Hudson Institute: Driving NATO’s Military Transformation Agenda Forward


Ahead of the NATO Summit in Brussels, Admiral Manfred Nielson, Deputy Supreme Allied Commander of Transformation at NATO, joined Hudson to discuss NATO's efforts to adapt to a new security environment characterized by disruptive technologies and hybrid warfare tactics.

NATO’s Allied Command Transformation (ACT), which Admiral Nielson helps lead, is NATO’s strategic command with the distinct mission to lead the transformation of military structures, forces, capabilities and doctrines. The mission must enable NATO to meet its level of ambition and core missions and to address these new challenges. Particular areas of interest include: cyber defense, missile defense, artificial intelligence, autonomous systems and other disruptive technologies. The discussion will be hosted by Hudson Senior Fellow and former Assistant Secretary General for Emerging Security Challenges, Ambassador Sorin Ducaru.



Good afternoon, ladies and gentlemen. I would invite you to participate in the premiere (ph), because we are aware that we should be present in Facebook and social media, and I anticipated that the majority of you have -- don't have any clue what ACT is doing. So I prepared a short script -- a short video clip, and I would kindly ask you to play.


"The world is at the threshold of a new era. The success of military operations will be decided by human-machine teaming, powered or augmented by artificial intelligence. Human-artificial intelligence teaming will be a key driver for the use of artificial intelligence in the military.

"Human augmentation, underpinned by artificial intelligence, will be the extension of centuries of human endeavor in which people sought to become faster, stronger and smarter through the use of tools and machines.

"To get this right, effective human-machine teaming for decision making requires a strong understanding of how good teams operate. Innovative research, experimentation and planning is critical to charting the course ahead.

"NATO must employ human-artificial intelligence teaming efficiently and ethically. For that, NATO must achieve an effective convergence of technology, operating concepts, and adapt its organization and processes. NATO's Allied Command Transformation is leading that charge."


NIELSON: So thank you very much. You see the way ahead is prepared, but we are out (ph) moving on the solutions.

Ladies and gentlemen, I feel very much honored and privileged for having the opportunity to address the topic of NATO's military transformation agenda in an age of emerging and disruptive technologies, here at the famous Hudson Institute today.

The institute was founded already in 1961. The aim and intention was, and still is, to challenge conventional thinking and helping manage strategic transitions to the future through interdisciplinary studies in defense, national relations, economics, health care, technology, culture, and law. So, a perfect partner for ACT. And, even 57 years later, Hudson stands for excellency and as a role model for many other think tanks.

Thank you very much, Ambassador Ducaru, for your kind words of introduction, and for giving me the audience to explain some of our most pressing challenges and to share with you, ladies and gentlemen, Allied Command Transformation's thoughts.

To clarify for you ACT's role, which may -- might be confusing, especially with the term "transformation" in our name, ACT is based in Norfolk, Virginia, which is NATO's home in America and its only footprint on this continent. Approximately 500 people are working in Norfolk. Twenty-nine nations are represented -- NATO nations, plus approximately 10 partner nations. And we have some subordinate commands in Europe.

And, as the ambassador said, the last American commander, Allied Command Transformation, was your current Secretary of Defense Mattis. We are the strategic command for NATO, and we are responsible for warfare development activities for our alliance.

Ladies and gentlemen, it's an incredibly exciting place to serve now, as our focus is to identify and analyze future trends, thoughts on what to expect from the time ahead for the military environment, and to establish the bridge to our variety of challenges in order to increase the effectiveness and relevancy of our current and future capabilities.

Essential forward thinking ensures that we are relevant today and especially tomorrow. Of course, forward thinking is not unique to just NATO. Nations, other international organizations, think tanks and academia spend a tremendous amount of time and resources in developing and utilizing their strategic foresight to remain relevant. I am deeply convinced that we all share basically the same understanding.

Today's and the future's security environment is filled with ambiguity, complexity, surprise and shocks, and perhaps unpredictability seems to be the new normal.

Allied Command Transformation most (ph) -- most important outputs are the Strategic Foresight Analysis or, in short, SFA. The SFA isn't an attempt to predict the future, but instead depict political, social, technological, economic and environmental trends and highlight their implication for the alliance up to 30 years ahead.

Based on the trend analysis, our Framework for Future Alliance Operations or, in short, FFAO, identifies key attributes driving our effects to keep our edge over a potential adversary or change in security environment.

Key attributes are flexibility, interoperability, and, of course, speed and innovation. In short, we indicate what forces might need to be and to do for 10 to 15 years ahead. And this contributes, essentially, to our NATO Defense Planning Process or, in short, NDPP.

It's a four-year cycle, which is the primary process to facilitate the identification, development and delivery of NATO's present and future capability requirements. And, just to clarify, in the past, when you talked about capabilities, we mainly meant weapons -- ships, airplanes, tanks. And that's changing. The NDPP is the principal vehicle for the harmonization of capability development efforts undertaken by allies individually, multi-nationally or collectively.

Ladies and gentlemen, the mentioned key attributes -- flexibility, interoperability and pace in innovation -- are easy to postulate, but difficult to bring to life. They require detailed understanding and a concerted effort, enabled with the right adaptive policy, lending guidance and decision-making speed. And we are all aware we can't work on the future without being connected with many others. And we, as military, have to recognize that we will not always sit in the driver's seat.

Ladies and gentlemen, we have already established a common understanding of the importance of disruptive technologies such as artificial intelligence, autonomy or quantum computing. We share the understanding of the urgency for our alliance to adapt and the speed needed to act in order to take advantage of the opportunities and meet the challenges alike.

Our insight in this regard is pretty simple. We have to operate and to adapt at the same time. Since NATO's inception in 1949, technological lead (ph) has been an essential enabler of our military superiority. However, factors such as the increase in defense spending, the availability, the proliferation of knowledge and technologies have provided rivals and potential adversaries with growing capabilities.

They have the ability to challenge the alliance politically, militarily, technologically, and they don't hesitate to do so. A substantial part of the rapid modernization of potential competitors' military capabilities is supported by access to and use of emerging and disruptive technology. A number of state and non-state actors are developing these new capabilities.

At (ph) the NATO Warsaw Summit in 2016, nations agreed to identify advanced and emerging technologies, to evaluate their applicability in the military domain, and to implement them through innovative solutions.

Indeed, exploiting emerging and disruptive technologies will allow us to develop game-changing, disruptive capabilities in order to provide NATO the ability to counter potential adversaries as the alliance continues to deter, defend and guarantee peace.

Therefore, at the upcoming July 2018 summit in Brussels, NATO leaders will discuss modernization efforts, to (ph) include steps we are taking and probably roadmap to guide our future work. Ladies and gentlemen, let me elaborate a few examples without going into the technical details.

First, artificial intelligence and human-machine teaming. Artificial intelligence refers to the already-existing ability of machines to match humans in terms of learning, reasoning, planning and acting in complex cyber-physical environments.

The potential impact includes replacement of human decision-makers with autonomous robots or vehicle control, automated information fusion, and more. This means intelligent machines are able to assist and augment NATO staffs as they plan and conduct operations, trains -- operations, train, exercise and, by that, prepare for the future.

Artificial intelligence can generate opportunities to automatically take advantage of vulnerabilities they discover. This is especially true in the cyber arena and, with the use of quantum computing, put at risk passwords, enable greater use of image processing and, as we are already experiencing in our societies, increasingly complex autonomous generation of false multimedia information.

This will drive NATO to require new processes, new skills and new policies. Without any doubt, it will require political willingness and new legal frameworks in order to fully exploit the potential of the new technologies. NATO has to leave its comfort zones and to increase pace at all levels.

Second, autonomy. Autonomy is becoming much more relevant in modern warfare and is, therefore, of particular importance to NATO. ACT's and, therefore, NATO's autonomy program is a coherent and structured approach initiated in 2017, which encompasses both existing activities and future projects.

Its purpose is to identify opportunities and risks, facilitate awareness within NATO of national capability development efforts, and ensure interoperability standards. The program focuses, as well, on the education and training of our NATO command structure personnel, and on the legal and ethical implications of autonomy, especially in the military environment.

Within this program, a very close collaboration with industry and academia to leverage their expertise, experience and development steps in autonomy is a must and not an option. ACT's mindset is to be a bridge to connect operational experience, knowledge and resources between NATO, industry, academia and others. And we have some practical examples, going well beyond the known (ph), such as flying drones.

In 2016 already, three autonomous machines displayed autonomy as a maritime surface robot. They talked to an underwater robot and ordered it to launch a flying robot, based on preplanned routes, but updated through real-time data gathered in the situation. Moreover, all of this happened via mobile communication and sensor robotic packages.

Ladies and gentlemen, maybe some of you have seen the low-cost swarming technology where 30 mini-drones were launched from a tube in less than a minute, created a swarm, able to self-reconfigure and to overwhelm an adversary autonomously. These kinds of capabilities will change our approach to warfare. We must start now to consider both the opportunities, but also the challenges, should an adversary choose to use them against us.

My third area is cyberspace as a domain of operations. Already, at the Warsaw Summit in 2014, the heads of state and government agreed that cyber-defense is a part of NATO's core task of collective defense. At the Warsaw Summit in 2016, they pledged to enhance their cyber-defense of their national networks and infrastructures and recognized cyberspace as a domain for military operations, alongside air, land and sea and, maybe in the future, even space.

However, cyberspace differs from all the other domains as constantly evolving man-made construct. Unlike all other domains, NATO, as an international organization, owns, operates and protects its own portion of cyberspace, the so-called NATO enterprise.

Additionally, with a relatively low barrier of -- to entry, malicious actors can attain the skills and resources required to persistently engage in disruptive cyberspace activities. And they do.

Their ability to remotely manipulate and/or disrupt activities through cyberspace increases their opportunities to rapidly generate effects by complicating attribution.

Therefore, recognizing cyberspace as a domain of military operations provides us the opportunity to improve NATO's ability to conduct operations across all domains and maintain our freedom of action and decision in all circumstances.

NATO has already taken steps to operationalize these domains, starting with identifying the NATO cyber system gaps, which are being addressed in the NATO command structure financial (ph) adaptation process. We will establish a cyber operations center in order to enhance command and control of our operations and through cyberspace.

This endeavor is far away from being over. In fact, I have to admit that we are at the beginning. We will have to take a look at cyber doctrine, have education, training, exercises and evaluation, as well as at the political level, and especially within the leader (ph) frameworks.

We can already report some success stories, as now all NATO allies have established cyber policy frameworks and some type of organization to coordinate cyber-defense and cyber-security at the national levels. And most of the allies have even incident response capabilities.

Please allow me, at this point, perhaps one personal remark. The wording "cyber-defense" and "cyber-offense" is misleading. You should much more focus in cyber-security and intelligence. Reaching an effective level of protection against cyber-attacks, you inherently need to know what the adversaries are capable of.

A first, but not my last point is quantum computing. This affects all of the so-far-mentioned capabilities. Thanks to quantum computing, computers are about to become unbelievably powerful and will challenge all of our knowledge acquired so far.

Quantum computers, no longer relying on transistors and binary signals, but on microwaves -- quantum particles will be fast, very fast, the fastest you can imagine. One prototype proved to be 1 million times faster than its normal counterparts.

Those computers will be able to simulate previously impossible large chemical reactions, leading to new materials, and they will enable disruption-proof mitigation (ph) technology.

And not only with (ph) quantum computing -- enable us to process huge amounts of data, but it will also enable artificial intelligence to process data more effectively, such as analyzing complex sets of variables to find the best military course of action being in the realm of feasibility.

Quantum computers will also have a large impact on cybersecurity. Current cryptographic methods focus on using complex math to scramble data into unintelligible content with a vulnerable -- will be vulnerable to their activities -- abilities. Quantum computers will be able to rapidly decrypt this content, making current cryptographic methods trivial to break.

Overall, the first country to successfully commercialize quantum technologies will gain a huge first-adopter advantage, both the devices and in all of the discoveries the technology will unlock.

Ladies and gentlemen, the aforementioned examples all have two things in common. They will affect the civilian world much more than the military one, and they all are based on big data and situational awareness. Therefore, enhancing strategic awareness has rightly been identified as the single most pressing issue for NATO as a whole.

NATO needs to better understand information areas of interest to read (ph) -- to avoid being surprised. And, as the military is not the key player here, we will need to expand our knowledge-gathering beyond traditional areas, much more into the civilian environment. It's a kind of open-source intelligence, if you like.

We need to go beyond our conventional means to be up to speed with the congruence of trends and possibly increase predictability of future shocks. The Amazons, Googles or Apples of today routinely connect our geo-locations, where we like to work, eat, shop, work out or spend our leisure time.

With our topics of interest and our spending routines and (ph) a complex analysis, they utilize the mentioned big data using artificial intelligence and autonomy to recreate, discover you (ph) and to shape our consumer behavior. So what makes us believe that this kind of capability in the hands of malicious players would not be used to target NATO?

On the opposite side, an opportunity exists for NATO to utilize this same capability to provide analysis (ph) of security environment, build situational awareness and speed decision-making. The question is, are we recognizing the wind of change, and are we willing to act?

The shown (ph) examples of today's technology and capabilities. Imagine where we will be, 10 years ahead. We have to leave our comfort zones. We need to take decision now, not tomorrow.

NATO needs to follow the civilian, mainly non-defense, industry-driven technology innovation rigorously and bridge today with tomorrow. Otherwise, I fear we may be dominant and irrelevant at the same time.

Ladies and gentlemen, it all starts with NATO bodies and allies, persistently (ph) federated with nations, partners, commands, industry and academia to share our understanding and leverage the power of our innovation ecosystem. For me, the main questions are, are we willing to share? And do we really trust each other or not?

In practical terms, we at ACT have just released a detailed proposal to develop an emerging and disruptive technology roadmap in order to deliver rapid, tangible demonstrations that will help shape, accelerate and set the conditions for the use of disruptive technologies within NATO.

Our focus initially is on enhancing our situational awareness by leveraging all data sources -- that means open-source and traditional intelligence -- to aid in decision-making, enhancing our readiness by first seeing ourselves in a greater detail to provide executable options for SACEUR, our sister command in Europe (ph), which is responsible for current (ph) operation.

And, finally, capability development efforts in critical shortfall areas, driven by the NATO Defense Planning Process -- we know that future requirements are already at NATO's and its members' doorsteps. But the time to transform our capabilities is running out, and we have to speed up at all levels.

I am deeply convinced that NATO's success will be based on enabling our policy exchanges, which leads to adopting these kinds of capabilities quickly. This will ensure we can deter, defend and project stability now and in the future. That is what NATO as an organization and its member nations owe to their soldiers, airmen, sailors, Marines and societies.

Thank you very much for your attention.


DUCARU: Well, thank you. Thank you very much indeed, Admiral, for this very in-depth and, frankly, thought-provoking presentation.

You touched upon a lot of aspects of -- actually, going beyond just the issues of military transformation, but the link with policy, with ethics, with the legal aspect. So, yes, I will -- I found it extremely useful and timely and interesting.

And let me start with a -- with a question which is frankly linked with this kind of philosophical approach that you put forward towards the end of the presentation.

You highlighted the fact that the -- there is a need to have a better interaction between military and civilians because a lot of the threats that might develop from disruptive technologies could be actually thrown at civilian population, and (ph) it wouldn't be just a force-on-force approach. And we are already in a hybrid paradigm for so many reasons.

So my first question is the following: Do you think that the -- there is enough -- there are enough resources invested into the kind of thinking and planning, military thinking and planning, beyond the capabilities in physical domains, which -- we don't know how it's done, and it's continuingly (ph) thorough?

So are we what I would call overcoming this kind of analog hangover -- that means focusing on the physical world and, physically, neighbors and shifting towards the virtual world and the -- addressing the new technologies? And, if it's not enough, what prevents us, and what more should we do in this -- in this sense?

NIELSON: Thank you very much for this question. For me, it's first of all much more important to change the mindset in all parts of our society. And, for me, it's much more important to share what is already existing and what is the way ahead. And then we should think about resources.

Of course, as a military, I would always say I need more resources. Otherwise, I would be the wrong person in my job. But, never -- but, nevertheless, I think we have to think different. And that's my biggest concern at the moment -- that we are much more focused in the past and too -- and spend too less (ph) into the future.

Because it was comfortable to have the good old times of the Cold War. We -- we -- all of us were aware -- were aware what is the line of attack, what is the line of attack -- defense. But now we are talking about a 360-degree view, and targets may be different.

Lack of water may be a challenge. Lack of health care in the African continent may be a target. And I think, only in the military environment, we will not get the solution, because I'm deeply convinced everything is connected with everything.

DUCARU: Well, thank you. Thank you for that.

Now, you know, in the past, I would say breakthroughs in military technology was very much driven and sponsored by governments. We see that, now, it's the private sector that's driving the technological breakthrough. And, frankly, governments, the military are following it.

So what -- how does ACT address this link with the private sector, within industry? Is there any specific partnership that you're developing with industry, like, to (ph) stimulate access to innovation, innovation hubs and so on? What are the policies and the mechanism that you're using to do -- to be connected with the breakthrough technologies?

NIELSON: First of all, I think we spend a lot of time to open our doors, because you are completely right. In the past, the doors were open for the classical defense industry.

DUCARU: Right.

NIELSON: And I totally agree. In the past, military development -- a progress in technology was adapted, then, in the civilian environment. And this completely changed. The Googles, the Amazons and other organizations are the trendsetters for the future. And we are not used to cooperate and to work together. And the other way around.

So, we are used, in the past, to deal with the classical defense industry in Europe and in the United States, but, in between, I think we have to realize that developments in the civilian environment will have much more impact in the military environment than the past. And so I would -- it's a strong approach, but I strongly believe it changed completely.

DUCARU: Thank you for that. Also linked to being efficient and effective with interacting with industry, I'm trying to raise, now, the issue of the procurement process and acquisition processes within NATO that used to be long cycles. And, of course, they were linked to the major physical platforms, be they Navy, airframes and so on.

So is there any work in terms of making the process faster, especially for I.T. procurement? Otherwise, we would be condemned to having always the technologies of the past.

NIELSON: Yes. We are stressing this point on all occasions. I think everybody in civilian lives can see how quick I.T. is changing. And I would say, every year, it is making a lot of progress. And that's not in line with our decision-making process at (ph) the military environment, and even we depend on political decisions.

And I think we have even to think about how to manage, and I don't have the final solution to operate with the current procurement, with the current possibilities and to adapt at the same time.

So, in the past -- let me stress, perhaps, a Navy example -- we ordered new ships, we got them 20 years later, and then we realized, OK, the world has changed and the procurement does not fit to the current situation.

And to find a solution, which is really complicated, because budget guys are involved and national interests are involved -- to find a solution which prevents us from making these mistakes and to become better -- that's the challenge, and military alone can't solve this problem.

But it's -- and, when we are talking about the 360-degree view, this should not only be a military view. The whole society and nation should have a share of this view.

Let me stress, for instance, the Arctic. What will happen in the Arctic? The ice will melt, and then there is a strong interest in that area. Are we prepared for this situation?

Or were we prepared for the development of the refugee crisis in the African continent? Of course. We had some indicators, but we didn't -- they (ph) -- or we couldn't decide earlier, and now we have to fix the problems.

DUCARU: Let me refer to the process of training, education exercises, where Atlantic Command Transformation has a lead and develops multi-year programs. How much is the focus that you emphasized on the new developments, the emerging changes (ph) -- how much has this changed your -- the curricula for training or these exercise scenarios? Can you give us some examples of how this has evolved?

NIELSON: Yes. So we own -- NATO owns the NATO School Oberammergau. And, in the past, we offered, you know, traditional military training. That's not necessary.

When we are talking about human-machine interaction, we have to train our people how to manage this. We have to train people about artificial intelligence and what kind of impact this may have.

We changed our training programs. It's not -- no longer people go to Oberammergau for two, three, four weeks, get some training. We make long-distance training and all these things. But there's a long way to go.

DUCARU: And now let me come to one of my favorite subjects, which is cyber-defense. You said that you have a personal opinion that this distinction between cyber-defense, offense is a bit artificial, and I suppose that, when we speak of defense, like in all the other domains, you do it with all means available, not just (ph) with resilience and so on.

So how do you think that the creation of this cyber operations center in the -- as a new element of the NATO command structure that was just endorsed by defense ministers -- and I think it will be, also, finally approved by the leaders of the (inaudible) intergovernmental summit (ph) -- how would this affect NATO's approach in terms of cyber-defense in a broad sense, without actually this distinction that you just now mentioned, to be a (inaudible)?

NIELSON: Yes, of course. But I think we agree that cyber will have impact on all parts of the military, but not only on the -- on the military. It's a domain which is across air, land and sea. And we -- we strongly believe what kind of incident, what kind of impact cyber may have in operations, but not only in operations.

Look at the incidents which happened in the -- in U.K., I think, when they closed the hospitals because they couldn't use their I.T. equipment. So, this is a kind of soft kill (ph), I would say.

So, in general, it's a combination. NATO itself and the military environment should take care about cyber, which is important. And we didn't implement a new cyber command. Why? Because we know exactly that the experts in cyber are limited in all nations.

And so we try to -- we try to mention (ph) a new approach, that we align the existing capabilities in the nations with NATO, and not building, first of all, a huge -- a huge organization and then asking the question, "For what purpose?"

DUCARU: Thank you for that.

Let me, now, open the floor for questions. And we'll have somebody (ph) in the first row -- colleagues will offer mics, and please introduce yourself and then formulate (ph) the questions.

QUESTION: Sure. Excellent presentation. George Nicholson, a Washington liaison to the Global Special Operations Forces Foundation.

Last week, we had a major symposium here in Washington, and it was the E.U. Security and Defense Washington Symposium, 2018. Numerous defense ministers from Europe -- we had the director of plans and policy from African Command and Senator Joni Ernst from the Senate Armed Services Committee, who is chairman of the -- Emergency Threats and Capabilities.

One of the issues that kept being brought up, particularly by the defense minister, was, "What's the balance between NATO's requirements and the European Union defense requirements?" And it was alluded to that the European Union seems to think that we need to also focus on the necessity of maintaining the industrial base in European countries.

And they used as an example, when we had the replacement for the KC-X tanker, the original source was going to be the Airbus 330. And then, because of political pressures, they were eliminated and we went with the 767. So, again, your comments on that.

The other last thing is Senator Ernst talked about her objectives for the NATO conference coming up. I was wondering -- you alluded to parts of it -- is, we've got to look at artificial intelligence, mechanical learning and hypersonics.

And then she also said we've got a real problem with some of the NATO partners, like Turkey -- and I don't know whether you can talk to this -- getting the F-35, but also getting the Russian state-of-the-art air defense system.

And there is markup language in our current defense authorization act to go ahead and refuse to give Turkey the F-35 because, are they going to be a reliable partner?

NIELSON: Please accept that I am not a politician, so I can (ph) give you the answer, because it's a political decision if Turkey will get the F-35 or not.

But, coming back to your introduction about E.U.-NATO cooperation, that concerns us a lot, because, finally, looking at the military environment, we have a single set of forces. And, so far, the use of military power is completely independent from E.U., NATO, or whatever. That's -- politically, is decided. But we should avoid duplications. And that's our problem.

And, of course, you are aware about the ongoing discussion in Germany, in Europe, about work flow, work share in building ships, airplanes and so on. And, of course, it's challenging. But, nevertheless, we have to think about how to align, for instance, our defense planning process with the corresponding E.U. process, CDP.

And, believe it or not, sometimes it's only a question of classification, if we can exchange the existing papers. Maybe you may laugh about this, but that's the truth. We have to investigate a deep dive, and I think the rest of the world (ph) agree, in our processes and procedures.

And, finally, we are, at the end, talking about the question of trust. In an era of big data, it doesn't make sense to separate the E.U. from NATO procurement for alignment, and so on.

DUCARU: Thank you. There's another question, whoever gets (ph) the floor.

QUESTION: My name is Chris Radcliffe (ph). I'm an intern with EII DeBlass (ph).

So, when you were going over the 2018 NATO Summit, you mentioned, during your first point about A.I. and human teaming, that A.I. may, in some cases, take human decision-making out of the picture completely.

Could you comment a bit more on that, and maybe, as you're commenting on that, give a description as to how NATO plans to prevent A.I. from making decisions that humans particularly wouldn't want them to make, if their decision-making was taken out completely?

NIELSON: So I think I'm the wrong person to answer your question, because I'm not a -- familiar with the -- with the technical details. But the -- of course, we have to offer solutions, because I explained in my -- in my speech that there are sometimes concerns and fears that this new technology will operate without any observation by human beings.

Of course, we have to implement tools, plans (ph), since we have to discuss in advance what kind of ethical questions or -- will be affected. But we are on the journey already. So I can't offer you solutions, but we are aware about your concerns and what you have mentioned.

DUCARU: There's another question here and two others to follow.

QUESTION: Thank you. I'm Zipora Fried (ph). I'm the -- a senior adviser to the French Vice Chairman of the Joint Staff. Thank you very much for your presentation. You outlined the key points of innovation, which is quite fashionable today, but it's also a deep (ph) process.

And you mentioned the difficulty to integrate innovation into the long-term process of building capacities, which is our key problem. So how do we solve the question of agility and not only staying on the "wish-we-could-do -- could-make-it"?

NIELSON: Yes. So, our intention is -- once again, I can only share my views and explain the necessity. So, when I'm talking about the NATO Defense Planning Process, that means the short term. When you are investigating in this NDPP, you will not -- find no word about artificial intelligence and other things.

Our impetus and our intention is (ph) to integrate this in the next cycle, and the next cycle will start in autumn. And we are already in discussions with the nations. Of course, some of them have completely different views.

But we have to find a solution, because waiting for another two, three, four years would be a big mistake, because my understanding is the technology is already available. And many of us are embracing this technology in civilian life. So, why not to implement this in the military environment?

And, finally, that's -- we can only touch (ph) this point. We can mention it. We can try to convince the nations. But you are aware 29 nations have to agree, and that's a challenge. Yes, but -- in our analysis, it's completely on track with what you expect.

DUCARU: Thank you.

There was one question in the back, and then a series of questions here on the right. On the right (inaudible). Two (inaudible).

(UNKNOWN): Yes, but...

DUCARU: (inaudible).

QUESTION: Sir, thank you very much. First of all, I wanted to follow up on the artificial intelligence question a little bit.

Our previous deputy secretary of defense, Bob Work, has stated artificial intelligence might change not just the character of war, but also its nature. Do you see this as potentially being the case? And, if so, I mean, what are the -- what are these foundational changes that we're seeing with this introduction?

NIELSON: So I totally agree -- what Bob Work said. And I think the United States took much earlier care about the possibilities about artificial intelligence than nations in Europe. And they made, already, changes here in the U.S.

I realize that, already, all services in the United States are convinced that they have to invest into the -- into artificial intelligence. And I read a couple of weeks ago in a report that all services will spend at least a -- some million already this year.

So they are aware and -- but even, I believe, in the United States, you don't have the final solution, but you accept and you understood that we have to deal with this.

And though -- and, so far, yes, artificial intelligence -- when I talked about human-machine interaction, that is, for instance, a difference to the past. When you think about airplanes, manned airplanes for observation in some areas -- in future, it may be that we will have remote-controlled airplanes in these areas.

And then we have to think about ethical questions. Who is controlling these airplanes? All these things. And that will change, from my perspective, the military environment very, very much.

QUESTION: Thank you.

NIELSON: But, once again, we are good in analyzing these topics, but we are on a journey, and we have to make our experience and our experts aware about these topics.

DUCARU: Thank you. Please.

QUESTION: Thank you very much. Gale Petrusso (ph), IDA.

With a lot of these short-term initiatives, there are some concrete metrics that you can sort of measure them by. I'm thinking about readiness, burden-sharing. As you look at transformation, what are the benchmarks? What are sort of the metrics and measurables that you look for?

NIELSON: Benchmarks -- that's a challenge in the military environment, because we didn't have these benchmarks. It's a question which is -- is in the economical environment.

I -- at the moment, to be very frank, we are not thinking about benchmarks. But I will take it with me. Perhaps it may be a possibility to get -- to be better in the future.

QUESTION: Thank you.

DUCARU: I may add to this, from the cyber experience, because the -- you know, the beauty with NATO is that, when it it addresses a domain, it does it thoroughly, and it has a process called the Defense Planning Process.

So, when NATO decided to include cyber capability targets in Defense Planning Process, then we have made them (ph), and so on. But they took some time. And that's why we're not yet ready to address issues beyond that, like artificial intelligence and so on. You're right.

There were two questions here -- two requests for the floor, here in the front.

QUESTION: Thank you for coming. My name is John Mann (ph).

My question is about -- you made a very good point earlier about how war has become very multi-dimensional, 360 degrees. It's no longer the simple conventional lines of attack.

But I think it's also important to remember that newer types of warfare haven't replaced conventional warfare. They haven't completely done away with the traditional battlefield. But they are simply an addition.

So my question is, what is your opinion on how NATO can best integrate these newer, transformational technologies with conventional military doctrine in order to optimize all of the different, limited resources that you have?

NIELSON: Yes, of course. I think it's obvious that artificial intelligence will be part of tanks, ships -- future tanks, ships and airplanes, without doubt. And in -- so far, I am -- I believe that a -- we need kinetics like tanks, ships, aircraft, even in the future, because I can't see, when we cooperate much more with the non-defense industry, that kinetics will be outsourced or delivered to non-military people.

But the question is what kind of additional added value these new technologies offer. Look at the micro-drones and the small drones, what kind of knowledge, what kind of expertise, what kind of possibilities implement (ph) -- and they are becoming cheaper and cheaper. The new drones have a kind of capacity and a possibility (ph) -- (inaudible) possibilities which we should use in the military environment.

And, once again, I'm not quite sure -- once again, we are starting this process. We are convincing nations that it's necessary to think about the new technologies, to adapt the new technologies in the military environment. And, to be very frank, at the moment, I observe the huge gap between civilian use of intelligent -- artificial intelligence and military use.

And our challenge will be that this gap is not becoming bigger and bigger. We have to -- at least to stop it and perhaps to close it a little bit. And that's our intention. But we need support, because the expertise in the military environment about the possibilities is limited.

DUCARU: OK. We'll -- please.

QUESTION: Yes, thank you, Admiral Nielson. My name is Mike Iroshas (ph).

A lot of the transformation that you talked about with NATO is heavily dependent on receiving the necessary funding. Are you optimistic that NATO will have the funding to be able to achieve the goals of transformation that you talked about? And what pressure is being put on those nations that are not meeting their goal of the 2 percent GDP?

NIELSON: Of course, to be very frank, it's finally a political decision. If politicians believe that we have to invest more in defense spending, we will make the money available. That's my understanding.

But I'm -- on the other hand, I would initiate, even, a discussion. When we are talking about funding, we should not only think about money, but we should even think about manning. And that's concern that I'm looking forward into the future -- that the money will be available on political decision.

For instance, in my country -- because I realize, of course, that I will get the question -- we spend, at the moment, 30 billion in solving the refugee crisis. And this money was not in the budget.

But my concern is the European countries, and not only the European countries, are in a position to get enough people. And that's even a challenge in the United States. You are looking for 1,500 pilots, and you can't get it, although you are spending a lot of money.

In my country, we are facing a demographic impact which is tremendous. In my birth year, 1.3 million boys and girls were born. My son is 30 years younger than I, and, in his birth year and all upcoming (ph) other years, only 700,000 people were born.

And that means we are, especially in Germany, a society which is becoming older and older. And, 20 years ahead, we will not have 80 -- 1 million citizens, like today, but perhaps only 65 (ph). And that's my response.

Of course, once again, we -- NATO, as institution -- we depend on the critical decisions to spend money and manpower. And we can only ask for -- we can explain why it is necessary. But, finally, the decisions are made by politicians, and I like this kind of burden sharing.

DUCARU: Thank you. There was another question here from -- (inaudible).

QUESTION: Yes, sir. Major Hildebrand (ph) from the Transregional Threat Coordination Cell at the Pentagon.

How much buy-in are you getting from private sector and academia into cooperating with new innovations and things like that? Are they -- do you have any success stories or anything that you could give us?

NIELSON: No. Unfortunately not. We try, as I said already, to open the doors, to come in contact. And, for me, it's really impressive when we get invitations for you -- from universities, think tanks, that -- they say, "OK. We are not aware that NATO is dealing with these -- with these topics," because, in the past, we were not connected with these companies, with these people.

Many people in the universities -- I'm talking in Europe -- didn't have any personal military experience. So that -- we have to tear down the walls. And we, as military, have to express that we accept the leadership, in some areas, by others, and not always we are sitting in the driver's chair, which is a challenge for many military people.

But my observation is, the doors are open. But it will take time. And that's why we are always on a promotion tour, not only in NATO. And, believe it or not, in all civilian companies, nobody will fight against the development directorate. In NATO, we have to explain why NATO needs such a -- such a tool.

DUCARU: Please.

QUESTION: Hi. Carl Gallopin (ph), Domain Reference (ph) and (ph).

And, sir, thank you for being here. And I do have a more general question about NATO that's perhaps a little politically incorrect. There's a book by Dr. Paul L. Williams titled Operation Gladio, referring to, apparently, a NATO operation throughout Europe during the Cold War. And it attributes many instances of terrorism in Europe having been perpetrated by NATO assets in ways that would cause the Communists to appear to blame, when in fact they were not.

And my question's just, within NATO, are you familiar with whether something like Operation Gladio actually existed and whether, you know, those allegations that seem to be well-documented, are true?

NIELSON: To be very frank, not to my knowledge. Ambassador, I don't know, even in...

DUCARU: (Inaudible.)


NIELSON: Yes. Not to my knowledge.

DUCARU: Please.

QUESTION: I'm Peter Humphrey. I'm an intelligence analyst and a former diplomat. This was an amazing tour of the horizon. Thank you very much.

Personally, I think it's wonderful when NATO allies get to buy top-of-the-line Russian systems. I can't think of a greater gift. And so I'm puzzled as to our reaction to that.

I wanted to ask about some future horizons in another way. You know, we do a better job coming up with the supernational I&W enhancements. Can we do a better job creating or expanding think tank capacity at NATO? I think that's a huge hole.

And do you see any possible members? I'd love to see Malta and Cyprus join NATO because of the maritime capacity of those two places. Have we ever pitched those two places?

NIELSON: So we can always be better, to be -- to be very frank. And I think, especially in those areas in which NATO or the military is not familiar, we need and we depend on cooperation and discussion with different institutions, as you (ph) said.

One of our main products, we publish every two years. It's named, as I said, the Strategic Foresight Analysis. And this is not an approach or attempt to predict what the future is -- to come together with think tanks, with academia, with non-state actors, in order to identify what is the way ahead.

So nobody alone is in the position to solve these problems. We have to discuss it. We have to put, as I said, the pieces of a puzzle a little bit together so that we have an idea about the possible picture in the future. We are -- we are the -- initiating participation. We invite think tanks and so on. But, once again, it's a long...

(UNKNOWN): (Inaudible.)

NIELSON: Pardon? A NATO think tank -- we don't have these think tanks, yeah? When we thought about the future in the past, it was replacement of tanks, for example (ph), that -- airplanes, as I said.

I'm not quite sure if it's -- if it's the best solution to build up a think tank, a huge think tank, or it's -- the better approach like you do with the cyber institute in Europe -- that we bring these guys together and try to best -- to find a common solution and the best approach ahead.

I'm not quite sure. So I don't know, but, really, if it's...

DUCARU: I'm one of the supporters of such an idea...


DUCARU: ... because you need some entity that drives the agenda forward without actually being linked to the kind of political correctness and so on. Somehow, it's happening through the centers of excellence...


DUCARU: ... On different domains. And NATO has an ecosystem of -- center of excellence that are owned by the sponsoring nations, are certified by Atlantic Command Transformation, and they are allowed (ph) to go beyond the existing policy within NATO. But they still are not like a single body. So, what the -- I was...

(UNKNOWN): Thank you.

DUCARU: ... I was a supporter of this -- of such an idea. The European Union has a number of think tanks of their own...


DUCARU: ... including one at the level of the president of the commission. And I think this could be bridging, a bit...


DUCARU: ... the gap in terms of what I call -- could call the knowledge gap from what's new on the technology market and so on, and what's to be...


DUCARU: ... level of political...


NIELSON: Thank you for mentioning this. And that will be part of the new reorganization of NATO. The ambassador is right. We own -- NATO owns no center of excellence. The nations own these centers of excellence. But perhaps one famous center of excellence is Cyber Center of Excellence in Tallinn, which does a tremendous work, of course.

But these centers are owned by nations; they -- that are not many people -- sometimes only 20 to 30. But they are not aligned. And that's our approach in the future -- that ACT will have more hands on these centers of excellence -- or on the centers of -- they should not be subordinate to command, because these centers of excellence are in a favorable position.

They are certified by NATO, but they can (ph) work, at the same time, for different organizations. It's no problem to work even for the E.U. If we will have a -- NATO centers of excellence under our command, it will raise some political concerns, like some of you mentioned already.

But, of course, it's a kind of capacity. But it's a -- in 24 centers of excellence in total, I think 1,000 people are working -- civilians as well as militaries. They are hosting conferences all over the year.

We use these Centers of Excellence, for instance, to solve problems of interoperability. They will be in the position, and in the future, if the heads of states agree to write doctrines. Doctrines -- that's, from my perspective, necessary on the one hand (ph) side.

But, if they write -- these centers of -- if these centers of excellence write the doctrines, we can use them for NATO and E.U. at the same time. And that makes a lot of sense, for instance.

But even they invite people from other organizations, from other areas, other background. But I think -- my understanding, centers of excellence -- a think tank -- I think that would be much -- too much flowers (ph)...

DUCARU: One of...

NIELSON: Again...


DUCARU: Yes. So that's why I'm a supporter of this idea.

I will take one last question in the back, and then we'll try to wrap it up.

QUESTION: Thank you very much for the -- asking the question. My name is Satoru Nagao. I belong to the Hudson Institute and my subject is U.S.-Japan-India security cooperation of NATO, fortunately (ph). But my question is related with this subject.

Currently, NATO start to cooperate with non-NATO countries. So is there the possibility that the -- NATO, Japan, India -- the technological cooperation? And, if it will happen, is it beneficial for NATO -- is my question.

NIELSON: Yes. We appreciate to work together with these countries. And we are already in contact with Japan, because we have a huge partnership program in NATO. For us, it's important to get information about areas which are not in our main focus.

And Australia and -- just to mention a few nations which we are interacting at the moment -- Japan, Australia, Jordan, Georgia, Finland, yeah -- and others across the world -- Colombia, for instance -- and it's for the benefit, I think, of all nations. We are -- we are -- we are listening to these nations, what their interests are and how to align us better than we did in the past.


DUCARU: Well, thank you. Thank you very much, indeed. This has been a tremendously interesting and dynamic dialogue. Thank you for the interest.

Let me also thank colleagues from the Hudson Institute who made this event possible -- Jean (ph), and then also our colleagues from the -- for the interns with Hudson.

Admiral, I hope this is not to be -- this is just the first time, but not the only time that you are coming at Hudson. It was really an eye-opener discussion. And there's a lot going on in NATO, and at, again, an accelerated speed. So I hope to have the honor and the chance to host you again.

Once again, thanks for the generous presentation and for the insights. Very direct, very honest and straightforward and very open. With this, I would invite everyone to give a round of applause for our guest.

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