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ANNOUNCER: This is a production of Cornell University.
SPEAKER 2: Hope everybody's doing well this afternoon. Welcome back from what I hope was a very nice Thanksgiving break last week. Welcome once again. And finally, I should say, to our ultimate seminar of the semester in the Enterprise Engineering Colloquium Series, we are very honored and delighted to have with us today a very distinguished gentleman, Dr. Ray Johnson, who is a Senior Vice President and Chief Technology Officer of the Lockheed Martin Corporation.
In fact, he's so distinguished that I am not going to introduce him. Instead, I would like to introduce Professor Cliff Pollock, who is the Director for the School of Electrical and Computer Engineering here at Cornell, and also the Ilda and Charles Lee Professor of Engineering. Mr. Pollock.
CLIFF POLLOCK: Thank you. Well, it's my honor to introduce the speaker tonight. Oh, I don't need applause.
[LAUGHTER]
But I have to stand here behind this microphone so I can be heard. Otherwise, I'd wander around with a piece of paper like a professor. But anyway, it's a great pleasure to introduce Ray Johnson today to give us a talk.
As you just heard, he's the Chief Technology Officer and a Senior Vice President at Lockheed Martin. Lockheed is quite a large company. Over 65,000 employees, 4,000 projects. This is a major enterprise, and this is a major leader of that enterprise.
Before joining Lockheed, he worked at a couple of companies, including Modern Technology Solutions, and later SAIC. If you know these companies, especially SAIC is a very big think tank used down in Washington for a lot of defense applications. So he's got a good background. He's currently on the board of Sandia Corporation, overseeing that major company.
What impressed me was he's been a member of the Air Force Scientific Advisory Board. I've served on some of those committees. And he's not only been on some of their studies, but chaired several studies.
These studies are always quite interesting. They take many months of giving trips and interviewing people and finding stuff, and then a very intense two-week summer study where you write a major report and report it to the Secretary of the Air Force or something. So he's not only chaired a couple of these, but served on some others. So here's a person whose advice is sought and valued by many people.
So he's also got a background, which warms my heart, in laser physics, as I do. Has worked with lasers and electro-optic systems. So I know he's a good guy. I'll certify him. So anyway, I'd like to stop there, and we're going to look forward to a talk on strategic and technology for engineering. So Ray?
RAY O. JOHNSON: Thank you.
[APPLAUSE]
Thank you very much. It's a pleasure to be here today. I have been here since early this morning. Well, actually, we came in last night, and had a good opportunity to talk with a number of the departments in the university and hear about some of the research that's going on. So it was a great day.
And what I'll try to do is take some of those themes which I think are important, and in many ways, I think differentiate Cornell University from some of your peers. And I'll just say right up front before I forget it, one of the things that I think is really good and really critical is the idea of the field areas of research. And to bring in multidisciplinary teams, I think that's fantastic.
And if you haven't been exposed to other universities that don't do that and tend to really dig deep holes and specialize, that's a very powerful tool. And I think you'll hear some of that theme, if you will, come out in the talk.
So within Lockheed Martin Corporation, I represent the Office of Corporate Engineering and Technology. And there are essentially three components to this organization. We have a technology component-- each of these is headed by a vice president or more. Technology.
And so there the question is really, what do I invest in? And we'll talk about the strategy for investments. So when you think about the breadth and depth of a corporation of this size or of a university for that matter, how do you decide what to invest in? And so focusing on those investments is a theme there.
The second department, if you will, is engineering. And engineering is principally worried about flawless execution. So if you're in the business of building products and providing services, how do you develop flawless products and flawless services? And how do you do this consistently, uniformly, et cetera?
And then the last piece of the organization is called the advanced concepts organization. And their job is-- we talked about figuring out how to invest in the right thing. The second piece is, what missions or what problems are the customers worried about today? And we'll talk about that.
And then after you've figured out if you did right, what do I invest in and what problems am I trying to solve, then how do you effectively transition these technologies into the products and services and the customer to ultimately make a difference to the customer? That's also one of the functions of advanced concepts. So with that, we'll go ahead and get started.
So when you think about the Lockheed Martin Corporation, what probably comes to mind is a large-scale defense contractor that's been involved in providing national security solutions for the United States and our allies for a number of decades. And so you tend to think of aircraft missiles and spacecraft.
And that well-defined, well-understood mission, which I think was very well reinforced by Cold War activities, is changing. And so when we think about the strategy for research and development investments going forward, what we like to do is start with the next two slides. And the first one, as it says here, are the global socioeconomic trends. And these are forcing functions that are, in fact, redefining what it means to provide global national security.
So let's start with the first one, the role and the power of the individual will change. This is really driven by two things. The first one is the demise of the Cold War. And with the end of the Cold War, what you had was you had two superpowers, the United States and our allies and the Soviet Union. And these two superpowers were engaged in a mutually assured destruction kind of Cold War where each superpower knew that they had the power to annihilate the other one, and they were very afraid that small skirmishes, if you will, would escalate into World War III.
And so we were very careful. The Soviet Union was very careful. And we thought about our actions. We didn't want to make any unintended actions that would be misinterpreted, et cetera. And certainly, all of those nation states within our sphere of influence were also made to behave in that same way.
So with the demise of the Soviet Union and the end of the Cold War, many times, the United States has been called the ultra power now, at least over the last 10 or 15 years, right? Because we didn't really have any peers. And so what that's enabled with that lack of that balance, if you will, in the world, what it's enabled is small nation states and now, in fact, even individuals who have the ability to get their points across, right? Whereas they were really kept in check before.
The second forcing function here is the internet. And I think, of course, there's a lot of research that's being done in this university and other universities as far as internet both in terms of the technical side and the social side, networks, all those things.
But what the internet has done, and I think in 50 years when people begin to read and write about what the internet did and how it transformed the world, will realize that the power of connecting individuals around the world in an instantaneous fashion has really changed the world in ways that we couldn't have even imagined when it was the ARPANET and it first got started.
So we know today that terrorists around the world are able to, in this non-geographic world-- so we've moved from nation states that were principally geographically focused and organized around geography to groups of individuals and organizations that are well organized around ideology. And geography really doesn't matter. They can be anyplace because they're instantaneously connected. And they can use the internet, this instantaneous connection, to get their policies and their principals and their recruiting and their planning, et cetera, and get that all out instantaneously.
So these two things have really increased the role of the individual. I think it's noteworthy that probably most of you in the room know this, the internet was created by an organization that has a .mil after it, and that's, at the time, ARPA. Today, DARPA, Defense Advanced Research Projects Agency.
And the internet was created as a Cold War tool. It was really designed to provide secure, survivable communications in the case of nuclear war. And so because it didn't have central nodes, you couldn't knock out one of those nodes and then knock out the command and control for the United States government. And so it was a military command authority, kind of a shared communications. And now it's, of course, it's interesting that it's being used by terrorists and empowering individuals around the world.
But that kind of naturally leads to the next one, which is the global war on terror, and information attacks are here to stay. Or global terrorism and information attacks are here to stay. We have to think of this as a multidecade problem.
And in many ways, I think this is kind of a product of our own success. We have made it impossible for even nations, but certainly groups of individuals, to take on the United States in a military engagement. Terrorism is probably not a military threat to the United States. It certainly is an economic threat to the United States. Right?
And so imagine-- go back a few years. Position yourself the way maybe parents were positioned or grandparents were positioned after World War II. All right? We had just won a major war. We were the only country on the planet that had the atomic bomb. And we were feeling pretty good. Through the Marshall Plan, we empowered Germany and Japan, these huge economic engines that over the next 40 and 50 years really fueled the world economy.
And imagine how we felt now when Russia or the Soviet Union stole the bomb. And all of a sudden, this huge power that you had, that you just demonstrated the ability to use in Japan and end a world war, imagine how we felt as a nation when that weapon of mass destruction was stolen.
And we didn't have, at the time, everything figured out about mutually assured destruction and the Cold War and balance of power and these two superpowers. We didn't have any of that figured out. We were scared to death. I mean, scared to death so much so that people were building fallout shelters, right? We had kids putting their heads under desks, as though that was going to protect them from 4,000 degrees. Right?
And so over time, we had to develop a method to deal with this, and the method that we developed was a campaign-level complete isolation of the Soviet Union. We affected them militarily. We affected them diplomatically. We affected them politically.
I went to Russia in the early 1990s, and literally, it was like a land that time forgot. They were so completely isolated. We went into Moscow Airport. Big city, right? You'd expect a big airport there. I mean, there were, like, 80, 88 computers sitting on the side that were turned off and not functioning. They really were effectively isolated, and not a big player in the world, right? And so it's that kind of campaign-level thinking that we have to think about terrorism and how we'll we respond to that on a multilevel approach.
The next one, this gets back to my introductory comments about the field area and how you're bringing together people from the various colleges within the university. And so if you look at nano, bio, neuro, info innovations, each one of these technical areas-- nanotechnology, biology, neurology, and information technology-- we all understand that each one of those technical areas in and of itself is reaching tipping points and creating great inventions and innovations, and life is good, right?
But it's really when those things start operating together that you see the power. And those are many of the areas that we're interested in in terms of technical research. So what about a bio-inspired, nanotechnology-enabled information technology sensor, right? Where you really begin to see the power of all these things coming together.
And quite honestly, we saw some of that today as we saw mathematical methods that were inspired by how fireflies communicate, right? It's just a trivial example, but there is great power, and you got chocolate on my peanut butter, right? And getting this cross-disciplinary work. So I think that's a testimony to the way things are being organized here.
Global demands for energy will skyrocket. So I read the other day, you know, arguably, we've reached what's called peak oil production in the world. So peak oil production basically means, I can't easily extract, you know, another billion barrels of oil out of the ground. Put your drill in and oil comes shooting out, you know? There may be oil and shale, and we'll figure out ways of getting it out. It isn't easy, and these large pockets of oil aren't going to be found, likely found in the world, right?
So therefore, we've more or less-- the oil that can be extracted easily, we've more or less reached the peak. And OPEC can control things up and down a little bit, but we're basically there. So it really isn't the supply that I'm talking about. It's the demand.
So the United States has roughly 5% of the world's population. We use roughly 26% of the world's energy. The entire set of developing nations in the world uses roughly 30% of the world's energy.
So what happens now-- this is in the law of big numbers-- what happens now when in particular, China and India with their 2.2 billion or so people, with the transfer of hundreds of billions of dollars to China in the form of manufacturing or the developed nations, the United States in particular, you know, we're hooked on cheap products. They're hooked on manufacturing, right? And so in order to support that manufacturing, they're using a tremendous amount of energy.
And I'm going to talk about it here in a minute when I talk about pollution. One coal-fired electric plant is being brought online in China every day. Roughly 360 a year. To fuel, if you will, this juggernaut of manufacturing.
So in India, it's a little bit different. There's an infrastructure that needs to be built. They don't quite have the infrastructure there. However, there's a human capital component there that is being empowered, and they are building a middle class at a little bit slower rate than they are in China, right?
But small percentages of big numbers are big numbers, right? And so what you're doing is seeing this small change in percentage-wise. And will they use per capita the amount of energy that we use here in this country? No. But will it affect the price point for our oil on the global market? Absolutely.
People argue, well, it's OK. We get oil from Venezuela. Well, it really doesn't matter. It's a global spot market, and it changes every minute. And we're going to be responding to that global need, right? So that's going to affect the national security of the United States, as well as all of our individual pockets as we pay for gas.
So the global war for talent will become extreme. This is something near and dear to our hearts. And not to correct you, but there are actually 140,000 employees in the corporation, and roughly 65,000, 70,000 of them are technical. So kind of half the population in the corporation are technical people.
And the demographics are such with Baby Boomers retiring and growth that were going to be hiring roughly an average of 14,000 employees a year for the next 10 years. Or another 140,000 employees in the corporation, right?
And so the question is, where are you going to find that talent? One of the PhD students that we visited with today happened to have been from Poland, right? And so this just is a testimony to the fact that technology is global.
And if the United States, in particular the government doesn't understand and find ways of dealing with that global talent supply like the Department of Defense, for example, we will be isolated in much the same way that we technically isolated the Soviet Union. We have to find ways of tapping into that global talent.
I'll give you a couple of examples. A name that you may or may not know, Norm Augustine. He's a former chairman of the corporation. He's written a number of books, and really a visionary, a true visionary in business and especially in aerospace and defense.
We correspond occasionally, and he asked me to go out to Los Angeles and meet with a gentleman, a pretty famous guy. He happens to be of Indian descent. He's the inventor of the CO2 laser. So he started a small company using a laser, a particular kind of laser for some chem-bio detection, so I went out and talked to him.
And he told me a story about this Indian gentleman who was graduating from USC. He was the number one engineering graduate, and he really wanted him to come in the company. So well positioned. He's got a company that he owns, a small company, but he can give the guy equity. Very challenging job. Give him management responsibility. You couldn't find more interesting work.
The guy said, I'm sorry, but I can't take the job. Why? Well, gee, let me think. I can get 75% of the salary, 25% of the cost of living. I go back home to India, and I get to be with my friends and family. It's really about friends and family.
So the economic incentive that we had in the United States for a number of years that kept people who were educated here here is in part going away. Because a graduate from Seoul National University who comes to Stanford and gets a PhD in engineering can go back to Seoul and work for LG, Hyundai, Samsung, or any of the other multinational global companies that are there, with the same economic opportunities that they would have here.
Another small example. I did go to India a few times over the last couple of months. Two times over the last few months. And when I was there, one of the small companies I was meeting with was in the business of providing network switches. OK, you know, not exactly a super sophisticated technology, although they expect their company to have a market cap of a billion dollars in five years because of the infrastructure build in India, right?
So I met these three gentlemen, obviously of Indian descent. And in talking to them, the CEO, the CTO, and the chief architect happened to have been MIT, Caltech, and Berkeley, right? Just an example of the fact that we need to think about talent being globalized.
Biotech and genomics revolution will cause people to live longer, healthier lives. You know, there is a promise, and we've kind of figured out cancer isn't a microbe. We're not going to solve it that way. Cancer has a lot to do with cell division.
And so as we begin to understand systems biology, genomics, and proteomics, the instruction set and the building blocks and cell division and really get that, and the fact that probably there isn't this thing called junk DNA. There's things we don't understand about DNA, but the body's pretty efficient. And as we really begin to understand that, we will, over the next decades-- few decades, make real inroads in solving disease problems that will impact longevity and have a dramatic impact on our lives. That's a good thing.
It also is a fact, though, that from a social point of view, I don't know that we've figured out all of the consequences of having people live longer, especially in the West, especially in the developed nations. The largest growing demographic in Japan is 60-plus.
Now imagine how the young generation, who's responsible for taking care of the older generation, feels when all of a sudden, you know, they're not going anywhere. They're living longer, right? And there's huge social pressures. And so if you do the math and things don't change, if you fast forward 30 years, Western Europe's not a fun place to live anymore. You've got a declining population, you've got declining economies, et cetera. Even with this longevity extension.
Globalization will change America's relative economic position and relationship with other nations. That's kind of been what the theme has been here. This is a globalization theme. And so we've had the wonderful opportunity of living kind of in an asymmetric world over the last 70 years. 60, 70 years, right?
What did we have, again, after World War II? We did, through the Marshall Plan, put in place these huge economies in Germany and Japan, who were our allies. We isolated the Soviet Union. We didn't have to worry about them. China was very nascent as an economy and in the world. And so we had friends to the north, friends to the south, big water, big water, right?
The world is flat, as we know now, and so things are different. And so we have to think about global competition in a way that, quite honestly as a nation, we haven't had to think about before.
And then finally, I alluded to it earlier, but global climate change and pollution threatening the biosphere. And so what we're really talking about here is not global warming. We're talking about pollution. We're talking about being able to grow food and provide water to people on the planet.
And the fact that during the Cold War, you probably hear about it today where we now have cleanups that we have to do, whether it's POL areas or munition storage plants or nuclear facilities or whatever, there were shortcuts that were taken. And even as a rich nation, we took shortcuts and ended up with pollution. If you go to Russia, what you'll find is that there are entire areas of the country that are uninhabitable because they took even greater shortcuts, right?
So today, there are countries that are taking those shortcuts. And they're doing it because they have to, because they have a job to get done, and they know they have a job to get done, and they don't have the resources or the time to be as careful as they probably should. So if you've read about the Beijing Olympics, you'll find that they're worried about pollution and its impact on the Olympics and on visitors, et cetera, et cetera.
I was talking to a gentleman the other day, and he was telling me about-- and it doesn't matter what city it was in-- but it was in a country, a developing country that does have a pollution problem. And there was a particular process that was being done by this device, if you will, that was put in the country. And there were standards of cleanliness of the air that came out of this, right? Out of this machine.
And the fact of the matter was that the air that came out of the machine was cleaner than the air that came in. So not only did it not pollute. It actually, through the cleansing process, the ambient air was dirtier than the air that was coming out. So that gives you an idea of the kind of pollution that exists in places in the world.
So now let's move from socioeconomic to some global technology trends. So the first one is going to be real easy for everybody here, and it's one that a lot of the research today is taking advantage of, that I saw today is taking advantage of, and that's ubiquitous sensing in communications. And mostly wireless, right?
And so we know just how connected we all are and how you can pick up a phone and call somebody, and you have no idea except if they're in Germany or-- I mean, in Japan or Korea. You know, you can pretty much take your cell phone there if you have a GSM phone. You can pretty much take your cell phone there and use it. So when you call somebody, you have no idea where they are.
And that trend is increasing, and the rate of change is increasing. And not only are people ubiquitously connected and there's a lot of sensing going on that's in part driven by the global war on terror, but it's in part driven because we like information, right? Not only are things ubiquitously able to communicate, but they're also networked. And I also saw some great example today of the next generation of networking and exactly what that means.
And so those two things lead to the third, and that's data everywhere. We're literally buried in data. And we have to figure out ways, as it says, decision support tools. We have to figure out ways of dealing with that. That's an important research area for us as a corporation.
So how big a deal is it? Well, it's a very big deal, because even now, we've taken a noun and made it a verb, right? We Google things, right? That was a noun. It was a company's name. Now it's a verb. And we know how powerful Google is and how powerful some of these search tools are. But compared to where we'll be in five or 10 years, they're absolutely primitive.
You know, so you remember syndicated TV, a show called Star Trek. You know, before William Shatner got big and became a lawyer and liked scotch, right? So he used to say, he'd go on the bridge of the Enterprise and he's say, computer. You know, yes? You know, what sector are the Romulans in? Blah, blah, blah. Get the answer, right? So it was voice recognition.
And I didn't mention this before when I talked about nano, bio, info, et cetera, et cetera, you know, that's in large part driven by money that's going to come from the Baby Boomers. The Baby Boomers around the world, in particular the West, has amassed trillions of dollars worth of retirement income.
Keep in mind, this is the Woodstock generation. The Woodstock generation doesn't want to give up on all the things they've been used to, right? The ski trips, et cetera, et cetera, et cetera. So if you find ways of enhancing your ability to be what it is you are, whether it's artificial knees or skin or memory or whatever it is, you're going to take advantage of that, right?
And the same kind of thing is happening here. There's going to be a huge influx of money as Baby Boomers lose the ability to use keyboards, lose the ability to see the screen. They're going to have voice recognition technology and improved semantic search devices, and the ability to access that information is going to be great.
I'll mention as an aside, and it probably won't be-- it'll either be more meaningful or not as meaningful here because you're a part of it. But as a corporation, we find it fascinating. We essentially have a bimodal population. There are the Baby Boomers. There's kind of a gap in the middle, and there's kind of new people who have been in the company five or less years, right? There's bimodal distribution here.
And so the people who have been around for 20 years, when they went to school, it was a memory game, right? So principally, the undergraduate degree, they spent a lot of time memorizing things. And you know, there was certainly theory there, et cetera, et cetera. But there was not the ability to easily gain access to facts like there is today. I mean, you can get on-- you can SMS, Google, you can get-- and instantaneously have facts, right?
You may be able to ask people 6.022 times 2 to the 23rd, what is that? Well, it's Avogadro's number, number of atoms in a mole of a substance. You may or may not know that, but you know what? We can look it up.
So what we find in new graduates is not so much facts on the tip of the tongue, I can look those up, but the ability to think and know where to find things. And we used to call that a master's degree. And so what we're doing is we're finding much more sophisticated students coming out of universities today who haven't had to focus all the duty cycles on facts, and are able to spend more time thinking, more time on projects, more time getting real life experience, and that's a really good thing.
But again, in terms of our ability to access the amount of information, which by the way is doubling about every six months, the ability to keep a handle on that and access that information, we're really at the primitive stage.
Information is the fourth weapon of mass destruction. So we know about chem, bio, nuclear, right? And so what I don't mean is information's going to tear buildings down. What I do mean is it can be devastating economically.
And so we had some discussions today about information assurance to use a term. So information security. It's a very, very important topic. And so you probably, if you think about it, it'll make sense to you. But the dependence that all of us have on information technology is absolutely frightening. It's critical to the way we live.
From the time you woke up this morning and flipped on your lights, the SCADA information that controlled the utilities and the vulnerability of that to when you stopped and used your credit card to buy gas to the phone calls that you made, information technology is pervasive in everything that we do.
And also unfortunately, each one of those areas has its own set of vulnerabilities. And so the ability to secure that information and protect us from those attacks is critical. So imagine, for example, if Visa transactions around the world were stopped for a day or two, and just what kind of impact that would have on global commerce.
Unmanned everything. A little bit overstated, but not much. And so what we're finding is that there are several reasons that the Department of Defense is investing in unmanned systems.
And so you had-- you may or may not know it, but some work down here in the Urban Challenge, which was a DARPA project to take an unmanned vehicle and drive it in an urban environment, obey traffic laws, and do it safely and do it rapidly, right? Great-- I mean, literally fantastic work that the director of DARPA a few years ago had a gleam that this might happen, and I think had no idea that six people would finish this race that they sponsored.
So let's kind of separate air and ground, right? And maybe a little bit of undersea and sea surface. But certainly, air systems. What's driving that? What's driving it is persistence. And so persistence means, of course, the ability to steer, the ability to be there when things happen, right?
Unmanned systems don't have a human in them, and so therefore, they don't have to go back down to the ground and do things that a human would have to do. They can stay up for longer times. In fact, DARPA's doing research today on unmanned systems that can stay unrefueled overhead for years, right? Not weeks, not months, but for years.
And so why is persistence important? I hinted at it a little bit earlier, and this theme probably comes out in the technology area a little bit more. But we used to develop systems-- many of the intelligence surveillance and reconnaissance systems that have been developed were developed with the Cold War in mind. So it was order of battle. It was counting ships in harbor. It was looking for tanks coming down the Fulda Gap. It was those kinds of things.
Today we are interested in that, of course. But we are also interested in individuals. And so when you think about individuals, how nice would it be to have a persistent censor sitting over Cave 112 in Afghanistan or wherever that could grab a look of a really tall guy when he comes out of a cave to see the sun for five minutes this month?
And if you're not there to see the guy come out for five minutes this month, he's going back in the cave, and you just lost your opportunity. You've got to wait another month, right? So persistence is very powerful when you think about these fleeting glimpses of information.
And on the ground, ground systems are really driven by what we call the dull, the dirty, and the dangerous, right? And so you know today that several thousand people have sustained injuries to their extremities. So blindness and arms and legs, right? Because we do a pretty good job today of protecting the core body organs. Flak jackets, et cetera, right? Protective armor.
But what happens with IEDs and other things is arms, legs, vision, not so well protected. Right? So what we'd like to do is develop systems that have the ability to do some of those jobs so we don't have to put people in harm's way. And quite honestly, the war in Iraq is feeling that.
And then I think the third thing is what I alluded to before, and that's the power of autonomous systems. And the fact that autonomous software for autonomy is getting better, getting-- Moore's law is our friend, right? And we're able to do things that we were not able to do before. And so those things are fueling the drive to unman things.
And so what we'll probably see there is a lot of mixed mode operation. In the air, what you'll see is a manned aircraft with unmanned wingmen. You know, things like that. And same thing on the ground.
The bio revolution in health care. This speaks to what I alluded to earlier, and that's the understanding of the genome and proteomics and not small molecule drugs, therapeutic and diagnostic drugs. Not chemistry, right? But in fact, really protein-based drugs that are well understood and tailored.
And I heard a comment made a week or so ago, and I think it's very fitting. And what they said was, these problems are not going to be solved by biologists. They're going to be solved by physicists. So if you think about physics 150 years ago, all the problems that physicists were trying to figure out-- modeling the world around you, right? Whether it's optics or diffraction or whatever it is, right?
So physicists through experimentation, the scientific method, et cetera, they figured out all these models to include nuclear energy. All these models that describe mathematically the world around us. We don't have a good mathematical description of the biological world at the genome and protein level, right?
Again, a little bit overstated for effect. Drug development today, right? Go to the rainforest, grab some stuff, bring it into lab and grow it. See if it kills you. If it doesn't, check for efficacy. It's not too far off, right?
Now imagine what happens if you have a numerical understanding and an analytical understanding of how drugs are developed. What we're going to find is a tailoring of drugs for individuals, for groups of people. Something work-- a change in dosage. So maybe one person, a particular dose works better for that person than the other one.
Directed energy is a reality. So directed energy in the form of, as an example, airborne laser where airborne laser uses directed energy, a chemical oxygen iodine laser to shoot down ballistic missiles in launch phase, right? That's an example, but it's only one example. The sources of the pointing and tracking and control mechanisms, all of those systems are becoming very sophisticated. And what we're going to see is as we call it, [INAUDIBLE], the speed of light being used in a lot of different ways.
And then the next one is microsatellite proliferation. This one will be near and dear as there is, in fact, a satellite being built in the university, designed to help do some observations. And it's a very small package, a couple satellites about this big. So the cost to launch scales with weight.
And the fact is that if you have a small package, you can launch it for less, and you can hitch a ride in another system. And so what I usually say is even universities can afford to put together satellites, experimental satellites and payloads, right?
So that's a good thing, but it also means that, generally speaking, a larger set of people around the world have the ability to launch these systems. And so it's not just ISR systems. It's also systems that can have kinetic things on them, park next to bigger systems and do other things, right? So you have ASAT and anti-satellite things, et cetera.
And then finally, global [INAUDIBLE] warfare. And the fact of the matter is that technology proliferation isn't just for good. Technology proliferation to do bad things is also out there. You can go on the internet today and you can find out how to do all kinds of bad stuff. You can make IEDs, you can make chemical weapons, you can make biological or engineered biological weapons. All that information is out there.
And unfortunately, because of that, because of my previous slide, that first bullet, the ubiquity of communications, the fact that everybody's connected, people, small groups of individuals can, in fact, find out. And because it's also generally cheaper to do things now, they can use that information in a bad way.
Let me spend just a minute talking about innovation. Innovation is an important subject for us. It's actually part of our logo. We talk about innovation. And as part of the way we think as a corporation.
I like to separate the term invention from innovation. So invention in my definition-- these terms are overloaded, and so not everybody uses them the same way. But when I say invention, I mean the creation of the idea, that thing for which you'd get IP rights for, right? This is the thing that you send in to the patent office.
And when I say innovation, what I mean is the application of that invention to products and services. And as a corporation, we're much better at the latter than we are at the former.
That doesn't mean that we don't have inventive people. It doesn't mean that there aren't inventions created. It means that generally speaking, of those 70,000 technical people, every day they get up, they're thinking about the products and services, not about the new carbon nanotube. Right?
So what does that mean? It means that the last bullet, we need to find ways of working with people who are really thinking about the inventions, right? And that drives us to universities and to small businesses. And that's one of the reasons that we're here is because we're looking to you for your inventions. We think we're better at applying those inventions, but we think you're better at creating them.
When I say innovation, a lot of times most people think technical innovation. But innovation can occur in many different ways, and I want to give you just a few examples.
In fact, the first example is one in which technology lost. So this was Beta versus VHS. So there was a VHS tape. Everybody knows what that is. There was a device made by Sony Corporation about the same time. The research was done more or less concurrently, a little bit later. And it had a superior recording format, the cartridges smaller, the box was smaller, a higher density recording, better picture. So why aren't we all using Betamax instead of VHS tapes, right?
Well, the reason is that they were late to market. And so what happened is VHS got out there, and then the Betas were released. And the early adopters, you know, couldn't convince people to buy the second one.
So the story goes something like this. The male early adopter goes and buys a VHS tape, brings it home, finally convinces his wife that she can record HBO. And you know, this is a good thing. She gets very used to using it. Eight months goes by. The Beta comes out. And by the way, that VHS machine cost $700.
All right. Eight months later, the Beta comes out and said, OK, by the way, I want to go buy this new device. Well, why? Well, because it has a better recording density, et cetera, et cetera. Let's go look at it. You looked at the picture and you couldn't hardly tell the difference. The answer was no. Well, the end of the story is that Beta didn't proceed and VHS, an inferior product technically in every way, ended up winning.
The second one is systems, Apple and iPod. I think this is just fascinating. And that is that what Apple Computer had was a super sophisticated operating system trapped in a box that was twice as expensive as the competition. And so they had 10 years ahead of the competition at least an icon-based, mouse-driven operating system trapped inside a Macintosh computer that they insisted on keeping closed architecture and was very expensive. And as soon as the IBM clone came out, basically game over.
But they learned their lesson, I think, in the iPod. And so what they did in the iPod was had more or less an open architecture system. You can imagine sitting around the room with Steve Jobs, talking about iTunes, and the fact that we will force people, if you will, to download songs at $0.99 a copy. Not a big deal. They don't have to buy the whole album or CD. They can buy a single song at a time. And they're spending $3 for a cup of coffee, so what's the big deal?
Well, better sense probably prevailed, and what you have now in iTunes is a nice interface, but the ability to load your own songs off CDs rather than having to download them. You can download an occasional $0.99 song if you want to. But what that led to is huge ubiquity, over 100 million of them sold, and again, the rate is increasing.
In manufacturing, Toyota and Honda. So many of you in the room probably don't have experience with this. But around 1985, I bought a Honda Accord, and I had never seen one. I was living in Dayton, Ohio at the time, and I went to the dealership, and it was like the Maytag repairman. There were three guys in the showroom floor. There were no cars. They didn't have one to show me. And I ordered one, and they said, it'll be here in eight to 10 weeks.
And by the way, I paid $2,000 over list. Why did I do that? Because of reliability. Because for some strange reason, American cars, we're giving you a 36-month warranty, and at 38 months, major components in the car were breaking. Engines, transmissions, et cetera. I mean, seriously. Real problems, right?
So what Japanese manufacturing techniques did was transform the reliability so that today, all cars made in the world are much more reliable than any cars were 20 years ago. And so reliability is a factor in our decision to buy a particular car. Not a big one, though. In fact, usually it's features. It's style, it's color, it's features. It's those kind of things. Almost all cars made in the world are reliable today.
And absolutely, I don't know statistically if this is true, but certainly automobile manufacturing is one of the most globalized industries in the world. You can't tell where cars are made or where their parts came from without reading the small print on the side of the car. You go try to find the, you know, mom apple pie Chevrolet. Most small Chevys are not made in the United States.
Process at Dell. This one also is very interesting, and it's topical in that it's changing right before our very eyes. And so Michael Dell figured out that inventory costs money. And so if I go around the room and take a survey about what kind of computer would you like, a 100-gig hard drive, 1024 RAM, video card, 60-gig hard drive, et cetera, et cetera, you can imagine the number of combinations and permutations that I get.
And if I try to keep that inventory, it's going to cost you money. Because when I sell that system to you and pull it off the shelf and ship it to you in 24 hours on a $3,000 box that I'm going to charge you $150 for the price of the few percent of the total revenue that I have to keep, the total inventory that I have to keep back here, I'm going to have to pass that on to you as a consumer, right?
So Michael Dell figured out rather than do that, give me two weeks, and I'll make it for you. So you get online, you put your order in, and in 10 days to two weeks, you get your computer at $150 less.
Now that may or may not be a big deal. We're all kind of instant gratification people. Maybe we go down to Best Buy and we buy an HP, right? But if you're at Lockheed Martin Corporation or the US government and you're buying 10,000 of them this month, I guarantee you, $150 a piece is going to drive me to buy Dells. And what that has done is-- what that did is drove Dell's entry into the commercial market and the government market at a huge rate, and completely outpaced the competition.
Now what happens? Price point goes down. So the percentage states relatively fixed. Price point goes down. Now all of the sudden, instead of $3,000, they cost $400. Now instead of $150, we're talking about $19.95. For $19.95, I'm going to go to Best Buy, right?
So what this has led Dell to do is not ignore the call market or the internet market, but not rely on that. So they are now selling in Walmart. They're selling in Staples and other places like that where you can actually go in and buy more of a commodity machine rather than the order to you, right?
And the last area is inventory management and Walmart. And so imagine that you have a company that there are over a million employees in, 10,000 stores. How do I sell a little bit less in this hypercompetitive market? How do I sell a little bit less than the competition? I do it by getting a little bit-- squeezing a little bit out of inventory control.
And so inventory management, if you've ever been to or seen a distribution center in Walmart, they're just absolutely fascinating places. And so they move these huge pallets. They have hundreds of trucks outside where they're distributing to all the stores. It's all completely automated and very sophisticated.
So you may have heard that Walmart-- not recently, a few years ago-- developed a mandate that products sold in the store would have RFID tags. That's principally because the velocity of commerce won't allow them to take the time to read the barcodes on the skids. They have to have a higher velocity of commerce. And they can do complete inventory management easily within the store. I mean, if they were able to implement it, it would really change things.
So as a company, we have to think about how we act and how we reinforce behaviors that are important to us regarding innovation. And so the cultural, legal, and rewards have intended and unintended consequences, and we're focusing on those and trying to make sure that we reward innovation. And as I introduced earlier, relationships with people who are more on the invention side are important to us as a corporation.
I'm going to change topics here just a little bit. There are probably two main things that I'd like you to remember when you leave today. The first one is on this slide, and that is that successful technology development and integration of products and services requires a convergence of technology, strategy, and business. And why is that?
Because each one of those people or organizations bring a little bit something different to the table. So think about technologists. Maybe of you in the room are technologists. What do we learn?
From the time we enter probably high school or undergraduate education, what we learn is eight DB are better than six. We strive for perfection, right? 100% solution when, in fact, an 80% solution with the right kind of conops, concepts of operations, it can be very effective, we still as technologists try very hard to get 100% solution.
What does strategy bring? Strategy brings a very global perspective. They bring an enterprise view. They're not trapped within a local neighborhood of their business, right? So they bring a view that is difficult for the businesses to acquire.
So what do businesses bring? Businesses are driven by technical operations. And what I mean by that is temporally technical. They have revenue targets to meet for this quarter, for this year, for this three-year period. So they're driven to make decisions, as you would want them to do to be successful, more tactically.
But what do they bring? They bring the customer intimacy that neither the technologists nor the strategists can bring. So by bringing those three together, that's when you really get the power and the ability to integrate things into technologies, successful technology integration into products and services.
The graph here, also this three axis. Also if you look at the apex, this is where we like to live. We really like incremental solutions, current businesses, and current mission and concepts of operation. When we get out to next generation and more radical technologies or new business models or new concepts of operations or new missions, we get less comfortable.
So the second area that I wanted for you to remember is that-- so I mentioned the 70,000 technical people in the company. So imagine if we go out, or I go out and ask a question. What technologies should we invest in? Imagine the range of answers that I might get. They're going to be in large part driven by what those people are working on today, right?
So the second main theme is focus. And so what we have developed here is a focusing mechanism. And I'll tell you in just a minute or two a second focusing mechanism that I hinted at when I did the introduction. But we have developed a focusing mechanism called the strategic technology threads. And what they do is they provide a focus for the money that we invest in research and development every year in the corporation.
So there's a criteria that we apply to select these 14 strategic technology threads that you're going to see in a moment. The first one is significant growth potential. And what that means is these are problems that customers are worried about, and we think as a corporation we have products and services that can help satisfy that need.
It's a little bit of follow the money, but it's more broad than that. It means that we believe that there's a market there that can be developed and that we can compete in that market.
The second and third say that there are many applications that span multiple businesses within the corporation. So it's not a single business working on a single product. It's broader than that. And so that kind of is the answer the question of, why should we invest in it at the enterprise level rather than having a business invest in it locally.
And then the last criterion here is alignment with the future, and not fighting those trends that I talked about in the first two slides. So these are the 14 technologies that were interested in within Lockheed Martin Corporation. And they are in alpha order, not priority order.
Let me give you just a few examples. And I'll tell you as I introduced these, this is written in chalk, not chiseled in stone. And do we think these 14 technologies are right for today? You bet. Broadly vetted across the corporation, and they are selected and we're happy with those. But we're open to change, and they will likely be different. Not 14 new ones, but there will be change occur on a semi-annual or annual basis. Not every week.
And so the first one and the ninth one kind of go together, advanced active and passive sensing. And what this has to do with is kind of the changing mission needs. And so global war on terror as an example. So rather than large power aperture sensors that are designed to do order of battle calculations, we're a lot more interested in individuals. We're a lot more interested in the urban environment.
And how do you do that? So you invest in things like laser radar and distributed information surveillance and reconnaissance and attack. So distributed systems that can collect the kind of information and fuse the information. So sensor fusion is also a component of that.
Number two, advanced software. A lot of detail behind that. I think you'll kind of understand what it means. Number three, autonomous systems. We talked about that. Number four, bioinformatics. That's the numeric side of biology, kind of adding analysis and math to biology.
Biometrics. Those are all of the things that identify us uniquely as humans, whether it's iris or fingerprint or gait or all the other ways that you can tell humans apart. Chem biodefense and response, decision support systems. And there's a lot of detail. That's a big word in terms of the content there and a lot of detail below that. But it has to do with semantic systems, et cetera.
Directed energy. Distributed ISR and attack. I spoke to energy and power, where that is the integral derivative relationship, not propulsion. And so we're thinking about things from fuel cell research to large-scale power grids. So a broad range, but all those things that I talked about in energy and power and why they're so important.
Information assurance, the things that you might do defensively to protect your information. Information operations, the things you might do offensively against other people's information. Nanotechnology, an area that is critically important obviously to the university. Also important to us.
And so this was an interesting one. I'll tell you before I forget that even though there are 14 technologies listed here, this year we're more heavily invested in two of them than we are the other 12. And those two are laser radar, number one, and a nanotechnology project in number 12.
And so nanotechnology, I was asked one time, so the US is investing roughly a billion dollars in nanotechnology a year, the world around $2 billion. So why would you-- pick a number, $50 million-- why would you put $50 million into something that is so heavily invested in? If we were investing in bench research, then it'd be probably not a good investment. But that's not what we're doing.
What we're doing is working with people who are doing that. So there's something called technology readiness levels, and technology readiness levels kind of define from materials to components to subsystems to systems to weapons systems. It's a scale of one through nine.
And all along there, if you decompose the requirements of a weapon system or a system into its component parts, then you can begin to understand what the requirements are all along that TRL scale. And that's what we're doing. And we're working with individuals, companies, universities, et cetera, along that scale to make sure that the materials, the components, the subsystems, and the systems all meet our needs.
Predictive and responsive logistics. These are kind of Walmart on steroids. These are the things that you can do in the area of logistics. 75% of the cost of a weapons system occurs after it's fielded. Right? So logistics, that's really in a long war, like we've been in in Iraq, that's a huge expense for the United States, and there's a lot of work that can be done there. In the 14th area, signatures in phenomenology. Think of that as stealth technology. Still an important area of research for the country.
OK. So what did we talk about today, this afternoon? We talked about global socioeconomic and technology trends and the fact that those are strong indicators of the definition of national security and what it really means to provide that to our nation today.
We talked about the fact that inventions and innovations are different, and that we're interested in both of those, and they're both very important to solve the very complex problems that we're facing today and will face in the future. I also talked about those two things at the bottom here that I'd like you to walk away with, and as technologists especially, you're getting some of that experience through the projects that are being done within the university.
But the key to success is that convergence of technology, strategy, and business. All those people bring something different to the table, so it's important early on in your careers to learn to embrace them. Bring them in. They're here to help, and they really can make your projects more successful.
And then finally, focused technology investments yield the best results. You get away from the so many technology, so little time kind of thing that happens if you're not careful. OK? Thank you very much for allowing me to come and talk to you today.
[APPLAUSE]
So we're right at 5:30. I don't know if you want to do any Q&A. Probably everybody's got to do something at 5:30. But if you don't, I'm happy to take any questions.
SPEAKER 2: I think why don't we take a few questions, and if there are more, we'll take them all.
RAY O. JOHNSON: OK. That's fine. Yes, ma'am?
AUDIENCE: You mentioned about technology [INAUDIBLE] sending to our emails or a credit card use, and each of them has their own problems. Obviously, if you aggregate all of them to try to find a solution, that has its own vulnerability. So what suggestions would you have to solve these vulnerabilities and protect our information that is effective and efficient?
RAY O. JOHNSON: I don't have a simple answer. I really don't. I think that-- I mean, it is a huge area of research. We spent actually an hour with one of the experts in the universities today. Actually, one of the experts in the nation, thinking about information security.
I think the point is that the kind of-- we talked about things like-- I won't try to repeat the hour conversation, but different kinds of vulnerabilities and how you might protect at the operating system level versus at the-- let me give you just a simple answer, I guess, what I don't think it is.
What I don't think it is is doing simple things like limited access or firewalls or things like that. I think we have to think about a much more complicated answer that I believe, because of the fact that it's so ubiquitous, the basis set for solving the problem is not three elements. It's much bigger than that. And there may be some common terms and some common themes across that set of vulnerabilities, but I think we almost have to look at each of those vulnerabilities individually, and then see if there's some commonality across the set. Any other questions? In the back.
AUDIENCE: Yeah, what is directed energy, point number eight?
RAY O. JOHNSON: Yeah, directed energy is using electromagnetic energy or light to cause effects. So the airborne laser uses a chemical oxygen iodine laser on board a 747 to direct light energy at ballistic missiles to destroy them. Right? But you don't have to have that high power and energy. You can use much lower power energies.
For example, there is a particular kind of device that you've probably, in electrical engineering, heard of the skin effect, right? And so it's the penetration depth of electromagnetic energy. What this particular-- and I honestly don't remember the particular frequency-- but there's a particular frequency that the skin depth is about skin depth. And because of the water on the eyes, it won't hurt you.
But you can point this high-energy device at people, and it causes them to feel as though they've opened an oven, right? And so it heats the skin, and they very quickly move in directions that you'd like them to out of the beam, right? And the nice thing about it is it causes no harm to the individual, right? So it's a non-lethal way of crowd control and behavior, and things like that.
But there's a much broader range of tools, if you will, that are going to be developed, because the sources, the electromagnetic and optical sources are getting better. And more importantly, the point tracking and control and compensation and all those things are getting better. And so we're going to see more of those kinds of systems.
So you think things are moving fast until you compare them to the speed of light, right? Then then all of the sudden, everything's moving pretty slow. And that's the advantage.
[FINGER SNAP]
You can get there in a hurry, right? Any other questions? Again, thank you very much.
[APPLAUSE]
Dr. Ray O. Johnson, Senior Vice President and Chief Technology Officer of the Lockheed Martin Corporation, presented a talk entitled "Technology and Engineering Strategy" in Philips Hall on Nov. 28. The talk, sponsored by the Cornell Engineering Alumni Association, was part of their Enterprise Engineering Colloquium, a series of talks open to the public that bring distinguished lecturers to discuss engineers' involvement in the work of business and other enterprises.
