Opening Greetings—
I am honored to be with you this morning. This body does important work in giving voice to some of the issues that matter to this region and to our nation and our world.
The number of those issues seems to grow every year. And it is a continuous parlor game trying to assign places for them on our collective priorities list. The pollsters certainly work hard at this. There have been many polls recently that try to identify the issues that concern our three hundred million fellow citizens, and try to determine just how concerned about them we are. All the major television networks and newspapers – as well as Gallup, Newsweek, Time, Harris, and others – have conducted polls along these lines and here are the issues common to most of them. They include terrorism, national security, health care, energy prices, the economy, immigration, Iraq, the environment, job growth, nuclear proliferation, crime, and education.
So I thought it might be interesting to try to reduce this vast sampling of issues to a few manageable categories, and take a look at what technology stands to bring to their solutions.
Of course, our time this morning won’t allow a detailed analysis of any of these categories.
I’ll say at the outset that my company, Northrop Grumman, has interests in some of the issues I’ll mention, but not in all. I should also say in advance that I will be approaching these categories from an IT perspective. This is not just because I lead my company’s IT sector. It is also because I believe that information technology is the heart and soul of technology today. Remarkable progress is being made in genetics, pharmaceuticals, communications, chemistry, physics and many other disciplines. But IT is the engine that is driving the progress in each. For example, the human genome project would not exist without the advances we have made in IT. Today, the systems you stuff into a military aircraft are more important than the aircraft itself.
So, what are the categories? I think we can put most of the issues I mentioned into four buckets: First, would be National Security and it would include the defense of our nation and our allies as well as maintaining our homeland security and assuring public safety.
The second bucket is Healthcare – not just the advance of medical science, but reducing its costs, improving its quality, and making it more available to everyone.
Global Competitiveness would be the third one – assuring a strong economy, job creation, and competitiveness in a world economy.
And the fourth bucket would be energy and the environment – accelerating energy efficiency, developing new sources of energy, and protecting the planet.
So, let’s start with defense. America has a very specific way of waging war. We choose to invest in technologies that will allow our forces to win conflicts as quickly as possible, while sparing as many lives as we can. Think of the unmanned aircraft that have been shot down over the past several years. Each pile of wreckage represents an American pilot that was not killed or taken prisoner. That speaks to the American way of war, and most of the technologies that make it possible can be divided into two groups: Assured Access, and network-centricity.
What do I mean by assured access? I’m talking about technologies that give our military the ability to reach out wherever and whenever our national leaders deem it necessary. And to do so with enough power to accomplish whatever mission those leaders assign. Recall the air strikes against Libyan President Khaddafi in 1986. That strike almost did not happen because Spain and France denied us over-flight privileges. Our aircraft had to take off in Britain, and fly out over the Atlantic, around the Iberian Peninsula, strike their targets and return by the same route. It added almost 3000 miles to the mission and made it more dangerous than it needed to be.
It’s easy to see what kinds of technologies and systems offer assured access: Stealthy aircraft, refueling tankers, radar jamming; cyber warfare, submarines, aircraft carriers, special operations, transports – both sea and air, precision strike, secure communications, even missile defense.
The other group comprises those technologies that advance the cause of Network-Centricity. The objective of network-centricity is to clear away – as much as possible – the fog of war; to answer the four questions that soldiers have been trying to answer since the beginning of organized warfare: Where am I?; Where are my buddies?; Where is the enemy?; and what are we doing about it?
Over the course of the last century, progress was made along these lines most notably with radio communications and aerial observation. We now have the technology to advance that progress by a quantum leap. This will be done by integrating sensors and communications to give every war-fighter a common picture of the battle space.
Let me give you an example. One piece of this puzzle is what is called Blue Force Tracking. Think of a laptop that displays a map picture of your immediate area with friendly units marked in blue and unfriendly units marked in red. Imagine that this map picture moves and changes as you move. No matter where you go, or what time of the day or night you go there, you will always know where the good guys are – the blue force. It is in use today and has prevented many friendly fire incidents. Jessica Lynch’s convoy, on the other hand, was not equipped with Blue Force Tracking when they drove into that ambush four years ago. They were still using paper maps.
Sensors, communications, and integration are the keys to network-centricity. This means integrating unmanned aerial vehicles, satellites, and airborne radars into a graphic representation of the battle space that can be accessed by everyone from Generals and Admirals to corporals. And yes, it does have utility in anti-insurgent operations. Where ever the fog of war is thickest, the utility of network-centricity is greatest.
The other half of the National Security category is Homeland Security. It includes such things as border security, the security of our coastal waters, and, even more basically, the security of our urban areas. As many of you might know from having followed the various congressional hearings and independent reviews of the 9-11 attacks, the first responders in our major cities – police, fire, and medical units – seldom know what the others are doing, where they are, or even how to contact them due to incompatible radios and other communications. New York City was the first to tackle this problem with an integrated, mobile, broadband wireless communications system for public safety personnel. They can now access federal and state anti-crime and anti-terror databases, get finger prints, mug-shots, city maps, and even streaming video all from their police cars or fire trucks.
But New York City is the exception, not the rule. Just this month, the U.S. Homeland Security Administration issued a scorecard on 75 of our largest urban and metropolitan areas. The scorecard observes that, while most of our major metropolitan areas have plans and policies in place for interoperable communications, the actual implementation of those plans is generally lagging – this a half decade after 9-11. As New York City’s Mayor Bloomberg said last year,
“One of the most important lessons learned from September 11th was that our emergency responders need better access to information and clearer lines of communication in the field."
Police Commissioner Kelly agreed, adding,
“The future success of crime fighting and public safety in general is wedded to the ability to quickly access data and share it.”
Other nations – with other policies – are also bringing technology to bear on the issue of public safety. The UK has a program called IDENT1. It consists of a national identification database, including fingerprints. And they are just starting to introduce a system called LANTERN into the equation. LANTERN is a small hand-held fingerprint reader that police can use on the roadside. A suspect sticks his index finger into the unit. It reads the print and automatically runs it through the IDENT1 fingerprint database to check for a match. British police expect this system to speed up roadside stops, maximize the time police officers spend on the beat and minimize the time they spend down at the station doing reports. As you can see, policy has to keep up with technology. They allow that kind of instant fingerprint checking in the UK. They don’t here. The difference is one of policy, not technology.
The second category of issues facing our nation is healthcare.
There are currently over 44 million Americans without health insurance and costs for them continue to soar. And this problem will only get worse for several reasons. First, our population is aging at a very fast clip. Figures from the United Nations show that this is a serious issue the world over with different regions aging at different rates. For North America, the UN projects that by 2050 the percentage of people aged 60 and over will nearly double. And those figures – alarming in their own right – don’t take into account the pace of scientific and medical breakthroughs that will lengthen lifespans. It might be said that our health care system is the victim of its own success. For example, scientists are making rapid progress with genetic mapping. This will most certainly result in the ability to head off certain diseases proactively, or at the least, identify those at risk for certain diseases. Proactive treatment is expensive.
But at least we can see this coming, even if we choose to do nothing about it. What about those events we cannot foresee? Things like pandemics and bio-terrorism? A pandemic will spread with the speed of an airliner. As for bio-terrorism, technology places the creation of lethal strains within the reach of more and more fanatics every year. One wonders what 9-11 might have looked like if Osama bin Laden had been a biologist instead of an engineer.
For years, people have predicted that information technology would provide solutions to many of these problems. In fact, IT has made little headway against them. For one reason, the amounts spent on IT in the health sector are among the lowest of any sector. The banking industry spends an annual average of $15 thousand per employee on IT. In the healthcare industry, that figure is $3 thousand per employee. Most doctors understand how this translates. This month’s Fortune magazine reports that doctors consistently rank billing and claims processing as their number one problem, even ahead of malpractice. But it also has implications for patient care. The Institute of Medicine reports that between 50,000 and 100,000 hospital patients die each year because of medical errors due largely to a lack of automated information systems. Apart from complicating treatment, this shortcoming raises costs. One in five lab tests and imaging studies are performed simply because previous test results are unavailable. If you watched the State of the Union speech last week, you heard the President say, quote, “We need to reduce costs and medical errors with better information technology,” unquote. The applause that followed was bi-partisan.
Some of the speed bumps to expanding IT in the health care sector are the need for records privacy, and the different laws and policies among the states in place to protect it. There is currently a pilot program underway to harmonize all these different privacy policies with federal law. It makes electronic health records available to clinics nation-wide, and interconnects health care professionals with local, regional, and national records exchanges. This effort could contribute to a National Health Information Network.
Work being done with the Department of Defense could also help bring the potential of IT to the health care sector. They have set up a health information exchange for their nine million members, which makes electronic health records available to clinics nationwide. This DoD program could blaze the trail for the rest of the country.
The third category of concern for most Americans could be titled Global Competitiveness. How do we maintain our economic growth, national affluence, and leadership in a world economy that every year grows more and more defiant of national borders?
First, I think we have to resolve ourselves to the fact that, like the march of technology itself, the global economy is here to stay.
This is true even for the high tech industries that we Americans excel at. Last year in aerospace, for example, the joint Italian/British firm of Augusta Westland, along with Lockheed, won the contract to supply the next generation of White House helicopters for America’s future presidents.
The same trend applies to more down-to-earth sectors as well. American auto workers build Hondas with parts imported from around the world. Those cars are “American made” even though Honda’s corporate headquarters is in Japan. Fords are now manufactured in Russia, though Ford’s corporate headquarters is located here in America. The corporate headquarters of Chrysler is now in Germany, but many Chryslers are made in Canada as well as the U.S.
Since we cannot run away from this global economy, we had better learn to master it. And master it we can, because international markets pose not just challenges, but opportunities. Yes, American business has to contend with low cost labor in India, China, Eastern Europe and other locations. And yes, our nation has been off-shoring jobs to those places for some time now. But we are also starting to see opportunities for on-shoring – sending jobs away from traditional venues, but to more competitive locations here in the U.S.
There is precedent for this. Let’s return to automobiles. As you know, Ford just reported its worst year in its 103 year history. The rest of the “Big Three” are also having problems. But Mercedes, Toyota, Hyundai, Nissan, and others are opening plants here in America. They are building plants in rural America for the same reasons we opened our own facility in southwestern Virginia – in Lebanon. Later this year, Northrop Grumman will open an IT support center there. We will bring 400 good-paying jobs to a part of the commonwealth that is primed for economic expansion, and has lower labor costs, an educated work force, and a good quality of life. Everybody wins: The Commonwealth, the employees, my company, and our customers.
Globalization does not have to be a threat, but mastery of it assumes a healthy free market. That is good for us because ideas, innovation, vision, managed risk, are all distinctly American. They are what we do best. And more than that, they are the foundation of the commodity of our age – intellectual capital. Let me explain.
Every age has its governing commodity. In past times it may have been precious metals, military power, agricultural surplus, trading or financial acumen. Master the governing commodity of your age, and you stay out in front. For many decades, up until thirty or forty years ago, the governing commodity of our age was industrial capacity. We were the kings of that commodity – hands down. On December 7th, 1941, the Imperial Japanese Navy had ten aircraft carriers to our seven. By war’s end, three and a half years later, they had four still floating and we had a hundred.
But the governing commodity of our age is no longer industrial capacity. Today it is intellectual capital. We lead the world because we lead that commodity. It is the basis of our leadership in pharmaceuticals, medicine, communications, computers, aerospace, genetic engineering, defense technology, and many other categories. If we lose our leadership in intellectual capital, we lose our position of leadership in the world.
And there’s the rub, because we are not keeping up. For several years America has been bracing for a tidal wave of retirements of our best technical minds. When that wave hits, we will have difficulty replacing them. In recent years U.S. universities have graduated around 70,000 engineers annually. Meanwhile, India graduates about 200,000 per year and China over 500,000. And the quality of those engineers is becoming every bit as good as our own.
American students are avoiding math and science in high school and college. As Tom Friedman said in his book, The World is Flat, I dare you to find an eleven year old in America who wants to be an engineer today. And those students who do want to take math and science have trouble finding teachers. U.S. school districts will need to hire 240,000 middle school and high school math and science teachers by 2010 to correct the shortage. This is not a problem to brush off. Nearly a year before the September 11 attacks, the U.S. Commission on National Security in the 21st Century, headed by Senators Gary Hart and Warren Rudman, concluded among other things that, quote, “The inadequacies of our system of research and education pose a greater threat to U.S. national security over the next quarter century than any potential conventional war that we might imagine,” unquote.
On balance, globalization has been good for everyone. The world economy is expanding at a rate of about 4.4% after inflation, and nation after nation has moved from dysfunctional centralized economies to free-market systems. In turning away from their past practices, those nations performed a collective act of courage. But this is often the price of progress. Gary Hamel of the Harvard Business School said, quote, “Studying the future is not the ability to see the future, it’s the ability to walk away from part of the past” unquote. The way to keep our place as the world’s foremost economy is not to try to hide from this new global economy, but to master it. Intellectual capital is the key, and we have to renew our leadership of that commodity.
Finally, there is the category of Energy and the Environment. Obviously, technology has a critical role to play in the solution to our dependence on foreign oil, and the protection of our environment. It is proving particularly useful in making existing energy sources more efficient. I agree that these issues will eventually require solutions that are a bit more revolutionary than evolutionary. For example, we might make the internal combustion engine more efficient, but what is really needed is a quantum leap in battery capacity.
In the end, however, the solutions will have to be market based. Therefore, technology will make its greatest contribution when it can be synchronized to the market place. This means embracing the basics of business – Business 101: Coming up with a product that is energy efficient, environmentally friendly, and desired by the customer – that’s the magic formula. Electric cars have been around for years, but even subsidies have not brought them traction in the market. Americans are Affluent and independent-minded enough that they will pay extra for the kind of car they want no matter how inexpensive you make the cars they don’t.
Technology has been a continuous tale of problems solved, problems created. But the stair-steps have clearly gone upward on the graph of the human condition.
They have gone upward on the graph of the environmental condition as well. The industrial revolution gave jobs to millions. It also gave us the modern city with all its early problems of pollution, over-crowding and disease. For example, the advent of the 24 hour factory shift created a need for illumination – a need that helped create the whaling industry almost destroying that species. What saved the whales was the new petroleum industry which brought us kerosene. Its by-product was gasoline, so useless at first that it could not be sold and was often flushed down the rivers at night.
Electrification also helped solve the need for illumination and teamed with another technology to solve another problem that grew out of the modern city – the horse. In the 1880’s, the people of New York City shared their town with 170,000 horses. They pulled carriages and street cars, but they also produced 43,000 gallons of urine and 2500 tons of manure every day. The manure spread tetanus and the flies spread typhoid. And the 15,000 dead horse carcasses produced every year were often tossed into the rivers and bays.
Some visionaries saw the new automotive technology as the savior of their cities. And to an extent, it was. The electric, oil, and auto industries – made possible by a free market system that rewarded innovation – soon drove the horse out of the cities, making them livable and improving the environment in innumerable ways.
Today, we are looking for ways to reduce greenhouse gasses caused, in part, by the automobile. I cannot tell you what the solution will look like, but I will bet you this much: That the solution will come in the form of a combination of technology and free-market incentives, and not in the form of government programs, controls, or trade restrictions. I’ll also bet you that whatever solutions we find to the problem of green house gas emissions will produce other problems that we won’t foresee.
So, these are the issues of our times: National security, healthcare, globalization, and energy and the environment. The good news is that the potential of technology to solve our problems is far from used up. In fact, it is just getting started. Let me leave you with a quote from the British historian, Paul Johnson. He said, quote, “The species Homo Sapiens is less than 1 million years old. Civilization has existed for only about 8000 years. The Industrial Revolution occurred less than 250 years ago. We’ve harnessed electricity for only 150 years, and atomic power for half a century. The rate of advance is accelerating very fast indeed, yet the pace is going to quicken at a speed we cannot now imagine. We are only at Chapter One in the story of humanity and its glories,” unquote.
As long as it is accompanied by good judgement and careful planning, technology has much to offer to these challenges. These are exciting times and I’m glad to be around for them.
Thank you.
