tv Politics and Public Policy Today CSPAN April 5, 2016 3:00pm-5:01pm EDT
the tsd, trilateral security dialogue. and things as andrew will tell you have really just accelerated from there. what andrew is going to present to you is based on his work on this area for about two decades, including the tsd, including the qadry lateral response to the boxing day tsunami and more recent work in the australian government, and i think it broadly reflects strategic thinking on both sides of the aisle in the u.s. and japan. but i should emphasize that andrew's paper is his paper. also that bob scher is here to comment, to give us the state of play in current u.s. policy, not necessarily to endorse this report. we often have court administration officials comment when we issue the reports, usually polite enough to not say we're already doing that.
usually polite enough not to say, this is the dumbest thing i've heard. it's usually somewhere in the middle. it gives us context for understanding what the government is doing, thinking about and what opportunities there are going forward. we will hear from andrew and then comments from bob. then we will open it up for your questions. thank you. andrew? >> thank you very much. thank you everyone for coming along today. i really would like to thank mike and csis for the opportunity to spend time here. i have old friends here. it's fantastic to be back here as a visiting fellow the last few months. i would also like to thank bob for coming along. bob likewise is a very longstanding friend. it's very good of you to give us your time. we know how busy you are. finally, i would like to thank the folks who reviewed my paper and gave me some really good feedback and probably saved me from some errors, if there are errors left there, then they are mine, not theirs.
i just want to take -- pick up from where mike set things up. the starting point for this project really is the work that csis has been doing on federated defense. and this is the idea that the best way to respond to a changing and in many ways a deteriorating international security situation in an environment when we are all increasingly resource constrained is to integrate our defense capabilities much better in the interests of a set of -- in the interests of some very substantial long-term shared aspirations and interests in our countries. and in particular, when it comes to the asia pacific, to respond to what i think is a rapidly growing series of challenges. some of these of a trans-national nature.
things like piracy and responding to humanitarian disasters. mike mentioned the december 2004 tsunami. but there was the japanese tsunami earthquake disaster, of course, as well. and there will be much more of that. and then we're also seeing, i think, undeniably, increasing tensions in the region. in the south china sea, for example, we're seeing a more -- more active russian posture with russia modernizing its pacific fleet and bringing some very capable submarines, for example, into the mix. and then you've got a very unpredictable nuclear armed dictator in north korea, of course. so i think an undeniably deteriorating regional security environment, particularly in
maritime asia. and then perhaps driven by some of these trends, the proliferation of some very sophisticated weapons systems throughout the region. china is a big part of that and russia as i mentioned. but we're also seeing an increasing number of countries acquire precision cruise and ballistic missiles, for example. new intelligence surveillance reconnaissance capabilities, electronic warfare capabilities. and cyber capabilities and, yes, submarines that are starting to change the balance of power in asia and make it much more difficult for the united states and its allies to operate in the region in the way that they traditionally have. this challenge has a raw quantity of dimensions in terms
of the number of modern weapons and platforms that are in the region now and will be in the region in the future. but also a dimension in the sense we're seeing the introduction of new capabilities that are changing the strategic landscape. they are the things i mentioned earlier. at the same time, of course, we're all resource constrained at the moment. budget cuts mean that the size of the u.s. navy, for example, has been falling. other countries in the region are not spending massive amounts on defense. although, australia and japan have committed to increase spending, particularly on maritime capability. generally, we're seeing a reduction in the resources of the u.s. and its potential coalition partners and an increase overall. so the task of managing this challenge and monitoring it is becoming greater. then as i said, we're seeing gaps in capability.
notwithstanding the u.s. rebalance, there are limits to resources in terms of humanitarian assistance, in terms of amphibious capability, in terms of assets, undersea assets. the u.s. attack submarine fleet actually around the mid 2020s will start to get smaller, not larger, for example. and gaps in cyber, missile defense and maritime security more broadly. for that reason, i really chose to focus my paper on maritime security and how we can take the framework of federated defense and start to actualize it in terms of real capability. in the region. then i narrowed it down to japan and australia for a few key reasons. one is the policy framework that mike mentioned, strengthening cooperation among those countries has been established
policy for a very long time. i also chose those countries because they're probably the united states' two most capable maritime partners in the region. and when we're looking to achieve the sorts of strategic affects that i'm talking about in the paper, including deterrents and the capacity to reassure allies, you need high end partners. you need to collaborate in southeast asia and china. but to build integrated high-end capability, you need to start with the most capable partners. then australia and japan have both themselves been shifting their defense policies in the direction of more emphasis on maritime security and both of them have a stated commitment to increase their maritime capabilities. so they're already highly capable partners and they're going to become i think it's fair to say even more capable
partners over the next ten to 20 years. now the submarine piece of this equation is the one that generates all the excitement, of course. there's no doubt that c-1000, which is australia's program to replace the current collins class fleet is one very important opportunity to strengthen maritime cooperation between these three countries. there's no question of that. but this agenda is much broader than just the submarine piece. and the last chapter of the report really is an attempt to draw out an action plan that hopefully will encourage officials -- i'm keen to hear from bob about this -- in the right direction as i see it. and that is to start making some of these more networked, more integrated capabilities real. a critical part is to start around isr and networks our
intelligence, surveillance, reconnaissance capabilities much more effectively. in particular, to build a shared picture of what's happening in the maritime environment, because we know from our time in government that when governments share a common appreciation of the strategic environment, they're more likely to act in concerted ways in pursuit of shared interested. here i'm talking really about things like networking our maritime surveillance aircraft, u.s. and australian and japanese, unmanned items and also i think potentially cooperation in radar where each of our countries have sophisticated technological
skills and systems in place already. then there's the undersea part of this. undersea warfare is going to become increasingly important in the asia pacific. again, everyone talks about submarines. more important is anti-submarine warfare. certainly in the australian case i think it's fair to say that the asw skills have not had the attention that they used to get during the cold war. we have had other priorities. we need to start rebuilding those capabilities in australia and here again i think the networking potential and our ability to leverage australia's geography, japan's geography, create a web of integrated asw capabilities that can take some of the load off of u.s. resources, which are going to be increasingly stretched by this picture that i've tried to set out in the paper.
when it comes to submarines, of course, this is an australian decision. it's going to be a very consequential decision, indeed. it will shape our force structure and the options that are available to australian governments for decades. hints, i guess, that the level of excitement around the decision making. it's also, of course, a massive commercial opportunity. i think it's the largest sort of openly available defense industry contract that's on the world market at the moment. the successful partner will, obviously, gain huge key does kudos when it comes to building conventional submarines. so the stakes are very high. the point i would make there and in the paper and in other things i've written, including with mike, i've been very careful to say when it comes to assessing the key capabilities that the different partners bring to the
table and also things like cost and schedule and risk and so forth, all sorts of things that should be under consideration, i'm not taking a position on that. the point i make in the paper though and more generally is that partnering with japan and the united states on submarines is a potential game changer at different levels. at the strategic level, it can have the effect, i believe, of imbedding japan more in a regional security architecture that can help to allay japan's strategic anxiety and that's a good thing. that's a stabilizing thing to do, i believe. at the operational level, a fleet of interoperable submarines can have more impact
and can deal both with the quantitative and quality challenge in terms of increasing capabilities in the region. the defense industry part of this is incredibly important too. supporting japan's efforts to expand its defense industry and the international dimension is incredibly important in terms of locking in japan to a broader regional security architecture. for those reasons, i think it's undeniable that there is a strategic dimension to the submarine decision and those factors should feature in that decision. capability cooperation in the submarine project is a good example is a really important area for the three countries to work in. i say in the paper we should think about combined capability when strategic requirements are being formulated and at all stages through the capability
acquisition process. that's a way to reduce inefficiencies, reduce duplication and drive interoperability. someone said amateurs talk about strategy and professionals talk about logistics. i think it's undeniable when you look at some of the checkpoints in terms of, for example, precision guided munitions for coalition operations in the region, that if we integrate our logistics chain much more look at things like common stockpiles of munitions, mutual supply and prepositioning and also working together on sustainment of our systems, particularly if we can move in the direction of more shared systems and platforms, there would be enormous benefits there. amphibious capability, australia
and japan are both building their own amphibious capability. i think it's fair to say it's early days in both cases. this is where working with the u.s. marine corps is so incredibly important for us as we build that capability and where the u.s. marine rotations come into play. that's massively important. this should be a two-way street. for example, when you read about the shortage of strategic sea lift that could constrain u.s. amphibious operations in the region, we should be very ambitious here and we should look at building the capability to deploy u.s. marines and their vehicles and weapons and aircraft off an australian platform, one of our large 27,000 ton amphibious ships, for example, or a japanese vessel for that matter. and generating a pooled amphibious lift capability that
can work across the region on problems as diverse as humanitarian responses through to stabilizization operations and so forth. just a few other quick things before i wrap up and hand over to bob. the trilateral machinery as mike mentioned has been in place for a long time now. i say in the paper that i think it needs to be updated. we have a defense -- security and defense cooperation forum which is an analog to the trilateral dialogue. i recommend that be upgraded to the deputy second level to cut through in the three systems. there should be working groups in areas i mentioned this morning to take forward individual initiatives in that framework.
i think we also need to bring india in. india is an incredibly important potential partner for australia, for japan and for the united states. and we should do that, i think, at a pace that is comfortable for india. but if you look in particular at areas like isr and anti-submarine warfare, then i think india has a huge role to play. and there are some real synergies in particular with australia's strategic geography. lastly, of course, we do need to continue to engage china. we already do trilateral exercises. i think there's scope for more of that. we need to work with them on hhdr and counter-piracy and build up habits of working together and cooperation, because that will create greater transparency and hopefully greater confidence. i will leave it there and hand it over to bob. >> so i'm very happy to be here
to discuss this paper. it's not just because andrew and mike are old friends and colleagues. i would do it for that regardless of what's in the paper. but also because i really do applaud efforts to continue to examine how we in the united states with our friends, but particularly with our allies, how we work together to promote and defend our interests in this key region of asia. this is a paper that looks to do that. and it was well worth the time, even on the weekend, to take a quick look at the paper and give you thoughts and impressions and about how that fits into the way we think about our policy toward asia at large. as i real the paper, there really are two key premises. i think they're worth pointing out and are all to the good. one, we in the united states and with our allies as well have to be able to adapt our longstanding alliance system that used to be predominantly, if not in some cases solely, a
hub and spoke system. i think andrew points this out. the federated process -- the systems that csis is looking at. while hub and spoke was the predominant nature of our relationships in asia, it can't be the only way we look at it. i do think that we haven't only looked at that as the way for many years spanning a number of administrations. but that we have to continue that progress. also the second premise, if you will, is that maritime issues are and will continue to be critical to the prosperity of asia. it goes without saying, but nonetheless it's worth pointing out. looking at a map, you have a hard time -- don't have a hard time understanding why maritime issues are so important for asia for security and prosperity. if you put these two together, it was an easy sell for me to
take a look at ideas about how we could increase trilateral cooperation and that alliance network and focus that on maritime issues. let me deal with each of those a little bit more detail from my perspective. first, the idea of increasing multilateral cooperation and doing so with our most capable allies and doing that together. it's on the face of it makes sense. these are two allies with which -- with whom we work very closely. we have very good interoperability with them. why wouldn't we look to seize opportunities where they exist to work together? that wasn't always the case. and that wasn't even -- when that was the case, we didn't always jump on that. but i think in today's world, not just because of budget issues but certainly i think
that's the way to go. in fact, i think that's -- i will jump ahead to a quote i was going to use later. before the president went out to asia late last year, one of the lines in the fax sheet, if you will, is the following. our priority is to strengthen cooperation among our partners, leveraging their significant and growing capabilities to build a network of like-minded states that sustains and strengthens a rules based regional order and addresses regional and global challenges. couldn't have said it better myself. i might have. i don't know. nonetheless, that is -- as a principal, this all makes perfect sense and it's something we need to continue to look at. we really need to look at developing new patterns of cooperation. how can we get our friends, our allies to think about things not just in that hub and spoke process but looking to work more together? i would argue the united states wasn't the largest proponent of the hub and spoke system, but we were willing to work with our friends and allies that way when that was most appropriate and when that was what they were looking for as we emerge and as a new security environment
develops and allies become more capable, friends become more capable, we need to look for other ways of doing this. and trilateral cooperation is a key piece of that. we are doing a lot in large multilateral forum. you have seen around, the esa, all of the other large multilateral forums. those are, in fact, i think important pieces of our foreign poll six it's one of the things we have done and put an emphasis on during the obama administration. that, however, does not mean that those are the only way to do things or the best ways to cooperate in all cases. i think as you look at some of the more advanced capabilities, those are not yet ready for all of that activity. so we need to look at see where we can have those combination of friends and allies and where -- with what missions, what capabilities will be the most
profitable and be flexible. asia has the advantage and disadvantage of not having a set in stone very clear multilateral forum. we should take advantage of that where we need to and try to build on it where we think it's not a strength of our relationships. second, maritime security is absolutely one of the key issues. it's a right one to focus on. it's a critical domain to our security. to the security of the united states, to our allies, to our friends, the region at all. it's for economic prosperity for all of those. what's interesting as we look in the security environment is that we can no longer assume as we had for i would argue many years that the maritime domain will go uncontested. so understanding that as a premise, we need to look to like-minded nations of how we
can best ensure the security of the global commons, the ability to operate in and through the maritime domain as we have done and as has benefitted the united states, our allies and the region for decades. so australia and japan are obvious first choices for this. for reasons that we have all talked about. i do think that there are other countries that are capable of doing this and i think we should look to that in the future. india, korea, singapore are some of the first that come to mind. but i do think that with the clear shared interests and the shared view of the opportunity and the security challenges in the region, australia and japan make sense to be the right places to start. this is true given what japan has recently done and with the abe government has done to push a view of japan's security that is beyond its near borders and understanding that it's a broader perspective that they can be a participant in. we should explore these ideas and look at them.
i look forward to looking at andrew's paper in greater depth. i'm sure others will do that. to the particular recommendations. but i'm in no position now and i don't think anybody would want me to sort of say this is the right thing or this isn't. i do think it's -- what it means is it's well worth looking at. as i said, it fits into our overall policy. i would say that arguably the thing that i would ask us to look at as we look at this -- these proposals, i think the areas are about right. isr is a big one. undersea is a big one. amphibious capabilities, other capabilities and logistics, these are all good areas to be examining in greater depth. what i think we need to do with the rebalance as we move forward -- i guess what i would recommend to a follow on administration is to continue the operations that we're doing, continue the ways we're looking at things now. but also look at what we can do together. what missions, operations.
it shouldn't be about where we are. it shouldn't just be about what capabilities we bring. it shouldn't just be about what our -- enhancing our allies and friends. it shouldn't just be about geographically distributed and politically sustainable. don't get me wrong. it should be about all those things. you have heard them. you have heard them continue to be said. one of the things about government is you get to repeat yourself and maybe eventually someone will believe that you mean it. we will continue to say those things. we also need to talk about for what. for what are we doing all these things? why are we looking to cooperate on a range of issues? why are we putting our best technology forward into the pacific? we're doing it for reasons, so we can work on things together. some of these things will be at the high end. some of these things will be at the lower end. we shouldn't forget any of those pieces. making sure that we are better as unilaterally from the u.s.
with our allies and then broader with the set of allies and friends in doing operations that span from humanitarian assistance to disaster relief all the way up to ensuring the maritime, cyber, space domains and global commons are able to be operated in freely. all of those things we should look for cooperation and should be able to focus on what we're doing next. it will always be with our asian allies that we will see this. because this is where -- you have heard these things. i won't repeat the statistics. this is where our interests are intertwined. given that, those are the things that i think this fits right in. i really do thank andrew for inviting me to be here, i say that before the questions and answers -- and to look at this early on. i think the premise makes perfect sense. we need to take a look at what things bright people are thinking about elsewhere. thank you. >> terrific. thank you both. let me start the questions and we will open it up.
i think in andrew's presentation, you heard how much australia could benefit from this in terms of bringing up the royal australian navy, perhaps getting greater security dynamics in north asia. there are going to be enormous advantages in this kind of agenda for the u.s. japan alliance as well. i think our japanese allies will see what alliances look like when operating globally, when you have integration of senior level commands and staff. not a joint and combined command like nato, but much more trust and integration on an individual level across different commands, intelligence sharing. i think there's going to be an open window for both alliances. not just the australia and japan side and starting to see what
the gold standard is in various areas. that's a huge advantage. i like, bob, that you put this in a context as did andrew, the u.s. and japan and australia and in particular japan and australia have been cooperating on regional architecture since -- for those of you you know, apec and various early architectural innovations. a lot came out of japan and australia. it was japan and australia telling us to keep our act together and keeping us focused. that larger context really drives this. let me first ask each -- andrew, the japan, australia security cooperation is 100 years old plus. right about this time 100 years ago if i'm remembering history, japan and australia were sinking
submarines in the mediterranean. the japanese navy got the troops there. so there's a long history with an obvious interruption. my sense is in australia, particularly since 15, 20 years ago, views towards japan shifted considerably in a positive direction. on the other hand, beijing is very clearly opposed to anything like this, even if it involves building regional capacity for humanitarian exercise relief. from china's perspective, this isn't our intention in three allied capitals, from the chinese perspective, that's window dressing for a containment strategy. i would expect that chinese official criticism of trilateralism with japan and
korea and so forth will increase. i guess my question is is canberra ready for the heat? reading the defense white paper, it sounds like the answer is yes. if you could give the washington audience a flavor about how you do this while at the same time maintaining relations with china. >> sure. thank you, bob, for that context. that's absolutely right. as mike says, our partnership with japan goes back a very long way, indeed. in fact, it's interesting. going back to the formation, it was done through the lens of what had happened with japan. and it was when we had the security guarantee provided that australia felt ready to sign a
commerce agreement as early as the mid 1950s, which shows you how quickly australia was -- as our foreign minister said, was prepared to move on and see the potential in the relationship with japan. really, that relationship is incredibly important, because australia provided the raw materials that drove the japanese boom and created so much of the asian economic miracle. our strategic relationship with japan came later. we have partnered very closely with japan on economics and increasingly in terms of regional diplomacy and building this sort of architecture in the region that mike outlined. but i think it was really only when we worked with japan in
southern iraq in the mid 2000s that the strategic potential of the relationship started to become clear, particularly in tokyo. i think australians are seen that for a while and were keen to move in that direction. but for experience of working with the adf and building that level of trust with the adf and seeing how closely the adf was integrated into the way the u.s. military works was powerful in terms of tokyo's thinking. since then, we've seen extraordinary development. there's a logistics agreement to facilitate more exercises and operations in each country so the architecture of the relationship between australia and japan has come on in leaps and bounds. now finally, of course, i think just a few years ago most of us in this room would have thought it unthinkable that japan would be a potential international partner for australia's future submarines. a massive amount of development
there. then, of course, there's the china piece. as i said, this paper is about maritime security in asia. it talks about russia and it talks about korea. it's inescapable that china's military modernization program, the anti-axis area denial capabilities its building, the south china sea, china say driver of what's happening in our region. i don't think they should be seen as containment. containment is not actually possible if you look at the degree of economic interdependence between our countries, even if anyone wanted it. this is about increasing, if you like, the pool of capability to respond to a lot of different contingencies as bob said. that should be in the interest
of the region, including china. the other point i would make is that i do think there is a deterrent piece to this. as work that csis and other institutions have done and is recognized in u.s. government documents, that the balance of power in maritime asia is shifting. it's shifting in an unfavorable direction. we need more high level capability to sustain a favorable balance of power and ultimately a peaceful and stable region that is underpinned by open economic institutions and respect for core principals like freedom of navigation. that's the end point. that's the prize. those have been the pillars of prosperity in the asia pacific for 70 years and what we're interested in here i think what everyone is interested in should be the next 70 years.
>> most of these questions i think will fly to andrew. let me ask you one, bob, before we open it up. you mentioned a range of areas from diplomacy to surveillance and so forth. can you say a little bit about our initiatives? it seems to me by design probably, but we're creating a new forced posture in the pacific that links our alliances, in the sense that, for example, marines will go to okinawa and as part of the rotation they will do time in darwin. so there's that connection as well. maybe you can tell our audience more about where that's heading. >> certainly. we have had this sort of tag line if you will for an awful long period of time of politically sustainable and operationally resilient. it's repeated not just because we're comfortable with it but
because it represents what we're trying to do in terms of posture within the region. if you think about a number of years ago, you would have said our posture is -- you would equate our posture with our footprint. you would say it's in northeast asia. you wouldn't have been too far off. while that might have been overly simplistic, it wouldn't have been wrong. this is stuff that ideas that were started across multiple administrations, but to take a look and see what we could do to do a better job of understanding that we had interests far beyond just northeast asia, that we needed to look about how we could distribute our posture and operate effectively with friends and allies from northeast asia through southeast asia and into the indian ocean. in order to do that, you have to have the agreement, the exercises with the countries. so we started that. we continued that effort in the obama administration.
i think what you have seen, we have some things that we point to a fair bit. we will continue to point to it. some longstanding ones in singapore of how we operated with the support of the government of singapore. you will see some of the australia piece that we have done in terms of expanding our cooperation and our ability to operate with australian forces from northern territories of australia, particularly air force and navy. we have done a fair bit in the philippines and gotten to the point where we can have more rotational basis. this links together to say that it's important that we be able to operate with friends and allies and operate relatively seamlessly with them across and around the region, not just in northeast asia. this really -- again, i really do think that -- i think a lot of people who work on europe a
lot and come into asia think it's a down side, that there is no clear regional architecture like nato. i understand why they do that. i now have to spend a lot of time in europe. i have come to appreciate the nato alliance in a way i hadn't before. it's so hard not to respond. but i also think there are clear advantages to having a more flexible process whereby you don't have to get the agreement of all 28 nations if you will in europe to do anything. that is by being able to work with countries that you share similar interests and take advantage of those. then you can build on that. i think we have looked to put our posture in a context of not just being places but doing things, but in order to do things with other countries and do things around the region, we to have that posture. the big piece -- the distributed
sort of network of our marines coming off of okinawa leaving obviously critical pieces in okinawa, but then also being operated in guam and being able to really have that ability to operate with other countries wherever we think we need to is really the key advantage of this distributed posture. if i may, one thing which i will -- as the u.s. government official up here, i feel compelled to say that while there is a changing balance of military power in the asia region, i still feel extraordinarily comfortable with the way it is now. obviously, we need to continue to track it. we need to make sure we and all allies can operate in any and all environments with the best technology that we have and in operational ways that are relevant and are able to -- we're able to secure our interests. but it's not just about numbers, as the paper points out. it's about capabilities. i do feel the need to say that
i'm not willing to accept the trends are inevitable. i feel very good about our capabilities unilaterally but also i feel better about it when i think about our capabilities with allies and friends. >> good. same question to you, andrew. >> when you look at the u.s. force posture agenda which bob outlined very well and particularly doing things not just being places, i think what comes through very strongly is a shift in emphasis towards southeast asia. wouldn't surprise anyone that we think that's a good thing in australia and we support the rebalance and what the u.s. administration has been trying to achieve with it. i think as i say in the paper, australia is becoming increasingly important in this context. i mean, yes, as a capability
partner but also just because of our strategic geography. so, for example, the marine presence is important for the kind of capability building reasons that i mentioned a little earlier. and i think it has a wider regional importance. if you look at it, i actually think that the air force part of the u.s. force posture initiatives in australia, the capacity for northern australia to accept increasingly large rotations of u.s. long range aircraft, including isr platforms and bombers and so forth, is ultimately more strategically significant even than the marine piece. then i think the potential for u.s. navy rotations from the west coast of australia will grow, too, as the strategic importance of the indian ocean continues to rise. i think you are going to see australia become more important in a forced posture sense.
in the report i talk about this concept of australia as a sanctuary but also a springboard in terms of our access to some very critical real estate, including some of the maritime check points in southeast asia and out into the eastern indian ocean, approach to southeast asia. here i think the sort of isr cooperation between australia and potentially india could be very important and some work together in anti-submarine warfare as well. >> thank you. you will find in the report on page 30 a very useful map that shows where some of the critical points are in maritime asia and how the geography bear on that. why don't we open it up. identify yourself and keep it short.
>> i was with the state department primarily. the last 15 years, the policy of japan, australia, cooperation has made tremendous progress. mike was in the nsc. the policy level, the architecture, there seems to me we got to the point, particularly in terms of responding to china -- i don't mind using the containment word. i think that's what we are about. but put ing that aside, we got to the point where the rubber needs to meet the road now in terms of capabilities. i agree fully with your report. you have outlined exactly what needs to be done in terms of the networking integration of capabilities that are needed to get the force multiplier effect that we need, because we all have limited resources. but the context of the rubber meeting the road or not to me now, the issue before us is the submarine program. strategically, you have outlined the issues very well.
but how confident are you that australian government will make what i would say is the correct decision on this in terms of the strategic and the operatability and relationship between our three forces? i can't see the germans and the french caring that much about the south china sea and east china sea that they will have the follow-up capabilities. how confident are you the decisions will be made for the right reasons? >> thanks, kevin, for the question. the first thing i would say is that i'm not privy to the competitive process within the defense department at the moment. i had a hand in establishing the process and each of the international partners have expressed their support for the process. they like it. they think it's a good robust process.
i think that's incredibly important. this is a $50 billion acquisition up front and probably another $100 billion plus going forward for sustainment. absolutely huge for australia. just a big project full stop. i'm not, because i'm not privy to the inside of the process, i'm not going to comment on the relative merits of technically if the japanese or german or french submissions, i'm not in position to and it's not my job to. that's for defense. what i can say, though, is that if the capability can be modified to the minimum extent possible to meet australia's strategic requirements and that particularly applies to range, and if the japanese proposal is solid on cost and schedule and
if it's the best way to mitigate the risks that we have experienced with the cullins class submarine, then i think the strategic logic of going with the japanese is compelling, and i as an australian taxpayer, and someone who worked in the australian government, i have no reason at all to believe that the process won't explore those issues in great detail with great professionalism and i very much hope and would expect serious, sensible decision just because of its importance for future generations. so i think that would be my answer. >> i'm certainly not going to be in a position to judge it, the outcome.
i just, i think what i understand is spot-on. so there are a lot of variables that are, you know, beyond my ability to judge in terms of technology and cost and andrew didn't mention but you're aware of industrial participation and labor relations. there's a lot to this. i actually did my dissertation on these kinds of decisions and how they affect alliances. when you are talking about this much technology and this much strategic capability, these are of historic consequence in terms of the direction or trajectory of a country's defense policy and foreign policy. so it's not surprising it's under the magnifying glass in tokyo and around the world. you see articles in the financial times and so forth. the u.s. has to stay neutral of course because we have three allies competing with whom we operate at sea. but i think when you control for or set aside for the moment all of the important technical, industrial and other decisions, it is striking to a lot of
people here at least that one of the submarines under discussion operates in the waters of the pacific, and the industrial base and foreign policy of that government is committed to exactly the same strategic objectives in that region. and as i understand it, the bid made it clear that there would be some consideration of these strategic factors. so it's not surprising the u.s. government has to be quite careful on this, but the nice thing about being out of government, of course, is you can sort of opine based on what we have seen of the dynamics in the region. i assume you don't want to answer this? >> just given the elephant in the room to prejudge or predict any other questions are coming,
let's be clear the united states doesn't take a position on this except for the fact this is a sovereign decision of the government of australia to make the best decision they think is possible. i certainly expect and hope all the considerations mike and andrew have laid out and everyone else has laid out would be part of that decision but in terms of whether or not we have a position, the only position is that we will work with whatev front. >> freedom was rightly mentioned as a principle, which begs the principle, whose freedom of navigation? in other words, how do we help guarantee vietnam and the philippines to the right of freedom of navigation in their own exclusive economic zones, fishing, seabed mining, that type of thing? >> thanks, chip. bob might have something to say about this, too. and it's an excellent question.
i think part of it is that, as we know, these countries have limitations on their own capabilities to basically enforce their own interests and their own legal rights, consistent with. i think one thing that's started in this area is building up their capabilityies starting wih coast guard capabilities to monitor the type of problems you mentioned around fishing and so forth. i know that the united states has gifted a couple of retired coast guard cutters, i think, to the philippines. it's interesting. australia has done something similar with malaysia. tour boats have been gifted to malays
malaysia. i think what you mentioned is a particularly good case where strategic cooperation is to kick in and, i think, already has, frankly. so rather than sort of duplicating and sort of having an uncoordinated approach to this, we have a shared agreement of what these countries really need, how we can best help them get there and do it most efficiently. thas that's, to my mind, a good, practical example of the sort of cooperation i'm talking about. >> the actual. >> it's not as complex as sometimes it's made out to be. nonetheless it's a difficult situation. it's one of the reasons we hope everyone will look at the right
venue to deal with these disputes. any dispute resolution that could be going on that the case that the philippines brought, we'll live by whatever answer the international tribunal comes forward with. all of that is immaterial, i would argue, to the fact that every country who has a maritime boundary deserves to be able to address threats within it, and deal with it and be able to do its rightful positions regardless of what you believe the territorial waters are. that's really where we've been focused is on the capabilities piece. obviously, other folks are dealing with the diplomacy. we have spent a lot of time working with our friends and allies who we could help with capabilities. we have -- some of this is arms sales. some of this is gifts and some of this you have seen on the
hill. making sure every country has the capability to do what is within its rights and, in fact, what responsibilities within the international environment. the core answer, i would argue, is freedom of navigation for everyone. it's something we've all lived by. it's something that is critically important, to figure out how we can best maintain and why -- and continue to do demonstrate and show, as well as argue, that it's in everybody's interest in the region for that. we may well have, in the coming months, decision in ash traiks trags in the philippines case.
many experts think it will be unfavorable for beijing. and the chinese side is unlikely to accept it. and may take action to demonstrate. this is a hypothetical so you're off the hook, bob. how would this manifest itself in this scenario? a 50/50 prospect, looking at it today. >> i guess i'm on the hook because i'm not an official. >> yeah. welcome to the nfl. >> i think that the way the rules of the region are shaped now is incredibly important, given the trajectory the region seems to be on. it's better that the rules are established now than at a point when things are more out of hand
down the road. so, it's very important. i think the initial point is that there needs to be a very strongly concerted diplomatic piece that comes in, in support of international rules, the international rules based order in this case. obviously, the region has a massive stake. australia, for example, is an exporting country. and 60% of our trade passes through the south china sea. it's vital to us nationally. as bob be said very eloquently and mike has also said, the freedom of navigation is just incredibly important to us all. it's not just the region. sometimes our european friends probably need to stand up a little more. the eu, after all, is an institution founded very much on
the rule of law. and, you know, supposedly liberal way of look iing at ord. it's very important that the european countryies because eve though the south china sea is quite a long way from london, paris, brussels and berlin, just as disorder, if not chaos, in the middle east is going to stay isolated to europe and europe's backyard. so, i think this really does need to be seen as a global political and security problem, not just a regional one. the u.s., australia and japan
can help to fashion an effective diplomatic response and you would like to think that they'll be very well, very efficiently joined up if the moment comes. >> from the east/west center. thank you very much, all three of you, for a terrific presentation. i haven't read the report yet. question one, what kinds of constraints do you see in implementing the vision, particularly, andrew, you've outlined in the report? is it political alignment? there's going to be some expenditure. other considerations about china, the china consideration, that's question one. question two, couple of you mentioned -- maybe all three of
you mentioned, including india in this effort. given the asymmetry between the u.s./india relationship and india's relationship with both japan and australia in terms of the kind of agreements and you mentioned logistics agreements and access agreements and stuff. what's the best modality? pulling india along to get to this stage of being able to work with us more as allies, or is it insisting in order to dock on to the fed rated system you're proposing? thank you. >> i think some of what i'm talking about is already starting to happen. so, it's been fairly quiet and it's been somewhat fitful.
but australia and india have been patiently step by step building a stronger strategic relationship. we have a joint declaration on security. i can't recall if that's the exact title. the japan -- there's more exercising going on, more exchanges. so, i think if you like the architecture is developing. at this stage, it's developing principally bilaterally. but i would say it's a kind of concerted bilateralism that we're seeing. and it's heading in the right direction.
and sometimes, you know, quite surprisingly quickly, they've established an official trilate which sits next to the u.s./japan one, which is a good thing. i don't think it's an either/or, though. i don't think we should wait until the perfect ediface is constructed. meantime, where we can, where it makes sense, we should bring india in. mike mentioned the 2004 tsunami in the indian ocean. that was a perfect example from almost a standing start, the four countries generate d prett impressive military response to that tragedy because they are like minded. a lot of shared values. there's a lot of sort of license
interruptability. i think on a case-by-case basis we can reach out to india and say we can help with this. would you like to join? it's that kind of process rather than sort of having some big high-level goal and sort of waiting until we achieve it. >> we're at a place where we think we can do trilaterally more. that's been working for a while. those patterns of behavior. i participated in my fair share. everyone around this table has. they can range from incredibly, intellectually stimulating to
painful diplomatic and defense sort of sharing of talking points. we've done less of the latter than the former. that pattern of comfort, you have to build up. with india, it's a great goal. i agree wholeheartedly. i think we'll have to go at it both ways. i don't think we want to look at it in a single lens. we have trilateral pieces we want to do. i remember thinking it would be easy in my tenure covering asia, we would have these foundational agreements done. it was great. and it's both disheartening and comforting to see that it wasn't just my problem. that, in fact, this is just hard. and it's hard with any country.
we'll have to look at it and in the end it's always going to be driven to what every individual sees as its self interest. if that's not the driving premise behind it, i'm concerned about it. when india sees it greater in its interest, i think it's important to be able to accommodate it. until then, there are lots of things that we can do with india. both of our countries independently, bilaterally and we should look at any of those opportunities. >> bob just confirmed my theory that the great attraction of trilateralism is to watch our allies try to negotiate with each other and sit on the sidelines and say, ah, now we understand what we have to go through with you. i don't know if you want to address constraints. i think there is a constraint issue, of course. you know, japan has budget limitations. we all do. australia does.
india does. and so when you move to add australia, japan or india to add japan to australia, it takes money and takes people out of their training cycles. what's been impressive to me is that four navys have been willing to do it. the indian navy, from what i hear, from officers, gets a lot out of exercising with japan in terms of competence, knowledge, high-end asw and other training opportunities. and not necessarily always with u.s., too. there's something about exploring -- gap is not as big.
delhi in particular. bob deserves a lot of credit for this. i think despite challenges in the defense budget, the exercise schedule with allies, partners, trilaterals, bilaterals, have been maintained very well. which shows you that there is leadership and strategic drive behind this. there will be constraints, i think. in some ways the real -- you asked about bedrock agreements and so forth. part of the reason you need those is to reduce the costs. if you have these kinds of arrangements in place, it's going to cost less to do it together. it's kind of a check chicken and egg problem. you raise the right one. >> i didn't finish off on constraints. i think mike has dealt very well. around politics, i think you're right. i think the broad underlying trend, if you like the structural trend, is in this direction.
i think there's no question that there are windows of opportunity to advance these objectives and that we're in one now. the three countries i've written about and i would put india in this category as well, broadly see the region the same way. they have broadly the same sort of -- if you like grand strategic objective. i think there's a good convergence in the capitals around this. but that's not to say that that sort of alignment can't be sort of knocked around by politics. i remember, for example, that the government, when it came to our office in australia disavowed quadrilateral cooperation quite quickly. i think they did it very soon and it hadn't been thought through. that's how changes in the political realm can, i think, not stop this trend or reverse it, but can sort of temporarily
hold it up. that's how i would put it. i think there's a very strong convergence there at the moment with actually the four countries we've been talking about. building up real intra- operatability is much more about people getting used to how other people do things. and building up those real habits of close working. australia and the u.s. have always been close, but the operating tempo that our militaries have been working together under since 9/11 really means that they're almost kind of integrated, joined at the
hip. and, you know, in other areas, i know that the united states with, for example, japan works incredibly closely. it's how we take those close working relationships and broaden them out. this is hard. even in militaries, achieving genuine jointness is a sort of lifelong project really. and we're saying we want you to be genuinely joint among yourselves and, guess what, we want you to be genuinely joint and combined with the australians, the japanese, south koreans, as bob said, europeans. that's a really big change. it's going to take time for our uniformed services and bureaucracies to kind of make some of those changes.
>> thank you. a great report. the important things are all there. but in the real world, we have to make choices among capabilities and budgets. i want to push you a little bit on that. case for asw, talking to navy people, is pretty strong. we've fallen behind. we need to catch up with our own selves, having this hiatus since the cold war ended. amphibious capabilities in your paper. if i had to trade off between the two, from what i know, i would say the amphibious side could probably be left behind as you move on to asw. what's your reaction to that? >> good to see you, doug. i certainly don't dispute the importance of asw. and i probably, if you really sort of pushed me and i had to rank them i would probably put asw ahead of amphibious. i don't think it's a clear tradeoff. australia, for better or worse,
has bought these two nearly $30,000 ships. japan, for its own separate but, i think, similar and related reasons, is making quite a similar investment in an amphibious brigade. so, those things are happening and those resources are countersunk, if you like. the place i'm -- sorry, that was probably a bad metaphor. invested. what i'm talking about is much more the human piece of this intra-operatability. and mike is right about the exercise schedule. but let me give you an example. operation talisman, the big biannual australia/u.s. exercise with a heavy amphibious flavor to it for the first time last year had, i think, 35 members of
the japanese self-defense force participate. that's great. it's a small start. that doesn't really cost anyone anything to do that. and i think scaling that up over time so that the three amphibious forces working together can start to build what i'm talking about and there have been exercises -- we had an event here the other day with a japanese military, a tchttache being able to do that sort of stuff isn't going to cost vastly more resources but, i think, is a really powerful force multiplier. in australia, we know that disasters happen and that the assets in our force, anyway, that are the most stressed tend to be this kind of ready reaction, amphibious type capabilities. i think we can do both. >> and i'm just going to comment on one thing, doug.
you've hit a raw nerve here, which is -- what is it? we have fallen behind. so, again, not just because i'm the u.s. government official. but i wouldn't trade our navy for china's navy or -- right? it's worth clarifying. i think people -- not you, but i think in general, you know -- we are the relative dominance that we have had for decades is clearly not as great as it's going to be. and we do have to figure out different ways of operating as a result of that. but, you know, whether or not we're able to do it i, of course, do believe we'll be able to do it and have made the investments to do it. i think it's not just about that one particular mission but the way a lot of people -- and frankly a lot of people in the region are assuming certain things of where we are. and i think if you look at the absolute terms of what we in the
united states bring and what we bring with our allies, one of the real important pieces to being here, i would take our situation every time over anybody else's. and i think that's something that it's important we maintain. it's important that we look at and something important we continue to understand as our relative strength. >> it's a question that won't go away, though. i think you're right about that. it's a little bit reflected in the current debate in the navy, posture versus capability or presence versus capability. >> yes. >> which gets at the same choice. i think it's a little bit of a false choice in some ways. researchers are constrained. csis was asked to do a rebalance. andrew was in between stints as national security adviser and helped us write part of it.
you can't rely on the high-end deterrence. then you leave open all scenarios short of war. that's where wars come from. it doesn't just start one day. it starts because regional dynamic changes, states get weak. vacuums are created. so the amphibious capabilities are critical in a way that some warfare isn't, peacetime shaping mission. if it doesn't work you really want the other. so it's going to be a tradeoff. i find the navys debate about this a little artificial. i think it's a reality that all three governments are going to have to -- from the top -- shape this. if you leave it to the services, they each have their own answers, or even within the services. so there really does have to be an intelligent plan from the civilian leadership, from the military leadership to start, you know, balancing this. it's not an either/or, of course. and that's why i think the paper
is so important, and what bob is doing in government is so important. >> last question, we obviously need a follow-up report. last question. >> speaking of resources and budgets. >> actually, hi, andrew. and bob. and mike. i have a very different question. bob, you used the phrase raw nerve i want to hit a big-time raw nerve. donald trump. to what extent, whether trump is nominated or not is irrelevant. what we're seeing among all the major candidates is a drift toward isolationism. look at the free trade attitudes, for example, of every major candidate. to what extent is this drift likely to slow down what all you guys are trying to do?
is it already affecting -- we know it's affected perceptions in japan big time, because mr. trump has broken a taboo and said, yeah, go nuclear. how nice. but beyond that, how might this affect all of what we've been talking about? because clearly there's a mood in this country that i think most -- certainly people in this room don't entirely agree with, i suspect. but there's a mood here that's creating perceptions wherever i've traveled around the world the last couple of months. what is going on in the minds of those who want to do what you want to do? >> well, we'll build bases all over asia, make mexico pay for it. but i'll start and maybe run out of time so bob doesn't have to answer. but i have to say i've had an experience which is probably similar to yours, pretty senior levels among our allies in asia,
from chuckling to nervous chuckling to the past week or two since the statements about nuclear real concern. not just about the low probability that we have a trump presidency, but that the core of the international system, the united states, could be -- you know, the place for this kind of debate at the level of leading candidates. it says, in other words, something about american staying power. what i try to point out is if you look at opinion polls in december last year, the most recent polls on this that i've seen, in the pugh poll, 70% of americans support tpp in that poll. well over half supported free trade broadly. the polls done by the chicago council on global affairs and others show the highest level of support ever for the u.s./japan
and u.s./korea alliance. we don't ask about australia, because i think people take it for granted. mistakenly perhaps. when the u.s. should come to the defense of japan if attacked, it's the highest number in these polls in decades. there's no institutional basis, no institutional way, no constituencies y in the congres for example, to enact a policy of retreat. it's very hard to imagine, republican or democratic senate armed service committee saying, right, got it. let's change all that. if you look at polls, congressional leadership. if you look at public opinion and so forth, it's pretty strong. but, you know, let's see what the polls look like next time. maybe this will start to affect views. i don't know. i'm not certain it will. i'm not certain it won't.
so, it is worrysome. bedrock is more solid than the headlines. that would be my answer. >> i'm going to filibuster now so that bob doesn't have to answer. but more seriously, the comments being made are obviously of concern, because they really do strike at the heart of some of the pillars of u.s. engagement with the region over not just years or tens of years, but centuries, really. mike has done some great writing about this. but u.s. economic engagement, open economies, forward u.s. military presence and the alliance system, they have really been the bedrock of the success of the region. and so, of course, countries in
the region are going to be concerned. i have to say i'm more optimistic. those of us who know america and respect it recognize that, from time to time, you do have these convulsions. and one of your endearing attributes is you kind of let it all hang out. and so i think that the more sober people in the region recognize the sort of america that is represented in some of these comments is not really america in its essence. i think mike is talking to some of the structural factors that will reassert themselves after this kind of wacky election campaign is out of the way. i'm not downplaying it when
someone seemingly, without a moment's real forethought blindly says japan and south korea should acquire nuclear weapons. it's not a trivial thing at all, or that nato shouldn't exist. take your pick. but i do think that if you like sanity will ultimately prevail. >> i'm happy to actually speak on the record on this and ensure we get no more questions. i will tell you what i tell people, friends and allies when they're concerned about this. there is always a streak of isolationism within the united states. it has existed for centuries. it is not anything particularly new, but in the recent -- in our recent history, every time that has surfaced, in the end our interests have been clear to anyone who is charged with protecting and defending the united states. and that is that it is in our
interest to have an international approach to these things. regardless of who becomes president, in the end it's our interest that will make sure that we always -- that we see the world the way we see it now. it's been across administrations, across everything. while it's -- i won't say that andrew said the word convulsion, but it is a longstanding trend. over the past century we've gotten to the point where we realize our interests are not best served by that. i suspect we will always do that. >> probably not appropriate to end a u.s./australia/japan discussion, particularly given our common cultures, as colonies made up as the riffraff of europe. to quote the brits but as churchill said, you can always count on the americans to make all the wrong decisions before they make the right one and as lord countington said once when we were having one of our convulsions and the europeans
were complaining yes, yes, it's true buchlt they're the only americans we have. and as churchill said during the war, the only thing worse going into this with allies is going into this without allies. and the good thing in the u.s. we have for us are the allies actually -- we have to work on japan and korea a bit. our allies actually like each other. if you look at history, that's actually a rare and important thing. this kind of trilateral effort we'll have to work to have more of. andrew, it's been good to have you here. and thank you, bob. his title says strategist, but he also has to implement all this stuff. thank you for moving this forward and thank you for coming.
campaign 2016 continues today with the wisconsin primary. live coverage begins tonight at 9:00 eastern. tune in for complete election results. candidate speeches and viewer reaction. taking you on the road to the white house on c-span, c-span radio and c-span.org. our c-span 2016 bus continues to make stops around the country, featuring winners from this year's student cam competition. metropolitan arts institute in phoenix, arizona, to present awards to winners from the west division for their first prize video, rethinking reform, prisons in america. their classmates won second
prize for their video on "gender wage inequity in the workplace." in los angeles, a ceremony for third prize winner jerry sun before heading to palo alto and rockland, california, to present awards to winners in those areas. we want to thank cox, time warner and comcast. be sure to watch one of the top 21 winning entries at 6:50 am eastern before "washington journal." a look now at the labor market and the digital economy. american enterprise institute and center for american progress got together in creating this panel with purdue university president, governor john hickenlooper and zoe baird.
>> welcome to the american enterprise institute. i'm delighted to welcome you to this discussion entitled "a labor market for the digital age." i'm honored to welcome the president of the center for american progress, who is co-sponsoring this event along with aei. and we're specially honored to honored to welcome governor hickenlooper. i know we have a tremendous conversation in store for us today on one of the great issues we're all wrestling with. i want to start by giving you a few remarks on why this subject. finding new solutions to the problems of unemployment and getting people ready for the skills that they need in the next century. it's so important to us here at aei. aei is a think tank dedicated to really two things. human dignity and human potential. we believe our commitment to truth requires a competition of
ideas to function well in a free society. this requires an opportunity society as well. there's a lot that americans disagree on these days. one thing that brings us all together, the real moral consensus, i believe, behind the american experiment is that we have to push opportunities to people at the preriphery of society. indeed, to the people who need it most. what are we missing that is making this so hard right now? if this were just a question of government money, we could have solved it. our panel today will talk about what we really need. now we thought about this a great deal. there are a couple of philosophical points i think are worth making in passing. i was listening to a speech by roman catholic cardinal by the name of francis george, the
cardinal of chicago. one of the great intellectuals of the catholic church. he passed away relatively recently. i was listening intently. he was giving a fund-raising speech. this is something of great emotional importance to me, as president of aei. he was talking to the donors to his poverty programs. he said to his donors, the poor need you to pull them out of poverty. and you need the poor to keep you out of hell. and i thought to myself, i'm not going to use that to fund raise aei. but it did raise an interesting issue for me. to what extent do we need the poor? to what extent do we need people who have been marginalized? i think it's pre-probably easy
for people in this room to tolerate people and we want to help those people but to what extent do we need those people? the answer to that question is why i'm so excited about this panel. this is a panel on how we can need people more, how we can make more people necessary, less superfulous, how we can stop treating people as liabilities to manage and treat more people with value to create in their lives and in the lives of other people. that's our goal today with this wonderful and distinguished panel. before i turn it over to walter isaacson, i want to welcome the president of the center for american progress.
>> thank you all very much. i want to thank arthur for his innovative ideas on a whole range of issues. i particularly appreciate his focus on human dignity, on opportunity, on addressing poverty. we don't always agree on solutions, but in a time where there is so much shouting in the world, we very much appreciate the competition of ideas we have with aei and a whole host of issues. i'm honored to be here with zoe baird and the work the merkel fou -- markle foundation has done in this arena. i think there's really no -- really no putting aside the fact that essentially the country is,
right now, struggling. struggling with a lot of important issues about how to ensure that prosperity is there for everybody. for the margins and for the middle. not just those at the top. and that's ruling politics on all sides of the debate. so, it's fantastic that the m k markle foundation has been able to bring together a bipartisan group of leaders in this arena and proving even in an election year, we can have a real focus on these challenges. there's obviously no hidden issue here that globalization and technology are really driving a lot of challenges we're facing. people feel like wages are stagnant. that the job engine in the united states is growing and building, but that the wages and the middle class life they can produce are things that many people -- not just at the
margins, many people have fundamental questions about. these kinds of challenges offer us a real opportunity, though. it's an opportunity to try and address these challenges. again, i'm really honored to be here with governors at the forefront of trying to think through these challenges for their state. using technology to solve these challenges is so critical. we at the center for american progress have been working on issues, like apprenticeships, issues around ensuring that the jobs of today are really providing wages and a middle class income for people. we're honored to be part of a debate and discussion with markle and aei that really focuses on how we use new innovations in technology to ensure that we're matching jobs for everyone. it's an important -- it's an
important debate to have. and the fact that we actually are providing solutions, as really we don't have a minute to waste since people are losing faith in institutions to address these problems. i'm honored to be part of this. and i'm really excited for this panel and to start walter off on this important discussion. thank you all. [ applause ] >> thank you. two people who have really elevated the dialogue in this town, not just by coming at it with values and ideas, but by innovative solutions as well. it's great to be working with cap and aei. thanks. and that's certainly true of the markle foundation, zoe. and of our two panelists with zoe. in this year, as she said, that's filled with bitterness, shouting and somewhat of a poisoned partisanship, the
governors on our panel represent what decent politics and getting things done for people is supposed to be all about. we know their biographies. zoe is the ceo of the markle foundation and leads network america. you just got appointed a few days ago, right, to be on the president -- commerce department's digital committee, i'll say. that's probably a longer name, since we're in washington for t you also helped build market-based platform. and the 12th president of purdue university, really one of the world's great leaders, as recognized not only by fortune magazine, but his two terms, successful terms as governor of indiana. and he has also taken purdue into new directions. you know, moved to provide a
whole new set of answers as to what should be done in higher education. and john hickenlooper, among other things, is the only brew master since sam adams to become the governor of a state. is that right? >> i think that's correct. >> yeah, okay. he was an entrepreneur, small businessman, brew master, a mayor of denver, an old friend and now the governor of the state of colorado. let me start off with what is the disjuncture we're facing now. as we slowly come out of the recession, there's been a mismatch. there are people looking for work. and yet they don't aalign. let me start with you, zoe, and what they've been doing, what colorado has been doing and what purdue and indiana have been doing to get a better match between skills in the workforce. >> let me frame the issue this way. which is that most of the people
in this room probably, certainly many of us, have been part of encouraging people to get a college degree for decades. and for decades, about 70% of americans have not gotten a college degree. but americans have great skills. and the mismatch that walter talks about is really due to the fact that we have increasingly put "requires a college diploma and four years experience" on to a job description as our jobs have evolved in advanced manufacturing and information technology and health care. all these jobs that are being transformed by technology and are competing in a global environment as nira and arthur alluded to. what we've been doing is say we can capitalize on the talents of americans much more effectively if, as these jobs are changing, we are using the power of
technology to break down and understand what the skills are that are needed for these jobs and to help people get rapid training for those skills, whether it be training on the job or training in educational institutions. and mitch is going to talk about some interesting things he is doing at purdue. this is not to the exclusion of getting a college diploma. my bet is that if we can do this, more americans will have a college diploma over the course of a lifetime. we won't be telling them by age 22 either you've succeeded or failed. i think that's a big part of the challenge now, is to help every american see themselves in this new economy. and we can do that. so, we have created -- and john can talk about it a little bit. in colorado and in phoenix, we're trying to start out with something called skillful. you can take a look at t skillful.com. although it's really oriented toward jobs and geographies. we're created skill-based labor
market that works for the vast middle that does not have a college diploma. and john has recruited employers to participate with us, and help look at their jobs in a new way, looking at them for skills. we've got workforce centers and goodwill and folks on the ground helping job seekers figure out how to arc particular late their skills. linkd in has been working with us so it will work for the middle class and we're training people how to post a job description when you're not posting, i have an mba or cpa. but how do you define your skills, and then to connect that up with employers. the jobs are growing. some jobs are growing. great jobs are growing. the potential for small businesses and other firms to grow is tremendous if we can connect the workers and the
skills. >> how does skillful work in colorado? >> skillful -- and i'm very grateful for markle foundation to step into this. we've been trying to look at -- as arthur and nira kind of describe, there's been a whole chunk of society left behind, smart phones and all these innovations tied to globalization. whole industries have -- people have lost their jobs. we've done a pretty poor job of getting them back, reengaged to something close to what they had before. historically, we had been looking at the achievement gap within the different communities in colorado, like a lot of states. and what markle is doing is coming in and saying, all right, one way to address this is to use technology in a fresh way. and we've understood that kids -- it's not just about -- your education doesn't just prepare you for life. it's life and a career. and yet too much of that
preparation hasn't focused on career. career is more about skills. so, we've been looking at, all right, how can we really scale up apprenticeships so that kids when they're 17 or 18 can decide to go to work somewhere and get paid. it might only be eight or ten bucks an hour. they work three days. two days they go to a community college or workforce training center or private enterprise, a place that's been accredited. but they study something that helps them. we're not talking pipe fitters and welding. we're talking banking industry, all different manner of advanced manufacturing, insurance industries. these kids are getting trained when they're not at work, in a curriculum that, again, how do you read a newspaper to see economic trends or who understand what other trends might affect your business. at the same time, learning the basic skills you need. tie that in to the skills that businesses were already giving
to employees. so, walmart trains kids in how to do inventory. how to do customer service. there's no place to collect all this information and to really look at the skills that you acquire when you're taking different courses. and markle and the skillful platform, in partnership with linkd in, they're providing a way so that the kids -- we will eventually get to the point where each community college class not only will the curriculum be there that you're going to learn, but also what skills you'll get. kids will be able to click on one skill or a couple of other skills and go to a place where it shows those types of jobs that these skills help prepare you for. you look at that job, click on that job, it shows you what other skills you might need to acquire. in real time, allow kids to have a much more direct a authentic relationship to their career. their choice. again, we're not trying to have
government or linkd in or anybody intruding into individuals' privacy. they can have a living resume that follows them. it's not just about what degree you got. it's each badge, each certificate that you achieve prepares you for your next level of education, of learning. and it's clear -- i mean, it's easy to see, we start this had about kid bus it really is going to apply to people in their 40s and 50s, who have been marginalized by all this rapid change in society. and a lot of the disruption we've seen in this presidential primary season -- i'll leave it at that -- i think that's a reflection of deep-seated frustration among large sections of the american public because we haven't done a good enough job of getting people rapidly retrained for the jobs. in colorado, we've got 20 some
thousand, 24,000 jobs waiting to be filled, many of them technology. you don't need a four-year education to do those jobs. people in their 40s and 50s that lost their career could be trained in six months, nine months, maybe a year, to get jobs that are $60,000, $70,000 -- good compensation for them. how do we make that happen rapidly? i think this platform will pay dividends. >> how are you doing it at purdue and how does it tie in with purdue moves, in our initiative to be a progressive university? >> things that might be useful to modernize purdue education for aan economy that zoe and the governor are talking b one of our colleges just got the first certification anywhere for a so-called residency competency-based degree. progress at your own rate not on an old artificial calendar. and in that institute, they'll
be -- we think the education will much more closely resemble the world to work. team taught and team learned, this sort of thing. you know, i don't much worry about our graduates. for a long time, each class leaving get hired and do very, very well. there's a mountain of data to support that. i think we've all got to be really appreciative, first of all, for efforts like those just described. everywhere i look, there are jobs waiting. there is a mismatch. i don't know that there are enough of them. competence in democratic institutions, which is always
underg under under undergirted. years of stagnant, low growth could not but produce sch a situation as we have. we will not have america as we've known historically patetic recovery in quotes. even if we had had a vigorous recovery, we would still be worrying about these problems and the inequality that can flow from them. what i'm trying to understand better -- i'm sure i will understand better after listening to you three today. what else do we have to worry about? clearly, the erosion of social capital is a big part of this. of all training programs you want in the world. if people are addled by drugs have, no sense of motivation in
their lives, connectedness we once took for granted you won't have economically productive people. effects of animation and so forth, i've been a techno optimist. i stubbornly cling to that. somebody calculated the three categories in this anemic recovery. retail, food service and call centers, which are perhaps the three most easily automated jobs we can think of. i think we've got some structural issues. some of the problems are very self imposed and by choices we've made that have limited overall economic growth. but i believe even if we get on top of that problem, we've got some very tough phenomena to wrestle with that i don't think we've seen before. >> can i just press you, when you said choices we've made to
limit economic growth, give us some examples. >> how much time do i have? you know, high taxes, laws that say don't have 50 employees, don't pay anybody more than 30 hours or serious consequences happen. let's have higher minimum wage requirements. let's have forced -- paid sick leave. let's treat contractors as employees. let's treat the employees of franchises as though they were employees of the parent firm. you make it more and more and more expensive and ownerous and difficult to hire people full time. why are you surprised fewer people get hired? >> indiana has, in some places, quite a low employment rate recently and in some places not. as you put your hat of being a governor on, what worked, what didn't and why? >> well, i think what didn't work yet was sufficient
upscaling and improvements of the k-12 system. aeros were pointed in the right direction, but that has not -- the biggest problem our one state faces right now is the human capital issue. we are not yet where we need to be. we do have these low rates of college attainment and so forth that zoe mentioned. manufacturing jobs have come back. and thanks in some part to lower energy rates. there's a place where american ingenuity has flowered recently. we should feel good about it. but i don't think anybody should feel happy at all. i think, you know, we were all -- i was raised to think that the most predictive variable in terms of politics of the country was unemployment rate. i think it's meaningless today. at least the one we all look at it. experts here can tell you what goes into u6.
that's the one to watch. it's 10% in terms of people who have given up, underemployed or. >> let me take that and turn it to zoe. what do you do about this hollowing of the middle class and people who are who are und mismatched and don't want to be? >> we did, as we were planning skillful, we did some polling and focus groups and folks from north star did it for us. and we wanted to understand before we acted, obviously, and understand whether people wanted to get training, whether they were looking for jobs, and some of the most powerful focus groups were focus groups of people in their 40s and 50s who all had jobs. when you asked them, do you go
on the internet to look for a job, they all raise said their hands yes. john will remember this. and when you said to them, how often do you do it, almost all of them said every day. they had jobs, but they clearly were hungry for something more. can we get at what that is, you know, a different kind of job, a higher wage, we can all only imagine the answers. but that's a significant part of what's driving skillful. as john said, it's for young people to find career paths, it's for parents so we can tell them how to think about the jobs of the future, but it's also for people who are in their 40s and 50s who feel underemployed, or who aren't -- they're hourly workers, even if they work for big companies, and they can't tell you what their annual income is. that was another very surprising moment. people who worked for fortune 500 companies and you'd say --
and these are people in their 40s and 50s, not entry-level workers, and you'd say, what's your hourly? raise your hand if it's in this range -- i mean, the annual income. people didn't know their annual income, because they're hourly workers and they don't think that way. so this is what we have to change. now, at risk of going on a little bit here, in addition to what i've talked about, it is critically important that we build many more good jobs. so mitch is right, i mean, we have to make sure the jobs are there for people. and we have a collective effort that mitch was a part of called "rework america." we wrote a book called "america's moment," and it's probably around here somewhere. but you can find it online. >> will you hold up a bit. it's right by your foot. >> this is what i wanted to get into, how to create more jobs. in this book, we talk about
human development, as i was talking about wit skillful, but we also talk about, how are we going to create many more jobs, good jobs. and we concluded and this was a bipartisan effort, ceos, tech officials, presidents of universities -- we concluded that globalization and technology provide an opportunity to create many, many more good jobs. because americans have the skills, the know-how, the talent that the world needs. the middle class is growing all over the world. so one of the things we need to do is to use technology to create platforms that make it easy for people in small businesses, in particular, small and medium-sized businesses, which is where most people are employed and where most job growth comes from, to make it easy for people to sell into those world markets, to become part of the global economy, not because you have to travel, but because you don't know -- people say you don't know who's buying
from you on the internet. you don't know if it's a neighbor or a dog. well, you don't know if it's a neighbor or someone who lives in another country. so that's one of the areas where we think there's tremendous potential. we've done some research with ebay, if you look at people selling goods and increasingly services on the internet, into foreign markets, their companies are growing faster than companies that are not selling globally. that's one area. another area where we can create many, many more good jobs is to enable small and medium-sized businesses to use digital knowledge, to use the same kind of data analytics that big companies are using to find markets, sell more efficiently, understand who wants what kind of product, customized products. you know, it's not just nike that should be customizing
shoes. but anyone should be able to have access to that kind of granular knowledge to grow their small business, their main street business. and so one of the other things that we're working on and believe can help here is for platforms to develop, and there are companies and these businesses that can help people accumulate information. a small business doesn't have a lot of big data. but if they're part of a system where the data is available, a small business in indiana can get information from a small business in colorado and still figure out some really important things to grow their business. and there are a lot of other policy directions that could help here, to help get capital into small businesses, to use this kind of information. but the bottom line on all these ideas is that we are in a totally new age. we have a totally new economy. the transformation now is as
great as it was when we moved from an agricultural economy to the industrial age. this move from the industrial age to the age to the digital age is as big a move. yet there was a study done of the presidential debates and in 25 debates, according to the study, there wasn't a single time that the word internet was used in conjunction with the economy or jobs. so we have to have a national conversation about the digital economy and how to create many more great jobs and how to prepare people for them. >> so, governor, picking up on that, zoe said that both technology and trade actually can create jobs rather than destroy them. but a lot of the anger today is people believe their middle class jobs have been destroyed by technology and undermined by trade. where do you stand, first of all, on technology? has technology destroyed jobs,
or is that going to help with jobs? you're the only one that's a small businessman. >> at first, i want to recognize, governor -- former governor daniels as really one of the leaders in this for a long time. you know, when we talks about the social issues facing people's desire to work or to better themselves, that's not a partisan issue. that's something we all recognize and i'm not saying that because colorado legalized recreational marijuana. although i will point out that we have anecdotal evidence that we're seeing less drug dealers out there. >> those weren't the drugs i was talking about. [ laughter ] >> but it's a whole universe there, and i think that ties in. the other one that is not a partisan issue is red tape. and creating bureaucracy that gets in the way of people starting businesses. right? most small businesses are started by a sheet rocker or a painter, and he's the best sheet rocker in that company and he's going to start his own company. if there's a lot of red tape and
bureaucracy, he's going to need more incentive to take that risk and go out on his own. and those are really in many ways, the job creators. which is how you get to the middle class. so the question of how we get there, it's not just technology. there's a company in denver, four years ago i got a tour of -- it's called the belgian electronic sorting technology. huge conveyor belt, flies along, a thousand cameras above it, taking ten photographs every second, and as these, let's say bluebirds, is what it was designed for. as they go over the edge, there are puffs are air that are red, takes them into the discard pile. the blue ones go into the yjuic bin. >> and the ones that are right get packaged for consumer sales. it was $240,000 to buy this machine and each one gets rid of six jobs.
i went home and almost couldn't sleep. holy smokes, it's not just the technology we see. it's imaging. it's all these things. but i am now a techo optimist, now that there's a title to it. i agree with zoe, we're going to great jobs. right now, we have a bottleneck. as in almost every industry, when you don't have the labor or capital, but labor is as important, you stifle the ability to create new jobs and grow. and that growth helps create the middle class, which feeds more growth. and i think getting in realtime enough people that -- where these companies can grow at the rate they should, will be cata littic. and i really do believe -- it won't be just the united states. the middle class that's growing around the world is going to allow -- if we get it right, get the workforce and the capital where it needs to be, we'll see, again, it will be some years and it will be a lot of work, but we can see genuine increases in
productivity all over the world. >> zoe said that the transformation from industrial to a digital economy is comparable to the one we went through when we went from an agricultural to industrial. one of the things we did back then, 100-some-odd years ago, we radically changed education in the united states. by saying high school should be free and universal. what radical changes in education should a company in this transition? >> well, it has to start at the bottom. and this has been said now for -- losing track of decades. the nation at risk report is now 3 1/2 decades old. and one cannot say we've made nearly sufficient progress. some would say very little at all there.