for the advanced military capabilities and that phenomenon of the exponential rate. and to take as death of 1 meter each 32 times you have gone 32 meters. and exponentially you are up to 1 billion almost any technology that could then become software with much

more rapid technological change so the idea of having a 40 year life in senses that underlying technologies in the algorithm make in that will discuss different capabilities with the changes of concepts in this case discussing the alliance. but also the industrial implications how do we cooperate with those underlying technologies with that industrial organization that allows those public tim -- companies with having

them fail. make does that imposes demand it cannot often be done. and with the scientific and industrial opportunity created by these technologies. >> accusing history as an example, every bed the new that aviation was new and important there was the great struggle with our navy to help the the of battle line get into position and

then to maximize your firepower. and then to go to scout to be put into position. but at some point to realize you can use these planes of course, we will remember that and our own navy was very much involved with those capabilities in they said these all help of battleships but at some point within can thaw have a very heavy payload is not about positioning but how they change and that is the battleship that the aircraft

carrier with all of the context of what they are trying to do i have that senior naval offices with of much improved version of what we have with the aircraft carrier today. one that does not attack but launches the underwater vehicles. when did that transition occurred? petit unmanned underwater vehicles. and then to travel great distances with the inability

to carry a heavy payload. if you think of them becoming smarter they start to look alike. so there are so many different technologies at the different rate of speed requires serious sustained intellectual effort not only the technology but what are you trying to do? what is of military capability? >> we will want to move on to a panel at 1030 but i do have a question and i will pose mind first as both the you know, there is a

feeling that that third offset strategy hong with the way that dod has existing conventional forces. and they have made it their motto peace through strength and has clearly bent thinking about this along the lines with of conventional weapons so if you are advising president-elect trump with this offset strategy's to conventional forces? >> with that technology we have been discussing and

that can extend a the life. but did is accompanied by swarms of one man baird vehicles and then to extend the life of the platforms so that evolution of military capabilities. with the existing systems that had built around this concept of operation to become available.

>> i guess with my elevator speech it would be that we have built a military that is very entranced by used to operating an environment where the chinese put into play. and second with china and any way to calculate we talk about rebalancing and what are we trying to do?

to defend us maintain the position and at the core is japan or taiwan or philippines. and those reinforcements with the expeditionary forces and then at some point there wouldn't be happy to hear that posture but anand then depending upon how you lancer this different answers about the kind of military but we have

been going on with the pentagon but if we take a good hard look you get significantly different answers. >> name and affiliation. >> just last week we were talking about the stages of technology of the work force of u.s. competitors are that military. and with exponential change.

>> the military establishment has a good track record of treating people -- trading civilians to keep up with changes of technology and i know about the apprenticeship programs and what they would have done differently from the past. and then to take advantage of it. and one thing that we have ignored and americans cannot

fight. to win the long war. but then to win the shorts and a sharper victory. but on the and and but we could prevail in the long war. and what we at of with strategic materials buchanan not surge production of other things like munitions. so having thought about what

kind of posture with aggression and coercion. >> thank you very much to the panel. in juneau where the strategies' come from. [applause]

>> so now our panelists from the department of defense who could not be here to speak that unfortunately was not able to join us with the department of defense. but i ask if they are willing to step didn't and he agreed to do that. and for this panel to talk about these issues. my friend and colleague the senior fellow with a long history with multiple

president joe -- presidential with offices secretary of defense, asian affairs, and the off serve mostly the book on the china grand strategy with us global affairs. not only in japan also a best seller of china. and that chinese conflation blacks is that correct? for internal use only. and it comes out 600 million

readers. so what he does it know so as part of the panel and discussion. what are the chinese going to do as a counter response where d.c. china moving next in with a2ad with the current strategy is to the upcoming next-generation that is taking place here?

>> it is addressed to both of you but to reassert that question you see that military strategy as only 10 percent. the question focuses on military. there are a few on technologies for example, that is very different that i discuss in the 180 year marathon that what you can get from other people and

get other countries to fund your national science that is why we have a -- they have won tentative agreements and in beijing. and then with the national science foundation. they try for that in china. and if the chinese complaint with the ministry of science and technology so that's is part of the grand strategy to surpass the americans with a first laid out as a

goal of 1955. but to do that this seventh comprehensive sectors and the most important sector they decided fairly recently it is science and technology. , and as they try to make us claim to a new discovery is this not done here in america so how do you pioneer? the science and technology is the greatest source of economics to be focused on that. after a.d. they did a whole series of things like the

president of china but isn't just national science foundation under early president reagan's time starting in 1983 with biotechnology end supercomputers. so for 30 years that will become effective for the chinese in the 100 year marathon the ungentlemanly of the department of state with the cooperative

agreements to help chinese science and technology to improve science by the way. we also serve six weapons cleaning torpedoes. and other types of intelligence technology i have us episode between u.s. and china with that top-secret memo to be declassified with uh radar technology that is given to you in realtime. they need to be able to

scatter the early-warning technology. so what is the grand strategy of china with military spending of the military strategy so if you look at that but the pentagon acronym is not used by the chinese but that is what they do for the last tenures. their version of what they're doing is the 1955 challenge. there was a list the indicators he had an assessment had to pass the americans it was the single

most but it was between 20 and 30 million people with u.s. intelligence by the way it is called the big leap forward so instead of the communes why? to surpass the americans in this single indicator of net assessment. no i used to set at the same time of that assessment later became known as the revolution of military affairs. that the boss andrew marshall was signed.

but i was working on and we realized that was the major effort but in the military but they play the bigger game. in defense over the coming decade. with that budget control lack. so in that pattern but more of the global basis the

experts used to swear of the bible that to things is the definition of hegemon. aircraft carrier and the global military base. madani that global military base. and actually a friend of mine in china. and overtime the contestants have changed that is called science of strategy. and then rules have been

added. and then to block the domination of the cyberwarfare. and then to follow the of that military strategy if you saw that testimony in april. with the house armed services committee several use the word china. but that reminded me a large amount of money was given to a man. with space technology in as

highly qualified and came back with a 300 page report. and we are so far ahead. that was wrong but in many cases what you find is about china's intentions prod of the accomplishments and achievements some say to the point of arrogance you talk yourself down and say you cannot do anything but their reaction to my book is the

footnotes about china having a strategy by the foreign minister last week china has no strategy and has no desire to replace the united states know these technical assistance programs they have stopped. to go through the national science foundation so in fact, it now has a bonus.

and if you have a cooperative partner you additional funds for your project and that is a minority in the government. that is the biggest cooperative presence in the world. we don't do covert action. and then the number of ways with other allies and partners the same way. that is very shocking to the people. that have bought this technology in texas to share

defense production we have been doing that for quite a long time. but defense technology is still a matter of negotiation. with the arms embargo. and with that technology. but something that is on the list to be denied. >> and then what michael said that several years ago

secretary gates was then defense secretary that the chinese was the best credit just. but in terms of our response to what the chinese are doing but that is my earlier point we have not quite decided to do that. unfortunately citi is not on our side. but on of broader sense decide it is the traditional way to project power.

and if so what of a response ? in the foreign affairs article for what we are trying to do if that a2ad is the new normal then along that chain. is admiral curtis said it be increasingly difficult at the great distance with our new normal. this is a very risky proposition. but at the same time we have to nature that the a2ad

regime is supplanted then we need to be the ones with world war i and if that is the new normal but the germans need to figure out how to restore that offense capability. so there is ugh tool requirement on our part to to develop that resources of the new defensive regime. but then to give some clue on how to do that the then to develop those technologies and capabilities that is of

advantage moving into a new regime but then to the new area of military. and through much of the 19th century and then to give vantage of the 20th century. and then to make one final point, attitude labatt the way to see about what is important.

and then the exchange and part of that and those are all valuable. so for example, the special with those conventional warheads but that is us keep part for the aircraft but giveback to the point of the operational context one way to think about it is too risky that thinks about how

to do that. but to take that capability and technology together. if you can operate that environment then what you might be able to do this to come down in the of metaphor and after having that capability that saddam hussain was too busy trying to hide is missiles.

with the satellite systems. so how much do they really get breaks that or not. which is what we actually worry about. but they cannot say if they are at the base sarnoff. but then to create the cold war if you don't know which

one. but the missile defense that we have the aircraft but they have to assume on missile defense to involve multiple clients of technology with of combination that could help with cruise missiles so it'd

is a very hard problem to with a strategic significance especially as ally is. >> so i will mention the word tie one. but but it is pretty arduous. and with the navy ships with the two star admiral also a two star general so olmos

part of that there was intelligence cooperation. and then not to restore that. but as a military partner pdf but that wouldn't change that will not change. to this so-called elected president of taiwan's. so violation of the national consensus.

so how do develop technology ? and but you must have cheaper technology but after midnight but then to assimilate and to do that successfully. but but with that program

described. >> we have one vote. [laughter] but then in terms of your larger question committed is misunderstood by the chinese. but to think that would be a good thing. but then to have that 1800-mile range.

but that is what the press says. according to them they could barely cheaply. etch shows what thought to japan can do. so what is the cost cuts? ?

but stressing about taiwan's so that is in a similar way for that altman system and that's shows the well-being and personal freedom with the environmental protection. part of that strategic military issue that is incredibly important in terms of the pcp and also to

be legitimate. but then to cooperate with uh taiwanese overtime. but one of the promises he made to the chinese in the tie one defense. that is what was made public. >> the of what they could

ride to china. but with some form of containment. but for china because japan

was responsible that is the basic mission structure between japan and the united states. the usda as japan but aside

from the airforce with the fighters combined and as a defensive role but the one thing that is lacking is the strike capability. and the last thing is geography and geopolitics. >> and the navy and the air force especially the south

china sea but the line connecting taiwan betted is discussing the united states betted is a new concept in must be something different.

and then hard enough to contain china but with that strike capability. of the crisis that is not so. tsks -- and the japanese capabilities but with this

missile defense capability than the things that i want to say. thank you very much. >> but in terms of missile defense that is extremely important within the context with their broad comprehensive approach to missile defense and the question for the japanese fleet and with those american aircraft carriers would be the position of the japanese fleet? how close all or you and what is the alternate logistics'? have you block japan? out?

>> we will block the threat. >> but first, okay. >> if they are watching this it makes me uncomfortable. [laughter] >> they could prepossession submarines and targets the ports with missiles and the smart to mind the of the thing that i would say the interesting moves in terms of china moving into the south china sea with their resources, but what strikes me is if we played the game with the chinese they have moved into some very interesting positions that if we don't respond that

will put this in a position to lose a lot of strategic places and in southeast asia. americans may not know how to play very well. >> would you support japan with the office of net assessment like we have in the pentagon? >> yes. is a useful way to think about these problems. >> is there a japanese translation? [laughter] >> thanks to the panel for what has been a fascinating discussion. [applause] and one final word that the

story today in the global times that seafood from the south china sea that chinese consumers are finding it very good and it tastes better from the east china sea. the upshot of the article that as china's presence grows in the south china sea this will be in economic boost for the people living around the south china sea the fishermen now have an entire new market to open up as a result that is the promise of economic prosperity through the shores of the country that borders on the south china sea that is a good reminder not just before lunch but

the fact that the a2ad strategy not only takes place with the of military and economic sphere but the domain that is very interesting and a comment. >> and the chinese name of a2ad is counter intervention strategy. >> absolutely . >> we want to get started with our last but not the least panel that i think in many ways plus the seal on how we think about u.s.-japan cooperation and

how we move forward at this point. from the of point of view of industrial security. is one thing to talk about technology sharing, a code development, co-production but there is the question how you go about protecting that technology and the data and the algorithms from falling into the wrong hands or prying where they don't belong. that is the issue of industrial security. it is important to realize one of the of the east discussed foremost indispensable aspects of a strong u.s. japan cooperation regime is that

it must be robust regime and the dimensions are eagerness particularly when they consider one particular bad actor in this mix namely the subject of our third panel. think about this. in 2005 japan underwent 350 million cyberattacks. 2014 it was 25 billion. there are a enormous problems to deal with this issue that go beyond simply rules and regulations but

from the cybersecurity point of view one of their challenges in is personnel a report on how to get japan cybersecurity framework and architecture street, one of the findings is japan suffers all lost our house in need of 80,000 cyber security experts personnel. that is a hard number to come up with especially with an aging population when it is the under normally they turn to with computer and software engineering. also the issue of information sharing with the protocols by which the government can share information about

cyberattacks and cybertheft and also and formation sharing within government agencies. for example, the japanese intelligence agency with the ministry of defense that it is important crucial issues but also there is the degree to which having the proper frame market which to operate this in just the cyberdomain that the intellectual properties will be properly protected and secured for the future. that is with this panel discussion will be about and i i am delighted to have to experts with us and experts on this field who can give us the presentation on what will be needed to win for word in this crucial area.

first is the industrial security consultant on national security of foreign investment john the united states to provide nonlegal strategic advice with the department of defense and department of energy. seventeen years with the department of defense including with uh deputy security general so those in and out san what makes that bad. so we should be very pleased to have them speaking to us this afternoon.

>> thank you very much it is up pleasure to be here today i will speak in broad terms about the u.s. industrial security regime very robust emplace since 1951 with those regulations that applied to industry at the time. now that has morphed into a couple of hundred pages of lead industry has to follow so it is very important other countries have programs as well to clear their industry because they did not engage in and classified contracts. there are a number of fallen countries have security

programs in place. and the key item that some a humane know is that general security on governments but in the past general security agreement it is known as the industrial security and next to exchange classified information. so with then the u.s. that is not a right. >> you can do-it-yourself. >> with then u.s. industry then you have to be

sponsored and you cannot sponsor yourself and barred to another u.s. company in they have to be on classified programs. so for companies are not eligible for security clearance but they are allowed to purchase u.s. companies and as long as they can be properly mitigated with the appropriate entity then they could put the contracts on as well. in fact, there is roughly 150 companies that are under majority mitigation agreements including

japanese companies from the previous panel but they paid do diligence to gather some statistics over the years. so there are agencies that our responsible with the department of defense the department of energy the nuclear regulatory commission and the director of national intelligence. and the defense security service is responsible for oversight obviously there

are other agencies that have programs they are smaller with a small degree of companies as well. so in addition to dss sponsoring or reid ewing companies that is adjudicated to meet those regulations they're also responsible for conducting their reviews of the company's they are generally done on a yearly basis source sometimes longer but

with the foreign u.s.-owned companies those done on a yearly basis but it is surprising many of those companies have since security measures one of the keys take away to maintain your clearance you have to have a good security program because it can be taken away from and i will address those in slides coming up. another a port at the -- important development moving away from their standard way to conduct a security review currently based somebody of regulations from the operating manual hundreds of regulations and that is what the review is based on however we want to move away from that message to the

threat to the specific companies technologies to identify the threat of an then come up with countermeasures so there has been some pilot programs those were conducted lithos proxy agreements but that will take some time for that new methodology to be embraced by that as well.

>> uh key take away that the company's need to comply, if they don't there is serious repercussions that they could be invalidated that means no longer perform on crossfire contracts of less day zero k that and you can no longer bid on the potential contracts it could take some time to get your clearance reinstated 90 days or longer. that is the incentive to stay in compliance and of course, the most serious repercussion headed is administrative leave terminated that they can no

longer perform classified contracts and they would take them quite some time with the serious adjustments to get back into the program . so with at is important for the japanese industry and that will take some time looking at the u.s. program as it evolves but it is the step in the right direction and will allow the industry to unchanged classified information that is very

beneficial for all and the long term. >> and a host of questions steve is president of edison global advisor. a strategic management consulting firm working in a number of various with unconventional oil and gas battle lot of us know and use also previously sir

negative chief of staff to secretary of state and in the marine corps served as the military to the deputy security fence and as of fighter pilot receiving to decorations for combat dollars. >> world war ii. [laughter] >>. >> graduating at northwestern university and professional journal with that defense analysis.

so i will be a little provocative i am last guy i the last day bet my talk before about personal opinions but i will offer those based of the commercial practice as be work in japan so my voice may be a little horse so let me start with some thoughts challenges most of my comments today booby directed towards with the japanese friend sin mind with the industrial development there are some

reasons why that is good for the alliance that we discussed in a previous panel to incentivize to participate more in that relationship in the burden rests with the japanese. with some assumptions on where we stand in the relationship isn't competitive on defense articles the ministry tends to craft of budget and to ensure the stability with a primary factor so there hasn't been any competitive discipline and the way there has been which means all of those for same functions have not been sacrificed but politicized for development

and megan's such chat will negative maintenance as it is. the submarine is righted there as an example tough competition but it is still a great submarine but there are too many things that they are clamoring for but japanese industry does not have the effective mechanisms for the defense exports. many say that they wait for the order the government tells them what they want to build and they go under licensed production to develop something indigenous but these companies that are

top 100 or 500 in the road with great international business but those units never had to compete say it'll find that within the defense unit of terrific international japanese. my opinion lighting changes have been in name only. the thank the prime minister had the great idea with the over arching vision to where he wants to see the government and nation ago but still those japanese clients there is bureaucratic problems with the exports there has been more of a push to create dual-use technology to make the process easier. that is nice but at some point you have to say we need of military only capability and figure out

how to do that. if we export figure out how to do that as well. the industry lacks the incentive outside of japan initiatives so if i am the head and the ceo with 1 billion yen to spend on a new investment why would i spend on the defense sector where the government will make me pay above my cost and i could do something international with the 30% margin so there is a lack of incentive for japanese industry itself avarice the government has yet to take on to help its industry. most indigenous programs are driven by threat paso the totally indigenous that it is very expensive handmaid

airplane with japanese components. that is fine if it was to develop an airplane but could they build one or three off the line from boeing or apache helicopters but then they want to the reassembled in japan it will cost them three times as much to buy off the line so the idea creating jobs and means lesser quality goods. they will be having a difficult time being sold anywhere outside of japan prime minister has taken on the role he is the best business development person in japan right now. to take up personal interest and he personally tried to push it through unsuccessful but that is a great effort to he also takes the

personal initiative to move the u.s. even though there is no indian requirement that they have, along way. it is not a good sign when your best guy is the prime minister he is other jobs and responsibilities japanese industries to take up again. on the cyberside dc voltage bias -- global denies with any government they have not had the shocks to the system the u.s. government has had that forces them to break down that cross agency cyber security requirements. there's also lack of funding for cybersecurity yes cyber

defense command but in general development of the defense side they are underfunded. i talked to the head of the previous head of the 20/20 olympics and 20 and said you arrived responsibility for cybersecurity? do you have any money for that quicks he said i don't. any authority? he said i don't. some folks were sponsored by a large nongovernment entity within japan looking at cybersecurity because they came to talk to us for transportation we had a great discussion and said what is your timeline? we are under contract we have to work up and tell that sense they said three months prior to the olympics so you're going to do a

study then drop by your sponsors? is that sense of urgency that to it is a national threat to be taken in seriously that is something that japan has not come to grips with yet. >> to his point i do think he made a good point that in japan i will submit that is the biggest detriment right now is a lack. with japan's industrial side to protect its intellectual property. only now has highly classified programs beginning to make their way into the japanese hopper just now coming in with the protocols with they are limited to programs with

u.s. involvement. and places where you have to get security clearance with this equipment so right now is a painful process having to clear people into our program this is no way to run this and we have to improve this. also a problem on the cyberside with the inability to address liability. or to address that legal liability holds back the japanese readiness for intelligence sharing and disaster response and in a place like japan is a disaster supermarket fixing those are important to the people of japan.

>> let's go on to the industrial challenges we will talk about problems and then i will offer solutions. as we talked about today are challenging activities co-production requires sharing manufacturing capabilities is a given and success of the initiatives depends on technology offered by the japanese the strength of their security program approved by the u.s. right now industry has little direct incentive. people are hinting around but if you are large and the japanese counterpart say we want to share their isn't much other than money to incentivize them so i tell my japanese friends i went to talk to lockheed martin or boeing but there's reason

because until they can share and protect and cooperate that insurers industrial security with sensitive intelligence they will not get any better. i can also tell you my clients are concerned about co-production activities. most of this is a hangover from the other side to western japan where intellectual property even from the supposed allies is quite common. any tampering or end user monitoring this is what they are coming to grips with i am not critical as it is all

new world and what they have to catch up so quickly they are challenges they're out there there's a role for the u.s. government to play third parties transfer will be challenging with. production environment to. internal problematic disconnects between anybody who has us say of what is shipped overseas continues to lack internal coordination know there are some shortcomings but there will be more of the asset process so japanese industry is not stymied at the first term talking to our friends six months ago obviously this is just no becoming as

important to japan to make sure you know, where your technology goes, what happens to it and for what purpose and then you make sure somehow it will not be used in pernicious ways contrary to your national interest. my u.s. colleagues tell me often the japanese partners want development read these before they know what they want to do. give us your stuff and we talk that is not the right approach but it is challenged to meet that technology security requirements. also those impediments to information sharing per car friend of the recent conference in japan came away with the symbol biggest problem is the impediments

for information sharing with japanese government. this is a bit off topic but needs to be in the back of people's minds of production to be pernicious to be the cool believe competitive defense industrial base. it is not capitalist, he does not inject capitalist discipline into the base and and tell that spirit comes it will be very tough to make a globally competitive products. >> so how do we fix some of these problems? >> with that but this

includes both but for those the views that our more expert i am told there is still quite a strain that is resistant to the same sorts of research and development to activities the other institutions would take. in some ways we have these industries losing out on the academic capabilities the u.s. tax but has some point it is important to bring that in and those academic institutions are important as well. obviously the need to do personnel clarence. -- clarendon a case by case

basis something needs to be put in place in terms of security clearance. . .