What Happened When Ash Carter Crashed Davos
The defense secretary's legacy may have been forged in the Alps, connecting economic elites to the Pentagon — and the war on terrorism.
DAVOS, Switzerland — Past the luxury shops, black cars, and pop-up spaces opened on tiny ski-village streets by iconic banks and technology giants, U.S. Defense Secretary Ash Carter came to the World Economic Forum with dual messages. One for world leaders on this global stage: get into the fight against the Islamic State. And a second for corporate leaders: join forces with the Pentagon and get into the business of fighting for something bigger.
In a way, Carter’s Davos mission encapsulates his probable legacy as President Barack Obama’s final defense secretary. The methodical technologist and government servant who rose through the political-appointee ranks has about one year left to make his mark on the job. Over the past few months, as Secretary of State John Kerry has focused on Iran, Carter has become Obama’s point-man for the war on ISIS. Ordered to “accelerate” the U.S.-led campaign, Carter has since September tried to cadge additional forces and finances from America’s allies. On this European swing, he stopped first in Paris, where attacks in November renewed the continent’s fighting mood. There he laid out his plan to key coalition partners: follow December’s liberation of Ramadi with one-two punch invasions of Mosul in Iraq and Raqqa in Syria. He also announced a Brussels conference next month where he expects at least 26 nations to come with additional offerings.
But Carter also wants to put the Pentagon on a firmer footing as a government agency for the new era of terrorism, massive employer of personnel, and driver of technology. His solution: lure the world’s most innovative minds, firms, and business leaders to work with the federal behemoth.
“Some of you may know I’m a technologist myself,” Carter said, with a tint of natural stage charm you might not expect from a nuclear physicist-turned-technocrat in wire-rimmed glasses. The guy got his doctorate in theoretical physics at Oxford in the 1970s, then worked at MIT and Harvard. Eventually, Carter’s career began to swing between science and policy. He served as assistant secretary of defense for international security affairs, perhaps the most influential strategy post in the Pentagon. He did time in private investment firms and at Goldman Sachs. He then again served as the Pentagon’s chief weapons buyer and acquisitions chief, and rose to the building’s No. 2 job as deputy defense secretary. “And when I started out in this business ... when I began my career — and I never expected to be in defense, but it was a reflex. It was a part of the culture of technology to have a connection to defense. It was also true that most technology of consequence originated in the United States, and much of it in connection with the government.”
Carter, like many defense officials lately, argue the U.S. is losing its technological advantage over its adversaries – especially China and Russia. Perhaps no defense secretary has devoted so much personal attention to reaching out to the private sector. He also needs help turning the Pentagon into a flexible employer for modern careers and families. “So I’m trying to build bridges — one of the reasons I’m here — to the tech, innovative community that are as strong but different as the ones I grew up with.”
The good news, he says, is that people are biting on both of his lines. After receiving the formal go-ahead on the counter-ISIS plan in Paris, Carter was warmly received in Davos. His staff moved figurative mountains to accommodate a late decision to attend the elite conference in the Swiss Alps. Some of his staff bunked six to a room in a hostel, while others in his and Kerry’s traveling party found hotels nearly an hour away. For the effort, Carter landed meetings with Microsoft’s CEO Satya Nadella, Hewlett-Packard CEO Meg Whitman, and others. His name joined the conference’s top (American) billings, like Vice President Joe Biden, Kerry, U2’s Bono, and actor Kevin Spacey.
There was a buildup to get here. Last year, Carter flew more than once to Silicon Valley, where he’s set up the Defense Innovation Unit Experimental office, or DIUX, met with Facebook’s Sheryl Sandberg, venture capitalists, LinkedIn, and others, about everything from recruiting to investing and how medium and smaller businesses could work with the Pentagon. With ISIS raging, his love for tech attention drew attention in some crowds, and drew skeptics.
But Davos is a step up from Palo Alto. Carter is the first defense secretary to appear here. Klaus Schwab, founder and CEO of the World Economic Forum, invited Carter with reason. He is known here from previous Davos appearances, in other roles, and global security news is just inescapable, driving even economic conversations.
“Of course we all know about the Department of Defense, but actually you are also the CEO of the largest enterprise in the world, ” Schwab said as the two settled in for a one-on-one onstage chat. The introduction immediately put the Pentagon boss in more fitting context to what historically is viewed as the world’s most posh gathering of financiers, bankers, ministers, and economists.
It’s in fact a truly working conference, deep within walls of security that offer few views of alpine scenery. Carter probably could have walked through the convention hall unnoticed. This is a place where CNBC, Bloomberg, and CNN’s Richard Quest broadcast live interviews with heads of state, CEOs of Morgan Stanley and finance ministers of India. Here, Bono’s appearance didn’t even fill the main hall seats by half, but the IMF’s Christine Lagarde, aka the “Darling of Davos,” turns every head when she walks through the room. Rep. Darryl Issa, R-Calif., eyes fixed on his phone, shuffled anonymously past the “Health Bar” serving Green Machines and juices. In 2014, Issa was the wealthiest member of Congress with an estimated net worth over $350 million. U2 has made $500 million the past decade easily, though Forbes declares Bono is apparently not a billionaire, “yet” (after some erroneous Facebook investment reporting). Lagarde’s personal net worth ranges around or below a mere $5 million but she manages the IMF’s coffers, lending out hundreds of millions with the understated mission “to ensure the stability of the international monetary system.” Still, Carter had no problem filling his Davos date book with interested comers. After all, the Defense Department’s budget is more than $600 billion. This year, alone.
Is it business, or is it patriotism?
“One of the things I wanted to do here, was talk to the leaders of major enterprises,” Carter said. “They have the same issues I do. They need to stay ahead in a competitive world of technology and they need to compete for talent. Is there anything they can teach me? We'll always be different, because we're the profession of arms. But I still — I would like to learn what the best are thinking and the most innovative people. And by the way, I want them to be part of our enterprise too.”
And there’s the big question. Will Davos fight? After all, is war good for business? Carter’s previous speeches this month in Tampa and Paris asking for counter-ISIS fighters and money use a different language than when he asks for help managing the DOD workforce, pitching corporate executive-colonel job exchanges, or selling America’s big data prowess. But it’s the same ask. He’s asking the men and women wining and dining at Davos to consider getting into the fight. After the Paris attacks of last year, something may be changing.
“These are people who want to make a difference in the world,” Carter said, from the stage. “That's why they’re here. That's why they’re in the positions they’re in. One of the ways they can make a difference is by helping us.”
So is it working? The results from the Pentagon’s encampment and tour stops in Silicon Valley aren’t in yet. But after Paris, California, and with Washington and European capitals pushing to step up the war against ISIS and terrorism, here in Switzerland, it appears Carter was warmly received.
“I think the secretary’s found people in the tech and business community who are just as concerned about America’s security and are just as patriotic as anybody else,” a senior defense official told Defense One.
On stage, Schwab fed softballs to Carter, underscoring to Davos-goers that they, along with the rest of the global economic community, must do their part to fight terrorism.
“Do you see a better pact between business and — and the Defense Department in general?” Schwab asked. How much does the world “really need a coalition between business and defense on a more global level?”
“That's absolutely necessary, in my judgment,” Carter replied, “because for public officials to protect the public space so that private companies and people can do what they're supposed to do, I need their help in today's world, which means I need their understanding. And it can't be me just telling them what to do, because I don't have that power. I've got to meet them halfway. And so I'm talking to people here about, for example, how to help us counter terrorism.”
Carter recognized the private sector has its own concerns, like privacy and Internet freedom.
“I can’t dictate solutions to that. I’ve got to work with the private sector, and that’s true in logistics. It’s true in personnel management. I’m part of society and I’m most successful when I work with those.”
Schwab prodded, “So defense, in the broadest sense, is not just the job of the Defense Department, it’s the job of all of us?”
Carter replied, “Now, that's a very wise observation too, Klaus.”