A Conversation With Penny Pritzker

Wednesday, November 16, 2016

U.S. Secretary of Commerce Penny Pritzker joins CFR President Richard N. Haass to discuss issues regarding online privacy. Pritzker discusses how technology can improve and pose threat to people’s lives, the Obama administration’s progress on improving online privacy, and the U.S.-European Union relationship.


Penny Pritzker, Secretary, U.S. Department of Commerce


Richard N. Haass, President, Council on Foreign Relations

HAASS: Well, good afternoon. Welcome—or welcome back—to this symposium here at the Council on Foreign Relations. The overall title is “Privacy and Data in the Age of Surveillance.”

I’m Richard Haass, and I’m lucky enough to be the president of the Council on Foreign Relations. But more important, we’re all lucky enough to have the individual we call 38, Penny Pritzker, who is the 38th U.S. secretary of commerce. She’s been in that position for, what, more than three years now, three and a half—basically the second term of Barack Obama’s presidency. And she has been—I think she has expanded and modernized and made more policy-relevant in lots of areas her department. And she deserves our thanks and more for doing that.

Before I ask her to take the podium, I just want to say one or two things about the subject of today. I’ve been here for a while. And a couple of years after I got to the Council on Foreign Relations, I made the decision—I think it’s one of—one of the good ones—that we needed to do more in this realm on cyber. I grew up in a different generation. The new technology that was shaking things up was nuclear. And I decided that we had to one way or another get our arms around this new technology and think about both its—not just its implications but as policymakers what it was we could and should do about it, to see that the positive implications and uses of it were allowed to—or encouraged to flower and the malign uses of it were discouraged or in some cases prevented.

So we went ahead here at the Council on Foreign Relations and made cyber-related issues a priority. And I think it’s an important one and it will continue to be an important one for us because it’s an area where the gap between the technology and the body of thought and literature is significant. It’s not a criticism; it’s simply an observation. And the reasons for it are many and several, but the technologies are profound. They’re developing fast. And the idea that thinkers would have to play catch-up should not surprise. Indeed, in many ways I think it’s a far more difficult challenge than the nuclear one was, given its nature. So we are hard at work at—on it.

The “we” is led by Adam Segal, who you’ve seen here today. But Adam’s got a lot of company: Craig Mundie, Stewart Patrick, Rob Knake, Karen Kornbluh, Matt Waxman, David Fidler. I would actually saw we have as large and as talented a contingent working on this set of issue as any other institution in this country. And what we are trying to do is push the intellectual content of the conversation, develop it and push it. And we’re also trying to convene government, industry, and people in the ideas business. And today’s symposium is simply one of many examples of it.

So in the spirit of convening and of bringing together government with people from the worlds of ideas and business, let me turn things over to the secretary of commerce. She’ll speak for a few minutes. She will not filibuster. She promised me. Then she and I will have a conversation. And then we’ll open it up to you, who are the real experts.

So, Penny, over to you.

PRITZKER: Richard, thank you for the warm welcome, and it’s great to be here at The Council. Thank you for inviting me.

You know, today’s discussion of privacy and security has never been more important. You know, in recent months we witnessed a denial-of-service attack that brought down Twitter and about 1,200 other websites by turning household objects into cyber weapons. And in fact, today we learned that that might have been brought about by an attacker who sought to take an offline gaming site down because he had a personal grudge. We’ve seen hacked emails drive the news cycle, and we’ve seen foreign influence in democratic processes.

These events suggest that we’ve arrived at a really important inflection point. Innovation and technology adoption are outpacing our ability to ensure privacy and security and undermining our ability to realize the digital economy’s full potential.

Today digitization is transforming every sector, from health care to energy to manufacturing. Companies now have powerful tools to analyze and apply data in ways that hold enormous progress for our world.

But let me—let me give you an example. So, last April, I was in Hamburg, Germany. I was there to look at the port. But while I was there, they showed me how they were on-boarding the refugees from Syria that were arriving. And the refugees speak 25 different languages. But they have a public health question as to how do we know what we’re—who—what these folks are bringing in in terms of public health.

And thanks to automated translation services, the German health caretakers were able to screen thousands of displaced families in real time. In fact, they converted a container into a health care center—literally, you know, like a container that you see on a ship—into a health care center. They plugged it into a computer. And because of that automation, Germany was able to protect their public health and move thousands of refugees through the process very quickly and very efficiently.

This is just one example and one of the countless ways that technology and big data can improve people’s lives. So think about also how it can help reduce road congestion or prevent traffic fatalities or advance precision medicine or prevent retail fraud. All of these great benefits are extraordinary and things we want to capitalize on. But one thing is really clear. We will not deliver on the promise of these innovations unless people can trust that their privacy and security is protected online.

You know, and we have this daily drumbeat of cyberthreats and data breaches that are headlining our news. You know, the National Telecommunications and Information Administration, which is part of the Department of Commerce, recently surveyed 41,000 Internet-connected households across the United States, and they found 45 percent of the respondents said that concerns over privacy have discouraged them from using certain online services. So these results drive home how violations of privacy and security have a chilling effect on the adoption of new technologies.

So the—throughout my time and our time as a team at the Department of Commerce, our teams really made these issues of trust and privacy top priorities. You know, when I look—when I took this job, President Obama asked me to build bridges with the private sector, but that was at a time when the relationships were frayed by a number of things, but particularly also by the Snowden disclosures. And those revelations spurred more than just debates about our civil liberties. They undermined the ability of our businesses, American—some of America’s most leading companies, to compete worldwide. And what happened is, nations began to erect digital walls. Data localization laws, content controls and owners’ technical standards have been used to threaten market access in many, many markets around the world. Some of those policies, albeit were well-intentioned; however, more often than not, they limited consumer choice and undermined competition and stifled innovation.

So, to address some of these challenges and to restore trust and maintain American leadership in innovation, our team developed our first-ever digital economy agenda. We have four priorities. First is promoting a free and open Internet. The second is to protect digital security and privacy. The third is to build and support the building of a workforce so it’s prepared for the 21st century. And the fourth is engaging with industry on emerging technologies. And trust is a key pillar to that agenda.

So our team’s made some significant strides—strides that are delivering real benefits to our economy. So take, for instance, our data privacy agreement with Europe, which I’m sure Justin talked about earlier. It used to be known as the Safe Harbor, but then it was struck down by the European courts, and that posed huge challenges to American companies who struggled to comply with the incompatibility of U.S. and EU privacy structures. So for two years our team negotiated with their counterparts in the European Commission, and this summer we successfully secured an agreement called the EU-U.S. Privacy Shield Framework. So it exists between European and U.S. legal constructs for privacy, creating certainty for companies and protecting privacy for consumers on both sides of the Atlantic.

Now, why was that important? It’s important because this framework is the bedrock for $290 billion of annual digital trade that goes on across the Atlantic. So these issues of privacy and security, they’re really complex, and we need to have businesses—businesses like yours—at the table to address them. And that’s why at the Department of Commerce we made close cooperation with industry as kind of a principle that guides us at every turn. So, for example, at the National Institute of Standards and Technology, we convened about 3,000 industry leaders and technical experts to create the cybersecurity framework, which is a dynamic tool that’s now widely viewed by industry and government to be the gold standard of how you measure cybersecurity risk. But it also provides the basic vocabulary that we all use to talk about where we are in managing cybersecurity risk.

And earlier this year, the president tasked the Commerce Department with providing support to the Commission on Enhancing National Cybersecurity, which is a commission made up of 12 public and private sector leaders. And the commission is due to deliver to the president a report on December 1st. Having seen early drafts of this, we really—this is a very important report. I encourage every one of you to get your hands on it as soon as it’s public. It’s meant to be a blueprint for the next administration to how to better secure our government, as well as our digital economy at large against cyberthreats.

You know, the administration has made significant progress on restoring trust, both here at home as well as abroad, by reforming surveillance rules and passing the USA Freedom Act, and I’m proud of our administration’s leadership on all of these fronts. Still, there is significant unfinished business as we deal with these threats—hence the reason we’re all together.

So, for example, we currently have a system of sector-specific privacy laws with broad enforcement authority for the FTC to police the privacy practices of companies and protect consumers, and recently the FCC entered the privacy enforcement space. As innovation moves faster than our ability to regulate or legislate, we have to consider whether we need new ways to protect privacy in a future headed towards artificial intelligence, machine learning, virtual reality, and other technologies that come from the sci-fi films of my youth.

Another difficult issue to address is encryption. We all know that encryption is essential for protecting data, for industry, for consumers, for government and for our military. And in fact, President Obama has said—and I quote—“There’s no scenario in which we don’t want really strong encryption.” However, we increasingly have digital services that impede law enforcement’s ability, with a warrant in hand, to do its job. And we have to continue to have a clear-eyed approach to this issue that fully appreciates the security-versus-security implications. In other words, we have to strive to ensure that any changes in our encryption policies don’t jeopardize our national security or undermine our ability to compete globally. So we have this national security need and this competitiveness issue and a law enforcement issue, and they’re all banging into each other right now, and it’s a real challenge. And I fundamentally believe and our department fundamentally believes that with collaboration with industry, it’s—we can address some of these challenges. But without collaboration, we really are not able to solve these problems.

So privacy and security are values that run deep among all Americans, and at the same time, we’re an innovative society that’s always embraced new technology. So digitization, automation, and data optimization, they have the potential to deliver huge benefits across the world to all of us. But how we empower our businesses and our communities and our people to realize the promise of this new digital age while protecting the privacy and security essential for their success is the central question of our time. And this question will confront the next administration on day one, and it will confront all of us for years to come.

So, thank you, and I look forward to the conversation.

HAASS: The live over here is not working, so we’re going to do it—

PRITZKER: OK, great, then I can sit wherever.

HAASS: Well, thank you.

PRITZKER: Thank you.

HAASS: Slight declaration of something: We have known each other for a long time and we’re friends, but I will still be very demanding in my questions.

PRITZKER: He always is.

HAASS: But I did wear my Department of Commerce-issue regulation socks in your honor—

PRITZKER: I love that.

HAASS: —in your honor today.

Let me start where you left off. Rumor has it there was an election, and we’re in the midst of a transition. In, what, nine or 10 weeks your successor will presumably take office. A new administration will take office. What essentially is the core of the transition memo from you to them? What do they need to be thinking about, you said, from day one? What—imagine three priorities that really they need to wrestle with.

PRITZKER: Well, let’s—in the digital world, let me start with, you know, obviously cybersecurity. And I think what they have to wrestle with is, you know, the fact that the challenge is dynamic. And that’s why it’s so hard. And our regulatory structures—and we’re not a regulator of this, and that’s why we’re—I think the department plays a really important role as it relates to cybersecurity, because we’re kind of a safe space to have conversation without going directly to your regulator, although I have called for the idea of a reverse Miranda when you go and meet with your regulator. You get to talk about challenges in this area and not have them held against you.

But I think the real challenge, and one of the biggest priorities, is how are we going to deal with this dynamic threat and the fact that government can’t do it alone? And the government can’t do it alone for a number of reasons. First of all, a significant portion of our critical infrastructure is in private hands, whether it’s our hospitals, it’s our electric grid, whether it’s some dams. It just is so much of our infrastructure is in private hands. So we have to work together.

And what we’ve learned is this interconnection that is created—it sounds stupid to say—by the internet—the idea that, for example, that the target, the pack of target, came—of 80 million personal files came from going through the HVAC subcontractor, you know, is crazy. But this is the problem, or the idea that the frustrated game player can bring down 1,200 websites is—or that a foreign government can put out information that was private and affect our elections is—that’s the world we’re living in.

And so it really requires that we collaborate with the private sector. But it also means that we have to—Congress needs to also create the ability to have collaboration outside of enforcement. And that’s going to require some laws to facilitate this collaboration.

And the third thing is we need to really focus on baking security into innovation. I say new—so think about the internet of things, the idea that, you know, the internet of things provides enormous benefits. We talk about—you know, think about reducing car fatalities or reducing or creating the ability to analyze big data. But we also need to make sure that these new items are born secure, so your camera can’t become a weapon and, you know, consumer products can’t become, you know, used for nefarious purposes. And so this is a real challenge.

And so we at the department—what I would say to the next secretary—and I have actually written, in addition to—you know, we have binders prepared, and we’re ready. We’re ready. Whenever the transition team shows up, we’re ready. We’ve been ready since, you know, before last—before the election. And, you know, the president had us commit to be—you know, we’re professional. While we have one president at a time, we have a job to help this transition go well.

But I wrote a letter also myself to the next secretary of all the things I wish someone had told me before I showed up. And I’m excited about that. But in the cyber realm, the department has a number of important roles to play. First is, you know, the cybersecurity framework. We created a framework. It’s framework 1.0. The framework needs to be evolved. It needs to be more applicable to small businesses. It needs to take into account what we’ve learned over the last two years since the framework was put out. So that’s one thing. And that’s done by NIST, which is part of the Department of Commerce.

The report that will come from the Cybersecurity Commission has significant role for the Department of Commerce in addressing the cybersecurity threats. And so that would be read that report and take seriously those recommendations. It’s a really—I’m excited about where they’re going. It’s been well done.

We also have the Cyber Center for Excellence, run by the—run by NIST, where we work with the private sector to address technology challenges for cybersecurity. So, for example, how do you keep a police car secure? How do you think of all the information and data that’s in a police car today? Think of the connectivity of a policeman or a policewoman. How do you make sure that your IV in a hospital, which is networked, doesn’t get hacked?

You know, hospitals are now completely designed to rely upon technology. And so how do you make sure that hospitals remain functional and not—don’t get—have a challenge because of intrusions or cyber threats?

So—and then the other thing that we’ve done is we created an advisory council on cybersecurity for the—you know, not just for us, but this goes on, so that the private sector has a vehicle to give input into the Department of Commerce and our various equities in this area; so lots for the next secretary to do in this area.

HAASS: Is there anything that could or should or needs to be done in the area of reorganizing the U.S. government? Is this in any way—

PRITZKER: (Laughs.)

HAASS: —an organizational issue in terms of central or distributed authorities? Or is this mainly a policy issue?

PRITZKER: It’s both. It’s absolutely both. And I gave a speech to the commission and—about this very issue, sort of from the perspective of you’re a secretary. What’s your responsibility, versus what are central things you could consider centralizing?

One of the biggest challenges we face as people, we don’t have the human capital to deal with cybersecurity in government. We need more folks from the private sector to spend some time and help us; you know, come in for a year or two. How about a cyber corps? We have AmeriCorps. We have the Peace Corps. How about a cyber corps? I think we need that kind—or a digital corps, so that our government can go more digital. We’re the largest government in the world. We have enormous responsibilities. To be honest, when I arrived, it was lucky if we were living in the 20th century, let alone the 21st century, of—in terms of technology and the way we use it. So we need help in that respect.

HAASS: Let’s talk about the—since we’re the Council on Foreign Relations, let’s talk a little bit about the international aspect of this. You meet with your counterparts around the world. Other people do. What’s your sense of the state of play? Because you mentioned North Korea. We see what Russia is up to. China clearly has your information and my information since it got into the OPM.

What is your sense of where the—where things sit in terms of coming up with any—the word consensus seems too ambitious, but at least a set of principles or rules globally?

PRITZKER: I think we have a lot of work to do, because we have two challenges, Richard. This is my personal opinion. We have two fundamental challenges to address this. First of all—or let me say three. First of all, most governments don’t have enough technologists to actually be able to talk about the issues with enough depth and knowledge base to really understand the challenge.

The second is governments come from different perspectives, right? We have democracies. We have authoritarian governments and we’ve got everything in between and on the fringe. And so we don’t all see the world the same. And then we have different approaches. And some want to use internet and digital and cyber policy to stifle market access, stifle engagement, build national companies or capabilities, and some want to use it to expand their economies and expand trade and engagement.

So, you know, there’s just a lot of different—it’s complicated, and I’ve participated in some groups in different—you know, the OECD has an effort. The World Economic Forum has an effort. We’ve participated—we as the Department of Commerce participate in these, and I’ve personally participated in some of them.

And you know, we have to get some likeminded countries together and come up with some principles. But before you can do that, we kind of have to do it for ourselves first, and we’re not there yet.

HAASS: Think places like the Council on Foreign Relations are prepared to participate in that effort.

PRITZKER: I think you guys have a huge role to play here. And the good news or bad news of this issue, Richard, is it’s not going away fast.

HAASS: I sense that. Before I open it up, I’m going to throw you a curveball. I apologize. I didn’t tell you I was going to do this, but I’m going to do it.

You’re the secretary of commerce. And this is—what we’re talking about here is one important dimension of what it is you do. But commerce is an important dimension of what it is you do. And things in the world of commerce ain’t looking so good. You had both presidential candidates oppose the Trans-Pacific Partnership. You had the principle challenger to the Democratic candidate opposed to Trans-Pacific Partnership. And as a result of the election, most observers would say that the Trans-Pacific Partnership, since we’re talking about hospitals, have gone from the intensive-care unit to the mortuary.

So here we are. Statistics on trade show that global trade has essentially been pretty much stagnating now for a number of years. What went wrong?

PRITZKER: I think that first of all it’s—first of all, I’m not going to buy into the premise of what went wrong. I’m going to talk about where I think we are. Where we’re at is in the—I think in the election that trade got conflated with globalization and automation and digitization. And I—meaning there’s a lot of fear and anger in our country, as we all have seen.

And what are people unhappy about? They’re unhappy because the—they don’t feel the system’s working for them, and they certainly feel that the government’s working for them. And there—that is a—those are legitimate feelings. And you know—and even though—you know, look. The economy has created 15 ½ million jobs. You know, we have the most people covered by health care in this country since we’ve been keeping records. And we’ve got, you know, carbon emissions low and so many things from a—both a societal and economic standpoint. You know, 800,000 manufacturing jobs have been created since 2010. We were hemorrhaging manufacturing jobs. So the fact that that stemmed and that we’ve got stability and growth in that area is a big accomplishment.

But people are upset about—and you know, hello, but I think that’s what we had. We had an election, and people want change. And I think the change that they want is we have to unpack that anger because trade got caught up as a—as a code word for that anger: We’re going to blame trade.

If you actually think about trade, that’s stupid because trade is our ability to sell stuff outside the United States. And we need a market bigger than—our market’s 5 percent of the world. That’s it. And we’re not a fast-growing economy. The fastest-growing economies in the world are in the Asia-Pacific. That’s why we were trying to get TPP.

What we were trying to do with the agreement is also protect our worker and protect our environment. We didn’t convince people of that. They believed the alternative narrative that there’s a better deal to be had or maybe they believed we shouldn’t do trade. I don’t buy that. I think where we are in an evolution is we’ve got to convince folks that they’re better off with this than without it. And right now we haven’t done that. And I think that we have to show folks that there’s opportunity in the trade agreements for them.

And so that’s—I think—you know, and where do I see the economic opportunity? The economic opportunity is—you know, it’s the fastest-growing marketplace in the world, and America is growing at 1 ½ percent, and those economies are growing, you know, 5, 6, 7, 8 percent. And they’re going to—that’s where new companies will evolve. And we have to show people that by bringing those tariffs down, that creates jobs here in America. And we’ve got to have data about that, and we’ve got to convince people that that’s real.

What feels real to folks right now is they saw a plant in their community close, and they said that’s because of trade.

The other thing we have to do is we’ve got to show folks about what enforcement does. We were able to—working hard, you know, with anti-dumping and countervailing duties, we’ve done a lot to stop and stem the steel dumping in our country. And in fact I’ve gotten thank-you letters from the steel industry—not just the businesses, the unions—about what—the work that we’ve done. We have the most anti-dumping and countervailing duty findings ever in our history. And about half of them are, again, steel.

We have to do a better job of showing that that—that the government works. But to do that, we also have to—the Congress has to take up issues that—of—that need addressing. We can’t have no legislation of consequence. We need Congress to work also alongside, to adjust to the challenges and not—you know, not let politics overwhelm these issues.

HAASS: OK, I’ve got lots more questions, but I will show uncharacteristic restraint and open it up. But I will be prepared to fill vacuums.

So let’s see. Any hands? I’ll do my best to call on people. State your name and keep your questions succinct or, if you’re going to give a comment, really succinct and end it by raising the pitch of your voice.

So any questions? Any takers? Yes, ma’am.

Q: Hello? Yeah, it’s—Kellie Meiman with McLarty Associates. And thank you for this.

You may or may not agree with the premise, but let’s put out the premise and following up on what Richard said that we are probably not going to be terribly proactive in the coming years when it comes to the trade agenda, digital or otherwise.

In your experience as secretary, what’s your best guess as far as—speaking of vacuums—who might fill that vacuum, in particular when it comes to digital trade, and what the impact on U.S. interests might be?

PRITZKER: Well, the vacuum is going to be filled by China, and China is already filling the vacuum. They’re—you know, in addition to TPP, there’s the RCEP, which is a regional trade agreement that China is promoting with basically similar players throughout the Asia-Pacific region. And it doesn’t have labor standards, environmental standards, and for sure doesn’t have—you know, the e-commerce provisions within the TPP require no data localization, require—there’s a whole small business chapter that allows for, you know, transparency and consistency in customs and in taxes. And it’ll—it insists upon the ability to have, you know, the FedExes and the other carriers, UPS and others, the logistics companies to have access, all of which allows for greater access for our businesses, particularly our small- and medium-sized businesses into those countries. Let alone the issues of tariffs. Also, the TPP—no digital tariffs.

So, you know, this is—you know, when the president uses the word “high-standard agreement,” it’s setting a set of rules that will allow for greater ability for the U.S. to grow and flourish in the Asia-Pacific region as well as here at home. But that’s not going to be the state of play. And the RCEP doesn’t have these kinds of provisions. It just brings the tariffs down.

So our companies will be at a disadvantage by both market-access provisions, as well as the taxes or tariffs that are put on our products to be—and services to be sold in those countries. So it’s not—this is not good news.

You know, our next administration’s leader, president-elect, you know, he’s a deal guy. And hopefully he can improve the deal and it’ll find a way, because Speaker Ryan and Leader McConnell are still pro-trade. So you know, I—Kelly and Richard, you know I’m an optimist. So I’m—you know, this may not happen again. It may be dead, dead, dead. And that’s tragedy too, because the other countries—and they’ve come out and said this—they’re going—they will do deals around us and just exclude us, because they can’t rely on our leadership.

And so this is a real problem, not only for—you’re the Council on Foreign Relations. It’s not just for our commerce. It’s also for our national security. And you know how many of the admirals and other military leaders in the Asia-Pacific, when you ask them, what’s the number-one thing we can do for American security in the Asia-Pacific, and they say TPP.

HAASS: And so my recommendation is you consider becoming a pessimist for two reasons. If things turn out badly, you can say I told you so. And if things turn out well, then they turn out well.

PRITZKER: It’s just not my nature. (Laughter.)

HAASS: OK. Just thought I’d offer that up.

PRITZKER: Thank you.

HAASS: Jim Hogeland (sp).

Q: Thank you. Madam Secretary, thank you for coming down today.

Where do you think the TTP—not the TTP—but the European-U.S. trade agreements stand now, and the future of U.S.-European trade?

PRITZKER: I think that the agreement is—first of all, it’s in a tougher place than TPP because it’s not even negotiated, one. Two, is with Britain pulling out of the EU, I think that the focus in Europe, the time and attention of the limited number of trade people at the European Commission has got to go to that first. So I think that it’s hard to see that as being a priority in Europe if Article 50 is invoked, you know, early next year, as seems to continue to be—I don’t know what this issue of going to Parliament will mean. So we’ll see. But that’s an issue.

And the third is you have elections in France and in Germany that I think, depending on how—those will influence or impact TTIP. And you—and then the other thing to think about is they’re still trying to get the Canadian free trade agreement through all the various processes that they have to go through. And you saw, you know, Wallonia can hold up the—a free trade agreement that was negotiated over a seven-year period.

So being a pragmatist, and someone who’s spent, you know, 27 years in the private sector and negotiated a lot of deals, there’s a lot of hurdles to getting through that deal, and a lot of distractions, let alone getting to the tough issues. So I just think that’s kind of the landscape, but it’s going to—you know, these things—trade agreements take people driving them. They’re hard.

Josh Bolton, I met—I met him for the first time when I first came in. And he had a dinner where he brought together the Republican and the Democratic trade negotiators and folks on the Hill who had been in these negotiations over the last 30 years. It was a fascinating dinner. My one takeaway from the dinner, they’re hard. They get done by one or two votes. And they need leadership to get done. But they’re important for our economy.

And so, you know, when you look at all those impediments you realized—you’d wonder that anything gets done, right? I certainly—you know, a deal with 12 other—11 other countries? That’s amazing to me. And the kind of deal that we got? It’s an incredible accomplishment. But, you know, right now it’s all tied up in people’s emotions, I think. And that’s a result of the election and rhetoric. And I—how this gets untied, if it ever does, I don’t know. But it’s not good for our economy.

HAASS: This is probably not the time to announce the new set of meetings here on Walloon perspectives on international affairs. (Laughter.)


Q: (Off mic.)

HAASS: We are having some electronic issues here today.

Q: Sorry about that. My name is Sam Pakar (ph) with Juniper Networks. Thank you for being here.

On the flipside of TPP, I’m curious what initiatives of yours over the past few years do you hope and think the next administration will or could carry on, that don’t have a—that will bring that sort of political momentum that was brought to TPP?

PRITZKER: I think there’s—I’ll give you three just off the top of my head. I mean, my letter is 20 pages long, so, of—it’s all not all initiatives, but I’ll give you a couple. First is Select USA, which is our effort to attract foreign direct investment to the United States. It’s good for America. It’s good for jobs. The United States over the last four years has been the number-one place to invest in the world. And that’s important. It’s an important part of the U.S.’s growth and economic strength. That’s one.

The second is what I talked about, the economic—the digital agenda. We’ve had more companies come to us in the last three months before the election and say: We need the next administration—and they weren’t really focused on which administration—to engage with us the same way you guys have. We need this kind of—when we have the government out there talking about free and open internet, trust online, privacy, security, access to broadband, making sure we had a digitally trained workforce, engaging with us pre-regulation about issues to be—think about with new technologies, they want that. They want—and that’s new. I mean, everybody’s view of the Silicon Valley is, you know, they are libertarians and they don’t want the government. They’re now appreciating what the U.S. government’s role can be in a positive way for engagement.

And then the third thing I would say is our data efforts. We made data, and making our data more available, a priority at the department. And Justin has done a heck of a job of really making that into a reality. And I know you talked about this earlier, I think, of all the efforts. I think it’s, like, a startup in its first or second year. There’s so much potential in that initiative that I really hope the next administration—they will make it their own, and that’s fine, but to recognize there’s an enormous foundation that we’ve tried to lay.

And you know, we produce 20 to 40 terabytes of information daily at the Department of Commerce. We produce economic data. We produce census data. We produce weather data. We produce patent and trademark data. You know, and that’s the obvious stuff. And when we combine our data with other data, we create incredible insights. We create insights about health care. We can create insights that can inform policy. We create insights that can inform new businesses of all sorts. So I hope—those are three off the top of my head.

HAASS: I want to squeeze in a last question, because we’ve got to end, which is: You’ve probably had as much private sector experience, or more, than any other person in the Cabinet. And now you’ve spent, after decades in the private sector, you’ve spent three-plus years in the public sector. What translated? What’s fundamentally different?

PRITZKER: Well, what translated is basic management skills, and people skills, and the ability to assemble teams, develop a strategy, figure out where you’re going to focus, and then have the leader focus on the biggest opportunities and the biggest problems. What doesn’t translate is ability to control your budget so that you can put your resources where you see the biggest opportunities. That process takes so long, and I was—to be honest, Richard, that was one of those things you didn’t tell me, you know, of—you know, at almost day one or before day one you got to be focused on that budget so that the money’s going where your priorities are. And that took me too long to figure out. And that’s a challenge.

The last thing I would say that is really clear and it’s something—it’s all about the people, whether it’s in the White House or the interagency and who you’re dealing with, and what kind of relationships you develop, and your own credibility and your team’s credibility for either delivering or thinking or being reliable. It’s all about the people in our departments. They need to be—they need direction. They need to be led. But they also need to be respected and appreciated. And I think—you know, remember, I came in, and then we shut the government down.

That was a really interesting experience. I went to APEC and Secretary Kerry and I were the two sent in the president’s place. I’m not saying either of us or both of us together could fill the president’s shoes, but that’s what we had. And I think it was the Vietnamese delegation said, well, should we buy you lunch, because we know you’re shut down and you don’t have any money. You know, we’re the United States of America. It’s amazing. But the people in our departments—I mean, you’ve worked in so many departments in government. You know, these are good folks with good intentions. But they need good leadership and they need to know what winning looks like. And we owe that to them. And that’s no different in private sector or the public sector.

HAASS: Well, that’s the perfect note on which to say thank you for not just being here for the last hour with us today, but thank you for providing good leadership over the last three-plus years.

PRITZKER: Well, Richard, thank you for all of your guidance and your help. And thanks for having me. (Applause.)


This is an uncorrected transcript.

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