host: this week on "defense news ," a general on transforming nato, the state of science and technology, and how trump's business savvy will affect his presidency. global defense leaders recently visited norfolk, virginia, the unofficial nato home in the united states. the goal, to identify what the described as a modern approach to tackling the goals of the warsaw summit. i sat down with a general and asked him what that modern approach involved. describe -- the first bring is how we innovation with what we do.

innovation means we have been asked to -- many issues. effects, what we want to do. differently,ngs looking at the effect we want to achieve. this is the second part of this also -- we have many decisions that followed a short time adaptation. however, we are implementing short-term adaptations. the modern approach is we need to do that.

the implementations of decisions can lead me to do better in the future. this is the modern approach, just not focused on the output and how we implement. not looking to the future would be a big mistake. host: a phased approach to getting to the ultimate goal. sometimes when we say, we can try to define what we do in the future. people look at how do you change from now to this. no, we are not jumping directly to this future. we need to have some kind of provision. an incremental process, how we go from now to this 10 to 15 years in the future. host: so now you consider that there are nato members that are on the big range in terms of where they stand, and

around innovation, technological capabilities. how do you form a universal strategy forward when you have so many different member nations that are in different phases in terms of implementation? we have some transformation, and we see transformation is implementing the present, and this is what we do. we implement today in accordance with the decisions made, and shaping tomorrow, and bridge the two. that, we need to be sure that at least we share what are the objectives, what can we achieve. this is what we are discussing in your conference. afterwards, we propose nato to these nations. we have already done that. we have already star

are developing, we are already working with nations. the latest nations that joins us, new zealand, which is not a nato ally. leaders to a more cloudlike future. we envision this future with nations and then we discuss the incremental steps to that approach. this is an example of what we can do in all the other areas. can bet almost customized, you might say, by country. their requirements are capabilities. i would imagine their resources. >> this is a good question. yes, it is customized. thee are in agreements with objective, and the objective we have to redefine anyway.

if we have an argument for that, we can tailor our approach to each nation's capabilities. do that together, we will find solutions. we have wide-reaching multinational solutions that we can implement to tell one nation, look, you cannot do that on your own. for instance, what germany has put on the table, which is building a division. it is really difficult to ask many nato nations to have the division. the division is a huge force. some nations can do that, some nations know. i can -- i ensure the interoperability of it. this

is exactly the value, but for that, we need to see exactly what we need and how we group themselves to achieve the target. host: it almost enables a surge capability, in a sense. >> exactly. this is for me the value of nato and our alliance. we have many partners who are very committed. it's --can do, together, we are very strong. if we can combine our strengths together on this one, it's more -- host: you are watching "defense news." we were making a move. the dewe had to. made -- we knew that if we came in too high, it would cost us big time. we had to stay low.

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host: a big focus and transformation for nato involve technology and innovation. how do private companies effectively partner with a global alliance of nations, all of which have their own standards and requirements for purchasing? i asked the nato supreme allied commander for transformation how industry can support nato's expensive goals. >> yes. this is a question of what effect we need to achieve.

to define capabilities. today we focus on the appropriate effect. is how we can fix the problems we face today. partner with the industry to do that, because if we describe the effect to the -- the industry can ,ell us, in 5, 10, 15 years this is technology you can foresee. inform them, they need to inform us.

associate nations such as nato and the european union, why don't we partner together to develop these solutions. this is why it is so important that we engage the industry effects. we cannot engage the industry on the short-term rate on the short term there is a use competition. when we are talking about 10, 15 years, we can have this discussion. and we can do that with the traditional industry. we can do that with the nontraditional defense industry. we have the presence of ibm, many others. more and more we will rely on -- capabilities and platforms -- this is the case of the u.s. the

-- it if it is true for all the howraft and all the ship, we organize as architectures, we need to think architectures. we need to see how we manage this. and we find it not in the traditional defense industry but when you find a solution with ibm, boogle, -- google. i'm very pleased that they said yes, we are interested to work with you this morning. host: that's an interesting question, because i know the pentagon just in the united states alone has challenged engaging with these nontraditional players. government can be very challenging in terms of procurement and regulations, so you look at an organization like nato, how do you enable those companies to work seamlessly? gen. mercier:

advances. and how do we do that? it is our role now. think --our role to and put an effect on the table and advise the industry. and invite the industry in terms of, look, here is the problem. how do you think we can fix it in 10, 15 years? do more -- this is just a change of mindset. we have started doing this to choose a replacement with the radar.

we word requirements that describe what in 2035 we think surveillance and control is. now, do wen that need to do war gaming, test architectures, and associate the industry to do that. based on that, we will find the right solution, that more than likely will not only be one solution. host: wonderful. when we return, the pentagon's chief of science and technology. you're watching "defense news." >>

ast: the

engineering was confirmed at a time when innovation emerged as a top priority for the pentagon. and associate editor sat down to get an assessment on the state of science and technology at dod. >> the state is strong. we have had enormous support over the last few years, with a secretary with a phd in physics, an engineer at heart. at a strong team across the services driving our investment. i don't think we've had a period of time in recent history where technology has been so central to the discussion of the long-term strategic context as we have had in the last few years. host: it's interesting because -- >> we've all heard in the last couple of years, engineering, science and technology, prototyping things get cut for current demonstrated sounds like that hasn't necessarily happen the way people expected it to. >> i have been very

across the eight years of the obama administration, we have managed to preserve at an annualized dollar rate, our budget has been stable at $12.5 billion a year through a time period. science, technology isn't a variable cost, something you can squeeze with budget pressures, because we are investing in the future. shortchanging the future today will lead to enormous challenges later, and we have been able to maintain a long-term investment to create the future of the department. >> are you confident that as the obama administration at since -- january at the state of that the state of the research engineering foundation is strong enough to carry the pentagon to where it needs to be in the future? >> particularly after the efforts of the long-range recent development plan effort we did over the last two years, we looked 30 years out and asked what are the challenges departments are going to face, what allows us to respond to those challenges. the things we have

are not about politics or personalities. they really are about response to the global conditions, to the competition we see an military technology globally. i'm sure the next administration will change the names. i'm sure they will want to put their own spin on things. i think that core focus speed of delivery, maintaining our technological edge, strengthening the translation of her laboratories, searching for innovation anywhere we can find it, that has got to continue. to whatever mechanisms with whatever kind of branch we want to put on it, i'm sure they will come back to that same set of core values. >> the ideas will stay. >> i'm not a fan of the third offset brand. the idea is at the heart of it -- let's ask about personnel. when of the issues we hear a lot about across government generally is how do we get young people to come in, especially for these technical jobs.

forward? what can the pentagon do to make that easy? >> it is an arm's concern. -- an enormous concern. i strongly feel that in critical areas, computer science, cyber security, emerging areas like biotechnology, we are in direct competition with the commercial sector for key talent. i want a+ players helping to shape our future and we want to be able to recruit and train them. we things i'm excited about, are doubling down on our smart scholarship program which attracts undergraduates and graduate students with a scholarship for service program. we will reimburse folks for their college education but they are committed to spending a period of time in the defense laboratory on graduation. students whothose enter those programs want to work on our problems and stay long after their

commitment. we have been recruiting from schools that would not normally send students to us through that program. while there's a lot of concern about some of the pieces of nda, one thing i am positively excited about is the personnel provisions which allow us to hire a limited number, 100 and change, top scientists and engineers a year and pay them the salary well above the top executive level. that is entry-level compared to what google, apple are offering people. it is not asking people to take this anonymous cut.people who are committed to service and who want to serve have to think about the welfare of their families. the last thing is direct higher authority. us,ave had that extended to which will allow me to go and talk to somebody and make a job offer on the spot, not invite them to submit a resume to a government system and get an answer 6 months later. that allows compete for talent. >>

start using that type of authority? we have had some limited authorities under those areas before. is just based on budget availability. if the 17 is on the hill that is approved, the resources are there for the smart expansion. of the personal authorities already starting in the groundwork with pnr to make sure they can work quickly. i've got this optimism that we can move fast once we have the authority. >> and this week's "money minute," a kernel -- personal finance expert offers tips on the advantages of using a mobile wallet. >> i'm here with the assistant vice president of digital communication at navy federal credit union. here to tell us about mobile wallets and why we should use one. welcome. what exactly is a mobile wallet? >> a smart phone apps where you can store debit and credit card

>> how does it work? >> instead of pulling out your card at a retailer, you simply tout your phone to the point-of-sale transaction and authenticate to make the transaction. >> a lot of people think it's just as easy to pull your card out and swipe it at the register. >> a big reason to use it is the security. the card information is never stored on the device,> nor is t given to the retailer. it is much more secure than a normal transaction. because you authenticate each time, we always know it's you. >> can anyone with a mobile device use a mobile wallet? >> most mobile phones have the capability or soon will could you might want to check with your financial institution just to make sure they support it. >> when we return, how time was of the essence and i who was this guy? . what were his intentions? do you do the yoga? n-no, no sir you ever wanna dance on a reality tv show? i like to dance..... dad, come on. joining my family means he can join navy federal credit union. great rates, 24/7 support.

they take good care of you. enough with the questions. he's harmless. open to the armed forces, the dod and their families. navy federal credit union. host: there's been a lot of discussion about how president-elect donald trump will enter the oval office without direct experience in politics. but

corporate mogul influence him as commander-in-chief? "defense news" managing editor sebastian springer sat down with former defense department controller and booz allen fellow, bobtail, and asked whether business savvy might serve him well. >> i think the private sector attitude is useful, and it brings with it a sense of trying to improve the processes there, which i think can potentially save money. i think he also needs to keep in mind that dod is different in some important ways than a private business. 500 35 thing, it has members on its board of directors and members of congress sometimes have -- they are serving their constituents interests and it doesn't always make it easy to run dod like a business. its mission is unique, when something goes wrong in national security, you have to enter the market if you want to call it that. it doesn't have a choice. many companies have their clients shooting at them.

i think there's also some important differences, you won't be able to run dod strictly like a business. >> i assume that a cries -- applies across the board to public sector, running the public sector and private sector? >> i've had more experience with dod. i would say yes, although the department of defense may be particularly unique in terms of its commitment to national security, as i mentioned. there is a threat to national security, he will have to be there. there may be a little more opportunity for choice in other agencies. >> what are the main structural reforms that need to happen fairly quickly, in your opinion? isfirst off, i think reform a continuous process. there were a number of successes in the obama administration. i think the key for the new administration will be to pick an

published a paper from the center for new american security post. i tried to give some of my ideas. one of them, we need more realistic and stable budgets. that requires a broad budget deal, which the president-elect is talking about, that would help a great deal. he goes further than business reform or helping business reform is necessary in many ways, but it would also help business reform. i will give one other example that i think is a highly visible and contentious one, and that is eliminating excess infrastructure. dod says it has 22% to much infrastructure and can save at least $2 billion a year by eliminating some of it, to eliminate the infrastructure you need realignment, closure authority. congress has turned it down 5 times. i hope this next administration continues to pursue it and perhaps with a republican in the white house and republican congress, they will have more success in getting the le

that is two of them. >> heavy dynamics changed in your view that would make it more likely -- have the dynamics changed in her view that would make it more likely? >> now you have a republican president and congress and a president who said he wants to find ways to hold down cost. the other reason congress may be running out of reasons to say no, the department of defense has tried to respond to some of the legitimate concerns congress had. and, hopefully the combination of that, and support from the news secretary of defense, new president will get -- over the finish line. of all the reforms dod could do, it is probably the one that has the potential to save the most money. $2 billion a year, a small percentage of the budget, but it's a huge amount of money and it continues in perpetuity. you mentioneport what you want continued focus to lie on

this has been something the defense department has been after for a long time. why is it so important in your view to continue that? >> i think audit is important for a number of reasons. one, the log requires it. two, get better financial information from the department of defense. one reason why that was important, dod to continue the audit efforts, i would say it in two words -- public confidence. i don't think that dod can't pass and audit -- an audit. i'm hopeful that they will continue the effort, even though it is taking a good deal of time. course, the question is, you speak of confidence. donald trump himself hasn't fully disclosed all his financial positions. a much

in him pushing that through it? >> i will leave that to donald trump and the american voters. i think from the standpoint of a federal agency like dod, you have got to convince the public that you are spending the money. and i think they are, for the most part. any reasonably effective manner. absence of an audit, the ability to pass an audit, is very harmful to public confidence in dod. i think that's the main reason they should continue it. >> what has surprised you the most about how hard it is? thingl, i think the main is the business processes. there are two major problems, one of the systems. most of them are getting fixed so they do the things that auditors required to get a clean opinion. they are also business processes, similar, easy to fix. dod was

sometimes, not getting people off the computer rolls. they had access to systems they shouldn't. some of them are very hard to fix. some of those have been surprisingly difficult to fix, and probably one of the main reasons it's taking longer than i had hoped. host: that's all this week at "defense news." the sure to join us next week, when we will bring you more from stephen welby. fork out defensenews.com all the latest news on the defense industry. base for joining us. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy.

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