This is a preliminary unedited transcript The statements within1 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1 NEAL R GROSS CO INC 2 RPTS MORRISON 3 HIF018170 4 5 6 DISRUPTER SERIES THE INTERNET OF THINGS 7 MANUFACTURING AND INNOVATION 8 THURSDAY JANUARY 18 2018 9 House of Representatives 10 Subcommittee on Digital Commerce and Consumer Protection 11 Committee on Energy and Commerce 12 Washington D C 13 14 15 16 The subcommittee met pursuant to call at 10 00 a m in 17 Room 2123 Rayburn House Office Building Hon Robert Latta 18 chairman of the subcommittee presiding 19 Members present Representatives Latta Kinzinger Burgess 20 Upton Lance Guthrie Bilirakis Bucshon Walters Costello 21 Duncan Schakowsky Clarke Cardenas Dingell Matsui Welch NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within2 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 22 Kennedy Green and Pallone ex officio 23 Staff present Karen Christian General Counsel Margaret 24 Tucker Fogarty Staff Assistant Adam Fromm Director of Outreach 25 and Coalitions Ali Fulling Legislative Clerk Oversight 26 Investigations Digital Commerce and Consumer Protection Elena 27 Hernandez Press Secretary Bijan Koohmaraie Counsel Digital 28 Commerce and Consumer Protection Katie McKeogh Press Assistant 29 Alex Miller Video Production Aide and Press Assistant Madeline 30 Vey Policy Coordinator Digital Commerce and Consumer 31 Protection Hamlin Wade Special Advisor External Affairs 32 Everett Winnick Director of Information Technology Greg Zerzan 33 Counsel Digital Commerce and Consumer Protection Michelle Ash 34 Minority Chief Counsel Digital Commerce and Consumer Protection 35 Evan Gilbert Minority Press Assistant Lisa Goldman Minority 36 Counsel Caroline Paris-Behr Minority Policy Analyst Michelle 37 Rusk Minority FTC Detailee and C J Young Minority Press 38 Secretary NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within3 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 39 Mr Latta Well good morning 40 I'd like to call the Digital -- the Subcommittee on Digital 41 Commerce and Consumer Protection to order 42 recognizes himself for five minutes for an opening statement 43 The chair now And again good morning and welcome to the first Disrupter 44 Series hearing in 2018 Today we are continuing the 45 subcommittee's efforts to examine new and innovative technologies 46 while learning directly from companies about what opportunities 47 they see five to ten years in the future 48 I'd like to thank all of our witnesses for being with us today 49 and highlight that Owens-Illinois is headquartered in my district 50 in Perrysburg Ohio and I've been -- we have held two roundtables 51 on IOT and cybersecurity issues with local businesses at your 52 headquarters and I appreciate that 53 Last summer this subcommittee hosted a showcase with IOT 54 companies for many of our member districts 55 hearing about how the IOT and interconnected network of physical 56 objects embedded with sensors and communication devices that 57 exchange information can improve productivity increase response 58 times drive down costs and benefit consumers 59 We also held a Today we will discuss how IOT is making American NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within4 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 60 manufacturing more competitive and how innovation is improving 61 the lives of Americans 62 We will also learn about barriers to the continued expansion 63 of IOT and what policy makers should keep in mind as the use of 64 IOT expands 65 The ability of devices to communicate with other devices is 66 revolutionizing industrial practices both in the United States 67 and abroad 68 sending data about their performance and condition to workers who 69 can monitor the equipment and if necessary replace it before it 70 breaks down 71 Already there are examples of smart components Municipal water systems embedded with sensors can relay 72 information about blockages or leaks that would help ensure that 73 the water keeps flowing 74 Another example is how electricity providers can monitor 75 electrical grids embedded with sensors and relays that can 76 identify outages or surges locate alternative pathways and 77 ensure that electrons keep flowing 78 Looking forward the potential to further -- to further 79 improve manufacturing processes through the combination of new 80 technologies stretches the imagination NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within5 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 81 Utilizing IOT and other emerging technologies like augmented 82 reality workers will be able to virtually make adjustments to 83 industrial systems to understand how to improve efficiency and 84 then implement necessary changes without interrupting the 85 manufacturing processes 86 IOT-connected factories will be able to monitor their need 87 for raw materials and then order those materials from 88 IOT-connected warehouses 89 IOT-connected transportation service providers will then 90 deliver necessary products without the intervention of the human 91 These and other opportunities allow IOT-connected manufacturing 92 centers the ability to devise their own ways to run more smoothly 93 Expansion-smart industrial processes will continue to 94 create historic changes in how American companies build and 95 deliver products 96 will have more choices for the goods they purchase while being 97 able to retain them at a lower cost 98 99 More efficient factories means that consumers At the same time like all new technologies IOT will create disruption in the manufacturing economy This disruption will 100 create the need for new ways of educating and preparing our 101 workforce both now and in the future NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within6 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 102 In addition cybersecurity issues remain an ever present 103 concern for an internet-connected service and the IOT is no 104 different 105 required to ensure that bad actors don't take advantage of the 106 weaknesses in IT security policies Constant vigilance and improved coordination will be 107 Today we look forward to our witnesses describing how IOT 108 is being leveraged in their facilities to improve manufacturing 109 processes how to address concerns around cybersecurity how this 110 technology is likely to develop in the future and what 111 policymakers can do to help promote continued innovation in 112 American manufacturing 113 And with that I will yield back the balance of my time and 114 now recognize the gentlelady from Illinois the ranking member 115 of the subcommittee for five minutes for an opening statement 116 Ms Schakowsky Thank you Mr Chairman 117 The internet of things of course has tremendous potential 118 to change manufacturing in the United States 119 manufacturing can help businesses save resources improve 120 performance and expand consumer choice 121 122 Smart For example a senior can remove the need for a human worker to physically check a machine I didn't mean a senior I meant NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within7 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 123 124 a sensor A sensor can remove the need for a human worker to physical 125 check a machine assuming everything works correctly 126 sensor makes the worker's job easier and reduces the opportunity 127 for human error 128 That As the internet of things evolves even more and more 129 processes can be automated and this raises some familiar issues 130 for subcommittee -- familiar issues for subcommittee -- privacy 131 cybersecurity safety and labor market impacts 132 Advanced manufacturing requires a different set of skills 133 than the production line of previous generations and workers must 134 be trained for these jobs and we need to be responsive to the 135 needs of workers who may be displaced by changes in manufacturing 136 We must also be mindful of accessibility I think back to 137 the autonomous vehicle legislation that the House passed last year 138 that this committee worked on 139 up new opportunities to those with disabilities Self-driving cars promise to open That's great 140 But some of those vehicles need to be accessible for people 141 in wheelchairs for instance so that we can fully realize the 142 potential to improve mobility 143 The same goes for manufacturing workers Depending on how NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within8 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 144 the technology is designed and integrated bringing the internet 145 of things into manufacturing could either expand or limit job 146 opportunities for those for example with visual impairments or 147 physical disabilities 148 In addition we must ensure that businesses can get the full 149 benefit of smart manufacturing 150 businesses to integrate new technologies is the broadband to 151 support it 152 Often a prerequisite for Last year Democrats on the Energy and Commerce Committee 153 unveiled a comprehensive infrastructure package -- the LIFT 154 America Act which included a $40 billion investment in secure 155 and reliable broadband 156 A serious infrastructure bill takes real dollars and I hope 157 that we can work together to advance that type of job-creating 158 legislation 159 I would also note that some of the advances we see in the 160 manufacturing stem for research supported by the federal 161 government 162 For example President Obama established a national network 163 for manufacturing innovation which included the Digital 164 Manufacturing and Design Innovation Institute in Chicago which NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com This is a preliminary unedited transcript The statements within9 may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 165 166 I have visited The Trump budget eliminates funding for the Manufacturing 167 Institutes 168 research The U S can only lead in research if we invest in 169 We need a bipartisan deal to raise the budget caps on both 170 the defense and non-defense side so that important investments 171 in infrastructure and innovation can continue 172 173 I thank you and I yield back unless there is anybody who wants my remaining time 174 Thank you 175 Mr Latta 176 Okay I yield back Thank you very much The gentlelady yields back 177 The chairman of the full committee has not arrived yet 178 is there anyone on our -- the Republican side -- wishing to claim 179 that time 180 But Not hearing anyone the chair now recognizes the ranking 181 member of the full committee the gentleman from New Jersey for 182 five minutes 183 Mr Pallone 184 Since 2015 this subcommittee has been examining the 185 Thank you Mr Chairman opportunities and challenges of the internet of things from NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 10 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 186 187 autonomous vehicles to wearable technology But the internet of things extends beyond consumer products 188 It can be found across industries including in the energy 189 healthcare and transportation sectors and today we will discuss 190 how it can help make manufacturing more efficient more 191 productive and more safe 192 The internet of things is used in smart manufacturing to make 193 real-time control of production possible 194 using smart manufacturing technologies lowers their energy use 195 reduces waste improves product quality and saves money and with 196 more efficient manufacturing we see less pollution fewer health 197 issues for our work force and more opportunities for good 198 technology-based jobs 199 Companies report that As with all connected technologies strong cybersecurity is 200 essential to successful smart manufacturing 201 of things helps ensure that a manufacturer is monitoring 202 measuring and sensing control systems work together one weak 203 point can affect the whole network 204 While the internet Imagine the potential consequences if a malicious actor 205 brought down automated manufacturing at a pharmaceutical plant 206 that makes vaccines or if network disruptions affect the quality NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 11 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 207 208 control monitoring for seatbelts at an auto plant Experts have found that companies in the U S are not doing 209 enough to address these risks and that a strong comprehensive 210 framework for cybersecurity in manufacturing is urgently needed 211 And also unlike our smart phones which seem to be replaced 212 every few years large machinery is used for decades adding to 213 the difficulty of ensuring they are consistently and properly 214 updated for security vulnerabilities 215 And I have said at previous hearings on automation that we 216 should not be scared of these new technologies but we must realize 217 their potential effect on jobs 218 To stay competitive we must ensure that employers are 219 prepared for the changing workplace and we need to invest more 220 in research and development so that the U S continues to lead 221 the world in innovation 222 For years we have listened to experienced witnesses in 223 industry academia and government tell us that federal 224 investment is vital if you want to keep making things in America 225 Unfortunately the Trump administration proposed a budget 226 last year that eliminates dozens of essential successful programs 227 that make manufacturing innovation possible and provides support NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 12 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 228 229 for U S factory workers Moreover industry witnesses repeatedly tell us what they 230 really need is stability Yet Republicans have repeatedly 231 failed to pass final appropriation bills for the fiscal year that 232 began on October 1st and we are once again at a deadline tomorrow 233 It appears that Republicans are going to try once again to kick 234 the can down the road 235 And with this delay Republicans are adding even more 236 instability ultimately hurting American manufacturers and 237 workers 238 239 I think those delays must end but we will see And I would like to yield the remainder of my time to the gentlewoman from California 240 Ms Matsui Thank you Ranking Member Pallone 241 The internet of things and the industrial internet of things 242 represents a shift in how companies and manufacturers interact 243 with data 244 Smart manufacturing enables real-time monitoring and 245 tracking of a company's assets through the manufacturing process 246 New technologies and tools can be critical to the means of 247 facilitating the efficiencies promised by Industry 4 0 248 Of course connectivity is a cornerstone of the next NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 13 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 249 industrial revolution and wireless connectivity depends on the 250 availability of spectrum 251 I believe that technologies like block chain could play an 252 interesting role in both spectrum sharing to potentially maximize 253 efficient use of spectrum bands and as a means of tracking digital 254 records in real time 255 256 Thank you and I look forward to the witnesses and I yield back 257 Mr Pallone 258 Mr Latta And I yield back Mr Chairman Thank you very much 259 the balance of this time 260 statements The gentleman yields back This concludes member opening 261 The chair reminds members that pursuant to committee rules 262 all members' opening statements will be made part of the record 263 Again I want to thank all of our witnesses for being with 264 us today We take -- we appreciate you taking time to testify 265 before us and it's very important to hear from you and your 266 testimony 267 Today's witnesses will have the opportunity to give 268 five-minute opening statements followed by a round of questions 269 from the members NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 14 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 270 Our witness panel for today's hearing will include Mr Rodney 271 Masney the vice president of technology and service delivery 272 information of technology at Owens-Illinois Mr Thomas 273 Bianculli chief technology officer at Zebra Technologies 274 Corporation Dr Thomas R Kurfess professor and HUSCO Ramirez 275 distinguished chair in fluid power and motion control at the 276 George W Woodruff School of Mechanical Engineering at Georgia 277 Institute of Technology and Mr Sanjay Poonen the chief 278 operating officer at VMWare 279 So we really appreciate you all being with us today and Mr 280 Masney you are recognized for your opening statement for five 281 minutes 282 Thanks again for being with us NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 15 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 283 STATEMENTS OF RODNEY MASNEY VICE PRESIDENT TECHNOLOGY SERVICE 284 DELIVERY INFORMATION TECHNOLOGY OWENS-ILLINOIS THOMAS D 285 BIANCULLI CHIEF TECHNOLOGY OFFICER ZEBRA TECHNOLOGIES 286 CORPORATION DR THOMAS R KURFESS PROFESSOR AND CHAIR IN FLUID 287 POWER AND MOTION CONTROL GEORGE W WOODRUFF SCHOOL OF MECHANICAL 288 ENGINEERING GEORGIA INSTITUTE OF TECHNOLOGY SANJAY POONEN 289 CHIEF OPERATING OFFICER VMWARE 290 291 292 STATEMENT OF MR MASNEY Mr Masney Good morning to the members of the committee 293 and to my colleagues who have travelled to Washington today to 294 discuss the importance of the internet of things 295 Before I begin I would like to thank Congressman Latta for 296 his continued leadership and engagement on the issue I also want 297 to thank the committee for the opportunity to discuss IOT which 298 is important to U S manufacturing and my company specifically 299 Owens-Illinois headquartered in Perrysburg Ohio is the 300 world's largest manufacturer of glass containers serving 301 globally recognized brands throughout the world 302 303 Our company operates 79 manufacturing plants throughout the world 17 of which are located in the United States Glass making NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 16 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 304 has historically been a trade where craftsmen -- crafts persons 305 and apprentices would develop expertise in the art of glass 306 making 307 At the turn of the century Michael Owens invented automated 308 glass manufacturing which was a huge step change in productivity 309 and worker safety 310 While the glass making process is highly automated today 311 the industry is poised for the next step change which will come 312 from the factory becoming increasingly connected with IOT 313 technologies throughout the end-to-end process 314 The information collected through IOT technology will be 315 used to transform the craft of glass making to that of data-driven 316 science which will enhance the competitive position of glass in 317 the global packaging industry 318 Glass containers are the most sustainable option in the 319 competitive packaging landscape with a life cycle that goes from 320 cradle to cradle reusable in many markets and infinitely 321 recyclable into either new glass containers or other products 322 Glass is truly the sustainable packaging option 323 Owens-Illinois is on an IOT journey which will transform our 324 manufacturing process and add value to the products and services NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 17 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 325 326 that we sell our customers There are several IOT areas of focus for OI Improve 327 manufacturing performance through higher yields increase 328 quality and reduce costs 329 our end-to-end manufacturing process 330 IOT will deliver deeper insights into The data generated from sensors in the plant will provide 331 insights into environmental conditions process settings and 332 control variances enhancing our ability to increase first-time 333 yields and improve quality 334 This work will require skilled engineers information 335 technology professionals and data scientists 336 required through IOT will be used to reduce reaction time in the 337 plants and allow us to adjust the process if controls are slipping 338 out of tolerance 339 The data Addressing the variations in manufacturing process will be 340 realized in a more proactive manner 341 transform glass making -- the glass manufacturing process from 342 one of reactivity to one that is proactive and highly automated 343 The IOT platform will The information generated by new sensor technology data 344 science and information automation will increase yields and 345 improve quality while achieving reduced costs and enhancing OI's NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 18 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 346 347 ability to compete in the U S and global markets Energy management and predictive maintenance are the second 348 area of IOT development OI is pursuing 349 of energy to melt and form glass and to operate a glass container 350 manufacturing facility 351 It takes a great deal Developing sensor technology can help glass containers 352 maintain the status of the most sustainable packaging solution 353 and reduce energy used to operate our furnaces 354 Advanced sensor technologies can also be used to collect 355 information while monitoring equipment throughout the 356 manufacturing facility and could be critical to seeking new ways 357 to maintain equipment 358 IOT technologies and the concepts around IOT is enabling OI 359 to also create and develop new and differentiated products and 360 services for our customers with the goal to ensure the integrity 361 safety and authenticity of its contents 362 I would like to highlight the several concerns regarding 363 successful deployment and sustainability of IOT Because the 364 achievable deployment of IOT throughout an enterprise can be quite 365 daunting a successful deployment of IOT requires sensors PLCs 366 IT systems networking massive amounts of storage and software NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 19 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 367 to achieve the desired business outcomes 368 Seeking ways to make these investments more affordable can 369 be a way to help U S manufacturing accelerate its investments 370 in IOT technologies 371 Protecting against cybersecurity risks will become more 372 critical while manufacturers deploy IOT in facilities 373 Manufacturing equipment devices sensors and control systems 374 that previously may have been standalone maybe exposed not just 375 within a plant location but also potentially throughout an 376 enterprise 377 Cybersecurity-related disruptions could cause unplanned 378 down time or impair productivity 379 also put health and safety of employees at risk 380 Cybersecurity attacks could Data scientists are in short supply and high demand 381 Transformation of the workforce becomes more critical 382 Tomorrow's manufacturing workforce must be increasingly 383 knowledgeable about the use of information technology 384 Engineering disciplines and information technology skills will 385 be needed to deliver and sustain these solutions 386 387 The use of business intelligence analytics and the role of data scientists will be critical to success of IOT NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 20 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 388 In conclusion as manufacturers continue on the IOT journey 389 Congress may want to look at ways -- into the following ways to 390 help foster growth of IOT technology and its use assist 391 manufacturers and making IOT technologies more affordable by 392 encouraging research and investment in these capabilities or in 393 programs which encourage manufacturing companies to deploy IOT 394 or programs and resources that address cybersecurity in U S 395 businesses and encourage more research in the IOT data science 396 discipline and seek ways to encourage a supporting pipeline of 397 skilled workers through universities and manufacturing and 398 related technicals -- technical schools 399 Thank you for your time and attention 400 The prepared statement of Mr Masney follows 401 402 INSERT 1 NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 21 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 403 Mr Latta 404 And Mr Bianculli you are recognized for five minutes 405 Well thank you very much Thank you very much for being with us NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 22 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 406 STATEMENT OF MR BIANCULLI 407 408 Mr Bianculli Thank you Chairman Latta Ranking Member 409 Schakowsky and members of the subcommittee for the opportunity 410 to testify before you today 411 I am Thomas Bianculli the chief technology officer of Zebra 412 Technologies Corporation and we are a global leader in bringing 413 internet of things solutions to business-to-business and 414 business-to-government markets 415 With approximately $3 7 billion in revenue nearly 7 000 416 employees and doing business in more than 40 countries Zebra 417 is a trusted partner to more than 95 percent of all Fortune 500 418 companies 419 And while many Americans may not know us by name I am sure 420 they come into contact with our solutions every day 421 the bar code labels that are printed and applied to airline baggage 422 tags or express delivery packages and pharmaceutical prescription 423 bottles are often generated by a Zebra bar code label printer and 424 tracked and managed by Zebra bar code scanning technology and 425 mobile computers 426 For example Similarly manufacturing warehouse and delivery workers NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 23 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 427 as well as countless healthcare workers across the globe employ 428 our mobile computing devices in their daily work to increase 429 efficiency reduce errors and drive a better customer 430 experience 431 Overall what we see in the marketplace every day tells us 432 that manufacturers and their supply chain partners are 433 increasingly recognizing the transformational role of industrial 434 IOT 435 Solutions in driving growth and improving performance in 436 several key areas of business activity including increased total 437 production and through put improved ability to adjust to 438 fluctuating market demand and increased ability to produce a 439 greater number of product variance and increased visibility into 440 operations across a given business enterprise and a decreasing 441 cost of production 442 All of these advances reflect the fact that at its heart 443 the IOT revolution is a dramatic change in advancement in the way 444 companies capture and ultimately share data 445 The ability to have data about inventory that's immediately 446 available to both plant floor managers and suppliers is providing 447 new levels of visibility that heightens operational performance NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 24 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 448 and from -- and from the greater visibility comes the great 449 advances we are seeing in manufacturing across a wide array of 450 industries 451 In the opening comments from Chairman Latta I heard mention 452 of augmented reality and wearable technology I think we should 453 really keep that in mind as we see industrial internet of things 454 creating more and more data 455 that data analyze that data and then use that information to 456 inform a worker There is the opportunity to collect 457 And as we are starting to see that occur we are seeing that 458 mobile and computing technologies migrate from an interface that 459 is handheld to interfaces that become heads up and are able to 460 augment our physical reality with digital information that helps 461 U S citizens and U S workers just get the job done 462 And I think that's an incredible opportunity for competitive 463 advantage for us to help drive efficiency and to lead the world 464 by way of example in that regard 465 Whirlpool Corporation wanted to optimize mobile device 466 management at its distribution centers as a way of enhancing 467 productivity 468 devices battery life the inability to update devices in a They were experiencing problems with misplaced NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 25 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 469 systemic way and a lack of data metrics around device 470 performance 471 device health productivity location and ensure proper 472 deployment It needed a centralized management system to track 473 To solve their problem Zebra worked with Whirlpool to employ 474 an IIOT-based solution which uses our mobile computers connected 475 to their vehicle-mount computers and our handheld devices 476 We connected all of their devices back to the cloud across 477 all of their facilities We are able to manage the predictably 478 detect when batteries may need replacing when the performance 479 and health of applications on the device the resiliency and 480 security of the network and by monitoring all that information 481 in near real time we can detect and proactively intercede if we 482 see that a device is going to have a problem thereby driving up 483 the overall worker efficiency and uptime of their operations 484 Congress can play an important role in helping to ensure that 485 all companies across America can successfully employ industrial 486 IOT-based solutions 487 Specifically we urge you and your colleagues to support 488 infrastructure legislation that promotes the deployment of mobile 489 broadband networks as well as directs the NTIA and FCC to allocate NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 26 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 490 more commercial licensed and unlicensed spectrum in a 491 technology-neutral way 492 Additionally we urge Congress to advance policies that will 493 help assure coordination among government agencies so that 494 regulation of IOT does not needlessly impede innovation 495 In sum Mr Chairman we commend the subcommittee for holding 496 this hearing for your ongoing efforts to ensure that American 497 industry has the ability to continue to roll out new technologies 498 that will improve the lives of both our workers and our citizens 499 IOT presents a transformative opportunity some calling it 500 the fourth industrial revolution the advent of cyber physical 501 systems that will create all types and sizes across -- of 502 opportunity for jobs of all types and sizes across the United 503 States to work smarter be more productive and help improve the 504 overall American economy 505 At Zebra we are committed to bringing IOT solutions to 506 companies to help them achieve their goals 507 continuing to work with the subcommittee and I thank you for the 508 opportunity to share a Zebra story and I am happy to answer any 509 questions you and your colleagues may have 510 We look forward to Thank you NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 27 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 511 The prepared statement of Mr Bianculli follows 512 513 INSERT 2 NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 28 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 514 Mr Latta Thank you very much 515 And Dr Kurfess you are recognized for five minutes 516 Thank you NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 29 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 517 STATEMENT OF MR KURFESS 518 519 Mr Kurfess Thank you Chairman Latta Vice Chairman 520 Kinzinger Ranking Member Schakowsky and other members of the 521 committee 522 I do appreciate the opportunity to testify here before the 523 subcommittee So I am Tom Kurfess I am at Georgia Tech The 524 difference between my colleagues here and myself is our product 525 or our students 526 For example mechanical engineering produces about 3% to 4% 527 of all the mechanical engineers in the nation and these kids are 528 extremely capable and really moving a lot of the IOT forward 529 I have spent a lot of time in manufacturing I grew up 530 actually in a plant in Congresswoman Schakowsky's district I 531 went to high school there and so forth -- a small family plant 532 So I've been in production for over 40 years 533 And if you look at it you know we talk about the fact that 534 yes it's going to take a lot of money to sensor up as we would 535 say it 536 they're providing free information you know to us and so forth 537 But there are already a lot of sensors out there and So there are a lot of sensors They're generating big data NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 30 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 538 The companies know this and we are starting to track this 539 team works with two major U S OEMs in automative a major OEM 540 in aerospace and several large-scale suppliers to figure out what 541 their digital manufacturing platforms need to look like 542 And basically all the data are there for the taking and 543 how are we going to make use of them right 544 is what can we do with it 545 And then the question Well certainly we can improve efficiency 546 heard about that 547 lower our waste 548 My I think we've We could lower our energy consumption You know this is very clear We can It's been demonstrated time 549 and time again 550 BMW plant in South Carolina -- tremendous opportunities there in 551 terms of moving it forward 552 I've spent a lot of time actually over at the A safer work place -- certainly the more sensors you have 553 out there you know what's going on You can make sure that your 554 employees are safe and you can make sure that those machines keep 555 them safe and actually make their jobs easier and more reliable 556 But perhaps a very important point that we need to really 557 understand is that this capability allows us to respond rapidly 558 to the changing markets and the changing technologies that are NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 31 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 559 out there and those technologies and markets are changing 560 rapidly 561 It took about 70 years for the telephone to become 562 ubiquitous It took about 10 years for the mobile phone to become 563 ubiquitous It took about a year for the smart phone to become 564 ubiquitous This is how fast things are changing 565 566 567 So we can have a safer place a place that responds better and what industry doesn't want to respond better and faster What do we get out of the internet of things for 568 manufacturing 569 There's no doubt about it 570 say this again it requires a much lower-skilled workforce and 571 a better trained workforce 572 First of all there are better paying jobs But I will caution you and I will But it's not impossible to do I think we just saw over here 573 and I will wave mine around too people are used to the smart phone 574 This is not something that they're afraid of 575 to use it and actually we are using smart phones in production 576 operations day in and day out at a number of different 577 corporations We can get them 578 We get a stronger more productive manufacturing base which 579 is always good for the nation's economy and national security NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 32 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 580 and we basically excel in the strengths of the culture of the 581 United States of America 582 We are innovative right We have some of the best ideas 583 and what this technology allow us to do IOT for MFG as we call 584 it it allows us to get these ideas out there rapidly and not just 585 out there but to scale them in terms of the market 586 And you know if somebody else wants to copy us come get 587 us because by the time you copy us you know we'll have our next 588 technologies out there and we can see how fast these things are 589 moving along 590 So how do we get there Basically we have to look at 591 workforce development I heard cybersecurity a number of times 592 This is critical 593 at companies where they say no we are going to not do this because 594 of cybersecurity issues You know people -- and we've actually seen 595 They have now come to the realization that we have to do this 596 if you're going to compete and we are looking at cybersecurity 597 We have a lot of for example national apps 598 NIST is doing some great work in cybersecurity analysis and 599 so forth in conjunction with our universities and a variety of 600 companies NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 33 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 601 So it's there We are thinking about it We are working 602 on it and we are beating the bad guys in most cases We have to 603 develop that infrastructure to make sure that that broadband 604 connectivity -- I heard that right -- that is so important 605 Again the low-cost labor areas yes you see their shiny 606 new factories but a lot of low-cost labor areas don't have that 607 type of connectivity 608 of that 609 We can leverage that We could make use That is where we can compete We also need to take a look at our universities Right How 610 do we leverage our universities 611 labs -- places like NIST and bring them together 612 National Network for Manufacturing Innovation Manufacturing 613 USA 614 things forward for the United States of America and this is where 615 we can really leverage these things 616 How do we leverage our national I heard the This is where companies are coming together to really move So basically this is going to allow us to rapidly address 617 a changing market not just what people want but what the 618 technology is when it comes out there 619 The bottom line is IOT for manufacturing it's going to grow 620 It's going to grow high in jobs But that basically means not 621 just workforce development and workforce training not training NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 34 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 622 the next generation workforce but training the current generation 623 workforce 624 We just can't right 625 and people are not afraid of the technology 626 know we are doing Pokemon out in the factories right now and 627 they're tracking things and they love it okay and their reward 628 might be to get off a couple of hours early on a Friday afternoon 629 It can be done We can't compete on the low-end jobs But we can compete on the high-end jobs It is amazing You But it allows to grow the national economy to grow key 630 sectors of the national economy -- high-tech sectors -- to 631 strengthen our national security to make sure that we are able 632 to move forward in a rapid a nimble way 633 Thank you very much 634 The prepared statement of Mr Kurfess follows 635 636 INSERT 3 NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 35 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 637 Mr Latta 638 And Mr Poonen you are recognized for five minutes for your 639 640 Again thank you for your testimony opening statement Am I pronouncing your name correctly sir Thank you NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 36 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 641 STATEMENT OF MR POONEN 642 643 Mr Poonen Dear Chairman Latta Ranking Member 644 Schakowsky members of the subcommittee and my honored 645 colleagues from academia and the industry it's an honor to be 646 here to testify in front of this committee 647 And by way of instruction my name is Sanjay Poonen I am 648 chief operating officer of VMWare 649 software companies in the world about a $54 billion market cap 650 company 651 652 VMWare is one of the top five We are headquartered in the Silicon Valley in Palo Alto We are also part of the Dell Technologies family 653 It's very clear from a lot of what you have heard already 654 that the internet of things and IOT has a profound impact on the 655 consumer economy and also in the industrial age 656 I will just give you two examples of how our lives have 657 changed One is from my past job I worked for a German software 658 company SAP and many of the meetings that I had would actually 659 be at 1 00 p m in the afternoon German time which is 5 00 a m 660 Pacific time 661 I find out that overnight some person had the great joy of So mean scheduled I go down to my home office and NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 37 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 662 cancelling the meeting 663 Now listen wouldn't it have been nice if I could have known 664 that before I went to bed and I could have probably woken up an 665 extra hour later 666 Well it would be nice if once the meeting is cancelled it 667 actually communicated with my alarm clock that actually set my 668 clock up an hour later which is very much possible today with 669 IOT because often the alarm clock and your calendar is on the same 670 device 671 Another example -- when I leave to go to ski -- not a lot 672 of snow this year in Tahoe but the years that we do have snow 673 we'll have a debate with my wife as to whether we turn the heating 674 off 675 And I like to keep the energy down and keep the house not 676 necessarily heated all the time 677 for our kids when we come back home 678 She wants to keep the house warm Well now with modern thermostats you can actually turn your 679 thermostat on or off from your phone when you get about an hour 680 closer to NIST and many others are doing this 681 So this is the practical way in which our consumer lives are 682 being transformed for the better with IOT and this is now starting NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 38 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 683 to invade the American worker 684 And manufacturing actually becomes enormously smart as you 685 heard because of this and it has profound impact we believe 686 in lots of new areas -- artificial intelligence big data machine 687 learning that can be very positive as opposed to as much as what's 688 also been talked about the negative impacts 689 But it does have some profound security challenges and that's 690 been a key part to VMWare's focus VMWare's focus is to ensure 691 that the cyber attacks that we've seen whether it's WannaCry 692 Petya many of these things that could get even more profoundly 693 you know disruptive in the context of IOT is something that we 694 can attack and we can protect ourselves from 695 So we've actually been focused on aspects of cybersecurity 696 and cyber hygiene that allow companies to protect themselves in 697 this era of IOT 698 We've got some very practical ways in which management 699 security would be baked into the infrastructure of both technology 700 and manufacturing 701 We think that everybody today whether you're in technology 702 or not in technology need to be educated in some very fundamental 703 principles of security like for example lease privilege micro NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 39 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 704 segmentation multi factor authentication and identity 705 management encryption patching 706 These are all very fundamental concepts that board members 707 today are being educated on and certainly government and other 708 professionals need to 709 As we think about the notion of hardware that's also getting 710 more sophisticated 711 devices -- one of my colleagues 712 We heard about mobile devices and rugged Edge gateways now are becoming ways by which this miniature 713 data center could actually become micro into something like a 714 little nano data center protected and ready for the production 715 line 716 717 These are the ways in which we believe that the internet of things and smart manufacturing can actually be secure 718 In closing the internet of things will have a significant 719 and positive impact we believe on both American innovation and 720 jobs 721 Billions of IOT devices will be in the free market for 722 consumers will be available to manufacturing and can have a very 723 positive impact 724 But to make sure that this is actually deployed in a safe NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 40 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 725 fashion security is key 726 and manufacturers were to trust these devices we've got to take 727 security seriously and we believe that this is something that both 728 the coming together of academia of industry and the government 729 makes this a priority 730 731 If consumers are to trust these devices We look forward to working and doing our part at VMWare to make this happen 732 The other aspect of this that could be very positive is the 733 way and which the data can actually help a whole new category of 734 jobs whether it's machine learning big data artificial 735 intelligence 736 This is going to be the next color of jobs and much the same 737 within the agrarian culture 738 the coming of computing and high tech the same way the next 50 739 to 100 years are going to be very exciting in terms of new jobs 740 A hundred years ago we couldn't see Chairman Latta Ranking Member Schakowsky I applaud the 741 leadership of this committee for holding this hearing today 742 Thank you for the opportunity to testify and I look forward to 743 answering the committee's questions 744 The prepared statement of Mr Poonen follows 745 NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 41 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 746 INSERT 4 NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 42 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 747 Mr Latta 748 today 749 subcommittee 750 751 752 Well again thank you all for being with us We really appreciate your testimony before the And now we'll move into our question and answer portion of the hearing and I will recognize myself for five minutes Mr Masney what are the major advantages for OI that come 753 from using IOT 754 in Perrysburg where you do a lot of the testing and seen a lot 755 of what you're implementing there 756 walk us through what you're doing 757 Mr Masney And again when I've been through the facility Certainly But if you could maybe just Some of the advantages are 758 increased productivity in our manufacturing facilities 759 said in my statement glass is still somewhat art and we need 760 to transform to data-driven science manufacturing process where 761 we can increase our yield 762 As I Manufacturing -- glass manufacturing yield is somewhere in 763 the 90 to 91 percent yield rate 764 are able to unlock potential and capacity out of our factories 765 and better serve the markets and ultimately reduce our cost to 766 our customers 767 Mr Latta If we are able to do that we What are some of the challenges that you're NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 43 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 768 769 facing out there today in the home manufacturing process then Mr Masney And having enough of knowledge base in a 770 workforce that has a demographic that is changing The 771 degeneration of knowing what to do when to do it is changing 772 in our organization and being able to empower people with 773 information so that they can react faster and more nimbly is 774 incredibly important 775 today because many of our machines and equipment stand alone 776 they're not -- they're not exposed to cyber attack 777 network them and collect more and more information to better 778 empower our workforce it's going to be incredibly important that 779 we protect the floor our people and the company And cyber security -- that is a concern So And as we 780 Mr Latta 781 Mr Bianculli can you give us an example of how a sensor 782 can be used to convert data from a format that allows companies 783 to improve manufacturing efficiency 784 Thank you very much Mr Bianculli Sure We -- I think a couple of examples 785 there -- one is just driving operational efficiency 786 the Whirlpool example earlier where we just have a stream of data 787 coming from devices 788 I mentioned Well just like we've done that with Whirlpool on device NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 44 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 789 health we are looking at doing that with the entire manufacturing 790 facility 791 So imagine if you will a smart manufacturing environment 792 We know where goods are 793 in that environment 794 we can bring the intersection of all those things together in an 795 optimized way 796 We know where the capital assets are We can know where people are located and We think about our daily lives using a route navigation GPS 797 system in our vehicles The incredible amount of advantage -- 798 the ability to dynamically reroute based on whether in traffic 799 in real time and think about going from outside the four walls 800 to an inside the four walls factory environment and being able 801 to bring that same level of route optimization work flow 802 efficiency dynamic work flow optimization to the processes by 803 instrumenting the environment 804 I think that as we look at data coming from these environments 805 we are moving towards a world where we no longer operate on what 806 we think is happening -- where do I think my people are where 807 do I think my assets are where do I think inventory is -- we are 808 operating in a world where we truly know that in real time 809 And so we are able to close this gap between what we think NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 45 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 810 is happening and what we would ideally like to be happening and 811 that is where the benefit is -- the efficiency benefit 812 return on investment is being able to close that gap 813 can run your operations in a much more precision way and in a way 814 that's optimized from the get-go 815 The And so you We are seeing the need -- the imperative to do that because 816 of the on-demand economy The notion that products and services 817 are being delivered ever closer to the point of demand is a 818 reality 819 good or service is delivered sometimes in an hour to our doorstep 820 if it's a package that we ordered online and we live in an urban 821 city or in some cases I am standing at a street corner and I 822 request a ride and in moments I expect that to show up We order online and the expectation is that product or 823 So the production and provisioning of products and services 824 ever closer to the point of demand dictates mandates it's an 825 imperative that we have IOT solutions that are able to create 826 real-time streams of data to enable that new reality to propel 827 us forward 828 Thank you 829 Mr Latta 830 Mr Poonen I guess in my last 40 seconds -- this is going Thank you NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 46 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 831 to be quick -- this deals with how to manufacturers manage the 832 threat of cyber attack disrupting their operations 833 Mr Poonen 834 Yes I think one of the things that we have learned Chairman 835 sir is that in this world of mobile this device is not sort of 836 a remote control to your life 837 Okay Good We've learned a lot about security in the last 10 years with 838 the mobile device These operating systems have adapted 839 themselves from the PC era to have even greater level of security 840 whether it's Apple iPhones or Android devices 841 security things that you heard -- so you saw in the early days 842 of Windows 843 of Windows 10 are better at being able to -- Some of the And even the PC operating systems latest version 844 We respect that same innovation and this country has got 845 some of the best research whether it's from academia or other 846 places 847 that run on these IOT devices 848 to just have a greater and greater level of enterprise hardening 849 We'll continually pour it into the operating systems That's one and we expect that Secondly the devices and the systems that they talk to 850 whether it's the data center or the cloud will have the types 851 of things that I talked about -- cyber security security NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 47 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 852 infrastructure baked into it that have the types of things like 853 segmentation multi factor authentication encryption 854 are learning from all of the attacks that have happened to make 855 those also systems hardened And we 856 And then the third and final thing is just basic hygiene 857 and sort of just like you have a good diet you do your exercise 858 you still got to have certain hygiene principles -- brushing your 859 teeth taking a shower things of those kinds 860 We've got to educate you know government industry 861 academia college students so that as they approach the workforce 862 there's simple things you probably want to do 863 You may not want to send your password for example in clear 864 text on a text message These are the types of things that -- 865 and you may want to change your password -- these are the types 866 of things that I think are very easy for us to continue to educate 867 that make us all a much more secure society and a secure 868 infrastructure for IOT 869 Mr Latta 870 And the chair recognizes the gentlelady from Illinois the 871 872 Thank you very much ranking member of the subcommittee for five minutes Ms Schakowsky Thank you NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 48 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 873 First Owens-Illinois -- are you still in Illinois at all 874 Mr Masney 875 Ms Schakowsky 876 877 878 Yes we are Okay We are in Streeter Illinois Glad to hear that being from the Chicago area I think I years ago saw the plant Were you over in Granite City down in southern Illinois 879 No Okay Let me ask Dr Kurfess some questions 880 How do workers in manufacturing stand to benefit from the 881 adoption of these technologies 882 example positive things -- prevent workplace injuries limit 883 workers' exposure to hazardous materials et cetera 884 are some of the pluses of IOT for workers It's And what 885 Mr Kurfess 886 You know there are a variety of -- you know there are a 887 variety of things that could be going on for example worker going 888 through the factory 889 Sure Can the IOT be used to for a great question If you have been for example to an automotive factory you 890 see the robots going on They're moving they're working 891 are carrying sometimes in the thousands of pounds 892 very powerful robots 893 them So they're And you'd never let a human get close to NEAL R GROSS 202 234-4433 These COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 49 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 894 But now you have the robot area You have the human area 895 and the reality is now with IOT of things you know and again 896 one has to be careful about you know this issue of privacy and 897 so forth 898 But I am even walking down with my phone I know where people 899 are So if somebody walks into you know an incorrect area you 900 know we can shut it down and make sure the roadblock you know 901 doesn't hurt them 902 But even better we can start to localize it better -- a much 903 tighter resolution such that the robots can be working with the 904 people 905 You know robots are great But they're never going to 906 replace people completely 907 really heavy things but try and pick up an egg with one and so 908 forth 909 I mean they're great at lifting We have great research on that But you know again 910 working together is really where you leverage it and by the way 911 it also allows us to get rid of a lot of the really nasty jobs 912 You're saving about -- you know taking away the sort of the 913 terrible jobs checking cooling tanks and lubrication tanks and 914 machines That's all automated NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 50 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 915 In fact this morning I was down in your cafeteria and I 916 saw your coffee containers -- the coffee urns They have the same 917 technology that we are using now in there 918 50 cents and so the only difference is ours are online and so 919 they're reporting the information 920 companies like Chik-fil-A and McDonald's about you know how to 921 do that for your know improving their efficiency You know it's about But we are talking with 922 So these are the types of things we see out there 923 Ms Schakowsky Well I am also very interested in keeping 924 manufacturing jobs in the United States and bring them back and 925 you wrote in your testimony that America's infrastructure gives 926 us an advantage there 927 Mr Kurfess I would like to hear more about that Sure Well if you look at everything from 928 our roads to broadband and so forth and again these are things 929 that people really use all the time 930 you're wired into 931 that capability and that growing of that capability allows us to 932 take the big data generated by all of these different sensors 933 and in some instances again it's not just well I've have a bunch 934 of sensors but in some instances we have -- I've got this phone 935 with this really nice camera and we have you know our -- we have Whether it's broadband or your factory or broadband you know over here NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 51 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 936 937 our workforce taking a picture So now we are combining right the workforce who says oh 938 this is good -- this is bad -- taking the picture That brings 939 it together -- integrates the information together But you have 940 got to get that out streaming all of the data and it is a lot of 941 data 942 And then of course the other infrastructure of these the 943 educational infrastructure 944 technology from even five or ten years ago it's old 945 got to keep that work force spun up 946 infrastructure needs to be put into place so that you know 947 today's worker is still viable in five or 10 years 948 Ms Schakowsky You know if you think about the So we've Lifelong learning and that Well I was going to ask about that because 949 you -- the role of government and certainly public education 950 is a part of that but there's also federally funded research 951 et cetera 952 So government does have a role to play then doesn't it 953 Mr Kurfess Oh definitely And all the way -- again you 954 know from the K through 12 that we hear about education and so 955 forth to our Bachelors students or Masters and Ph D s I mean 956 if you take a look at National Science Foundation I was sponsored NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 52 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 957 at MIT right as a National Science Foundation on a project there 958 A good chunk of our graduates Master's and Ph D s in engineering 959 technology and in science are supported by the National Science 960 Foundation 961 You know again that's something that you don't really see 962 but they're supported as research assistants and this is a very 963 important thing to move forward you know the entire 964 infrastructure for the nation 965 Ms Schakowsky I appreciate that 966 So I am concerned because spending plans that we've seen from 967 Republicans make drastic cuts to many of these things and to 968 programs that directly support manufacturing and innovation 969 including President Obama's Manufacturing USA initiative 970 971 972 So these cuts I am assuming then could be a barrier to progress Mr Kurfess Yes I think that what you have to look at 973 right is in the short term it's fairly easy to make a cut like 974 this and so forth 975 But really the federal government -- we don't have AT T Bell 976 Labs anymore 977 companies We don't have really long-range thinking You know they're focusing on the here now and I NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 53 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 978 don't blame them right 979 The federal government has to step in there and really do 980 some of the longer range thinking 981 it Germany's doing it 982 it 983 I guarantee you China's doing You name it other countries are doing We need to do it So in five years in 10 years we are positioned to continue 984 to move forward 985 be looking at a little bit longer term and that's what these R D 986 capabilities are all about that we are talking about 987 988 Ms Schakowsky Mr Kurfess 990 Mr Latta 992 993 I appreciate that and I yield back Mr Chairman 989 991 This is really again what we really need to Thank you Thank you very much The gentlelady yields back The chair now recognizes the gentleman from Illinois the vice chair of the subcommittee for five minutes 994 Mr Kinzinger Thank you Mr Chairman 995 And just to go off with what you were saying sir I agree 996 with you I think there's a role for the government in terms of 997 long-term strategic planning that sometimes get lost in you know 998 the kind of momentary debates which is you know as we look at NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 54 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 999 world that changes whether it's with IOT whether as we look at 1000 autonomous vehicles which this committee deals with and all that 1001 kind of stuff we have to have people that are thinking long range 1002 and beginning to prepare our workforce for what that future looks 1003 like 1004 It doesn't mean the heavy hand of government but it also means 1005 let's consolidate some of these programs we have and try to 1006 incorporate a vision which some of our competitors 1007 unfortunately do all too well 1008 I want to thank the chairman for yielding and I want to thank 1009 you call for being here I am excited I have two companies 1010 represented here that have a strong presence in Illinois -- Zebra 1011 and Owens-Illinois 1012 Zebra is based in Lincolnshire Illinois which you know 1013 now that the economy is expanding maybe you can build one in my 1014 district too because there's no -- there's no presence there yet 1015 But we'll take it in Illinois 1016 And Owens-Illinois of course does have a strong presence 1017 in Illinois 1018 but we can talk about that too 1019 Somehow they're headquartered in Mr Latta's state And as Mr Masney said there's an OI facility right in NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 55 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1020 Streeter Illinois and in my district 1021 there 1022 years ago and have been very impressed by what I've seen 1023 You provide good-paying jobs So proud to have you I was able to visit a few I would like to ask the panel talking about the development 1024 of IOT does that mean that American workers will require new 1025 training and what are companies doing to obtained a skilled 1026 workforce 1027 1028 1029 1030 I would like one or two of your to answer that with your perspectives Mr Bianculli Sure So yes absolutely happy to have our presence in Lincolnshire and we should talk later 1031 Mr Kinzinger Yes 1032 Mr Bianculli So yes with regard to that worker training 1033 -- I think the future we are talking about here isn't going to 1034 arrive evenly right 1035 We are going to see certain areas We are already seeing 1036 IOT drive location technology being used to control drones in site 1037 facilities to be able to -- in manufacturing plants actually 1038 to be able to detect inventory in a more automated fashion 1039 1040 The ability to have robots deployed in a distribution or fulfilment center -- but what's happening in those environments NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 56 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1041 today is -- let me take the robot example where goods now are 1042 bringing -- taken to the picker 1043 of the day is doing that picking for those online orders to fulfil 1044 those orders and the goods are being brought to them instead of 1045 them walking to the goods 1046 And what does that mean If you have a human at the end There's no job taken away 1047 There's just several less miles a day that that worker is going 1048 to walk 1049 can do 1050 That means there's many more picks per hour that worker And so we are in a world now and will be for some time where 1051 humans and machines and automation whether it be physical 1052 automation or it be 1053 worker basically a artificial intelligence augmenting the digital assistant -- 1054 Mr Kinzinger And I just want to add onto that 1055 If you look at the example for instance around Europe the 1056 Germans are very good at manufacturing 1057 unemployment rate 1058 future technology 1059 They have a very low But they are also embracing this kind of So we don't have to be scared of the future because it's 1060 coming We just have to figure out how to lead and innovate in 1061 that process NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 57 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1062 Let me -- I will go on Mr Poonen when you talk about the 1063 internet of things does that create new concerns when it comes 1064 to intellectual property 1065 For instance does the data collected in IOT manufacturing 1066 reveal anything proprietary that companies might want to protect 1067 Mr Poonen Yes sir 1068 I think that one of the things you have to first remember 1069 is that the first wave of IOTs being able to take away mundane 1070 tasks and make them something that could actually be done more 1071 autonomously I will give a very simple example 1072 You don't want to watch me parallel park a car I am terrible 1073 at it 1074 human because it's a combination of cameras and geometry and 1075 it'll probably parallel park better than you 1076 That's a perfect job for a machine to do better than a But my value add long term isn't parallel parking So what 1077 we want to be able to do as the next wave of economy shows up is 1078 to ensure that you have got the appropriate privacy and security 1079 baked into many of the machines 1080 work of security being focused on the devices and what's on there 1081 and we have to make sure that there's standards also because the 1082 same type of privacy that applies to peoples home people are And there's a whole dedicated NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 58 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1083 worried as to whether or Alexa or Siri is always listening to you 1084 Those are the types of things that standards need to be applied 1085 both from the government and industry working together and I 1086 believe that this is absolutely solvable in the same say that the 1087 industry and government work together on standards like common 1088 criteria 1089 1090 1091 This will be applied to the new world of IOT in the coming years we believe Mr Kinzinger And Mr Masney what's the trend when it 1092 comes to the cost of deploying IOT 1093 the entire manufacturing process from the procurement of raw 1094 materials to the delivery of the finished project is 100 percent 1095 automated without human intervention 1096 Mr Masney Can you envision a day when No I can't envision a day like that It still 1097 takes human beings on the manufacturing floor to make things 1098 happen and make sure things are moving forward 1099 I will share with you in Streeter Illinois it is one of 1100 our facilities where we will be -- we are delivering what we call 1101 the factory of the future for the organization and invite you to 1102 come see that at some time that make sense 1103 But certainly we are still going to need the capability NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 59 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1104 to have people on the floor that can run machines be ever present 1105 make sure things are running safely that productivity continues 1106 to move forward 1107 Our innovations are around more flexibility and making sure 1108 that we can be more responsive to our customer base 1109 another area where we think -- we think we can do that as well 1110 1111 1112 1113 1114 Mr Kinzinger And IOT is Thank you all for being here and I yield back Mr Latta The gentleman yields back and the chair now recognizes the gentlelady from California for five minutes Ms Matsui Thank you very much Mr Chairman I want to 1115 thank the witness panel 1116 what's going on now and what the possibilities are too in the 1117 future 1118 This is absolutely fascinating to know Digitally connected supply chains have the potential to be 1119 an important component of the industrial internet of things 1120 Just in time manufacturing promises to drive down the need for 1121 storing excess inventory and allow suppliers to anticipate and 1122 deliver the materials manufacturers will need more quickly 1123 1124 Decentralized ledger technologies like block train can make supply chain transactions faster and cheaper by securely NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 60 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1125 connecting manufacturers and suppliers in real time 1126 I would like to hear from Mr Poonen and Mr Kurfess what 1127 are your thoughts on technology such as block chain and others 1128 and its ability to play a role in IIOT manufacturing and security 1129 Mr Kurfess Sure So that's a -- it's a great set of 1130 questions and the reality is the distributed capability whether 1131 it's block chain you know or any of these other distributed 1132 capabilities 1133 These are going to be critical in terms of moving things 1134 forward 1135 supplier that supplies me with parts and if I say tomorrow oh 1136 I need -- you know I was at Toyota -- how is it going there this 1137 was in Kentucky and they said well great you know -- you know 1138 we've got you know very you know every six hours we can get 1139 you know parts from Denso and so forth -- we are very lean 1140 have you know very small inventory 1141 that working for you 1142 months of supply back there because we don't know what they're 1143 going to -- you know what they're going to ask us 1144 1145 You know if I've got a supplier you know only one We You go to Denso -- how is Well we've got you know two or three Now they're starting to figure out how they're going to ask together But imagine if instead of one big company Denso NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 61 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1146 right we had a bunch of smaller companies right that could 1147 supply this 1148 So yeah if I need 500 parts right as opposed to having 1149 one company say can you make 500 parts I could go to you know 1150 a hundred companies local companies mom and pop shops and say 1151 I need five parts or how many can you supply -- five ten 1152 And all of a sudden you can -- you can bring that together 1153 You not only can get those parts there -- and by the way you could 1154 use something like an Uber to make a delivery right 1155 but and so the infrastructure -- again back to the 1156 infrastructure it's there to pull it off right 1157 1158 You know But now you also have a very resilient supply chain If one goes down you don't have to worry about it 1159 Turning that around as well on the educational side you can 1160 take at what are these guys doing and you know where do they 1161 need more training and let's get them that training 1162 We could even percolate that down into our colleges and into 1163 our high school levels so we can deliver the education to the 1164 workforce and we can even start to send the right students in the 1165 right direction to really engage them 1166 So lots of stuff Distributed you know all the way from NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 62 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1167 supply chain -- supply chain of parts but supply chain of our 1168 workforce as well Thank you 1169 Ms Matsui 1170 Mr Poonen 1171 Mr Poonen 1172 important topic 1173 now about Bitcoin and block chain 1174 1175 That's great Yes Thank you I think Congresswoman this is a very There's a lot of speculation and euphoria right I think the bigger story is the fact that this notion of a subledger which is really what block chain about -- 1176 Ms Matsui 1177 Mr Poonen Yes -- really transforms the way in which you do 1178 commerce at a much more miniature level and if you think about 1179 IOT it's sort of a miniaturization of this type of device 1180 Now you take -- combine that with commerce now becoming even 1181 more miniature it has profound implications that could be 1182 enormously positive and that's really we think the big story 1183 If there are ways by which manufacturing could get smarter 1184 and even potentially more secure and the commerce that happens 1185 -- electronic data interchange -- all of this would become a lot 1186 more efficient and potentially also secure because it's now 1187 distributed as opposed to one choke point -- distributed actions NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 63 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1188 have lots of inherent ways in which you can actually make the 1189 system a lot more secure 1190 At the same time it does require us to take security and 1191 privacy even more importantly because of this distributed nature 1192 and that's something we are beginning to do early research on 1193 not just from industry perspective but also in academia 1194 But I am confident that the positive aspects if you take 1195 away the speculative aspects of block chain the positive aspects 1196 will have a profound implication that's actually -- and we need 1197 to as a country be at the forefront of the research 1198 do it some of the other countries in the world are 1199 Ms Matsui Oh good 1200 That was very interesting If we don't Well I thank you very much Let me go on to something 1201 quickly The Clean Energy Smart Manufacturing Innovation 1202 Institute in California has been working to accelerate smart 1203 manufacturing throughout the country 1204 Broad collaboration on integrated tools and systems that are 1205 driving smart manufacturing will help reduce the cost of deploying 1206 these technologies 1207 1208 These partnerships and collaborations can also facilitate the interoperability of devices and standards NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 64 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1209 Mr Kurfess how can government and industry partnerships 1210 help develop tools and practices that will drive smart 1211 manufacturing adoption 1212 Mr Kurfess 1213 You know I think we've already heard about things like -- 1214 Ms Matsui 1215 Mr Kurfess 1216 standards and so forth 1217 That's a great question Yes Go ahead Oh I am sorry Have heard about things like But really to help move this forward You know the difficulty is again you get back to the 1218 distribution You know different people want different you 1219 know standards and different capabilities and so forth 1220 When you start to bring these entities together so you know 1221 the smart manufacturing team that's I think centered in the Los 1222 Angeles area they're actually -- and it's not only the big 1223 companies but it's also the so-called small and medium sized 1224 enterprises -- the SMEs -- that they're bringing together 1225 they're really bringing everybody together to say yeah how does 1226 this move forward -- how do we do this 1227 And what a So lot of companies are getting is yes I need to 1228 release this because to become more productive more capable 1229 right I need to participate in this standard NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 65 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1230 It's like when I turn my -- you know when I turn my laptop 1231 on the wifi I know I am going to be online 1232 and that's really where we need to be going with manufacturing 1233 And by the way we need to do it -- we see our you know 1234 competition overseas doing it in a big way 1235 to be cognizant of that So you know we got 1236 Thank you 1237 Ms Matsui 1238 I know I ran out of time but thank you 1239 Yield back 1240 Mr Latta 1241 1242 1243 1244 Well thank you That's a standard This is all very interesting Thank you very much The gentlelady yields back The chair now recognizes the gentleman from Kentucky for five minutes Mr Guthrie Thank you very much I appreciate this My 1245 background before I got here was in manufacturing and it wasn't 1246 very long ago that somebody from Ford Motor Company would make 1247 an order from a supplier -- my family was a supplier -- you would 1248 have a production meeting where they'd say We need a thousand 1249 of these parts 1250 A guy would walk out to the plant to look around and with NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 66 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1251 the clipboard -- or lady -- and say Okay we got this much here 1252 this much there 1253 we have there because you couldn't always depend on the counts 1254 So then they would call the buyer at our place and say I need 1255 X amount So they would walk out on the floor and say How many 1256 do I have and with the clipboard and it would -- it would -- 1257 this whole string of things Let's go to the shipping dock See how much 1258 And if you go to an assembly plant and invite anybody from 1259 Bowling Green Kentucky to go the Corvette plant and see one of 1260 America's great cars made well what you look for is how 1261 phenomenal all of this stuff just comes together and how much 1262 effort and time and planning 1263 So if you do it now you get a production manager who says 1264 I need a thousand parts somebody uploads it on the internet 1265 the supplier comes in the morning downloads it everything is 1266 bar coded -- I assume Zebra -- but everything is bar coded so you 1267 can depend on the counts and all of a sudden it makes a work order 1268 When you ship it you bar code it 1269 a purchase order so you get paid for it and that's distributed 1270 through the internet or through the transfers -- not necessarily 1271 through checks like you used to have to open checks and move When it goes out it creates NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 67 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1272 1273 forward And that's happened in the last -- since I've been in 1274 manufacturing 1275 a phenomenal look forward 1276 It wasn't that long ago I started And it's just But I wasn't thinking -- I was looking at Mr Poonen's 1277 testimony and looking at Dr Kurfess' here my son went to Georgia 1278 Tech so we appreciate having you here today 1279 But I was looking at this security and cybersecurity because 1280 we think about data security and whether your credit card was 1281 secure 1282 really if you put everything online and everything is internet 1283 of things in your manufacturing facility is there a cyber attack 1284 could that shut down an assembly plant 1285 You had all these retailers come in and talk about -- So in your testimony you talked about the importance of 1286 systems like internet of things gateways and why -- you talk 1287 about securing the production lines and not necessarily I don't 1288 think it's just from attack you were talking about 1289 if you could throw that in as well and the importance of cyber 1290 hygiene and can you describe how this would provide a reasonable 1291 level of security 1292 Mr Poonen But just Happy to and I think the focus on security is NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 68 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1293 a very good one and I think just the same way that if you thought 1294 about various different eras of computing sir -- mainframe the 1295 client server to mobile cloud -- this notion of security has 1296 become a more and more profound 1297 that's true even though security is getting a lot of spending 1298 in software the bad guys -- there's more attacks than there's 1299 actually investment even in security companies because if there's one thing 1300 So we have got to take this seriously and the good news is 1301 that countries like the United States and Israel have been on the 1302 forefront of security spending 1303 We want to take that serious So the way in which we think about IOT is as these devices 1304 get miniature first off you want to make sure the operating 1305 system that's on those devices are as secure as possible and I 1306 think we've learned a lot as the new operating systems that are 1307 post-PC have gotten more mature and with every generation they're 1308 getting better and better 1309 iPhone being more secure than the first examples of the PC and 1310 those will play down to the miniature devices 1311 IOS is a good example of that and the Secondly you want to have control points that dislocate just 1312 these devices into what's called a gateway So gateway is just 1313 a consolidated form of many of these so that you have one place NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 69 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1314 rather than multiple places where much of it gets consolidated 1315 Dell manufacturers some of those gateways 1316 those are secure You got to make sure 1317 And then as they talk to other systems for example a data 1318 center or a cloud that connection needs to be secure and there's 1319 techniques like micro segmentation ways in which you 1320 authenticate into those systems using multi factor 1321 authentication 1322 1323 1324 These are all technical terms but for the folks who are savvy in security we are educating more and more of them And then finally for the common person as I described 1325 earlier you want to be able to educate them on some very basic 1326 principles of cyber hygiene especially as it relates to their 1327 access of systems 1328 Having a two-factor authentication is something that 1329 everybody should know about It's not just your user name but 1330 some other factor 1331 mother's maiden name 1332 that and are refreshing 1333 your consumer accounts will get hacked the same way that the 1334 enterprise is dealing with it Maybe it's your birth date Maybe it's your And setting up your system so that you have That allows less possibilities that NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 70 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1335 These are just a few of the many principles of cyber security 1336 written in the white paper about this and it's a topic that both 1337 -- all of us in the industry -- there shouldn't be competing 1338 agendas here 1339 of the IOT systems 1340 We need to work together to make sure the security Mr Guthrie A quick question I appreciate Mr Masney 1341 He was talking about glass and going from 91 to 93 percent 1342 am aluminum foundry die casting and as you said it's sometimes 1343 more of a art than science and I remember saying that in a meeting 1344 and a guy goes Well all scientists were art at one time and 1345 how do you perfect it 1346 So I only have a few seconds I But I just -- when these first 1347 come out a whole industry is created and everybody is buying these 1348 All of a sudden you get saturation and sustainable and 1349 improvement 1350 Valley all over America to go in and redo these plants redo 1351 these facilities But there's a whole world of people in Silicon 1352 And I don't have much time left but anybody want to talk 1353 about just what transformation and what economy that could create 1354 by people going through and refurbishing their plants 1355 Mr Kurfess I will just really quickly fire it off because NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 71 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1356 we see it across the board 1357 companies 1358 We work with a lot of different You know the opportunity is tremendous You know whether 1359 the small or the medium or the large companies because again 1360 you know the kids now they program these things you know and 1361 so they're in there hey look at -- we can do this 1362 readers -- oh you don't need -- I mean this is the bar code 1363 readers now and so forth 1364 And so is it does allow you to you know to do these types of 1365 implementations 1366 Bar code And so they're really implementing it But back to Mr Poonen's point you know we've got to make 1367 sure that we are very secure about this 1368 in our classes whether it's high school or junior college 1369 whatever you know we now see that a lot of this type of thing 1370 we are just doing good hygiene 1371 into you know just any old computer 1372 Million-dollar machine tool recharging my phone which could have 1373 a virus on it 1374 So you know and again For example do not plug this I go to a machine shop And so these are the types of things that we really have to 1375 start teaching them and stuff 1376 tremendous But the opportunity is NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 72 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1377 Mr Guthrie 1378 Mr Bianculli 1379 1380 Thank you Thank you for indulging us Representative Guthrie one other point if I may There's a whole suite of capabilities I was starting to bring 1381 to these enterprise devices 1382 But the idea is taking a standard operating system that we might 1383 be using Android by way of example and layering a whole host of 1384 enterprise-centric security on top 1385 We actually called it mobility DNA So and we are working closely actually with VMWare on this 1386 sort of thing 1387 are deployed in these manufacturing facilities being able to make 1388 it secure all the way up the device level so we have a network 1389 of secure devices instead of just trying to secure the network 1390 and that's an investment we are making to basically serve 1391 enterprise in a more secure way than we might find in traditional 1392 consumer devices 1393 So as these devices -- these internet end points That and the last thing -- another word silos I think 1394 there's tremendous opportunity to bring silos down across what 1395 many of my colleague here spoke about -- from farm to fork if 1396 you will 1397 So for being able to share data from you know where that NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 73 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1398 seed was planted in the farm field and be able to carry that data 1399 all the way through to optimize the harvest out to the 1400 transportation carriers for just-in-time delivery and then 1401 ultimately getting to a retail location where we can all enjoy 1402 that in a much more efficient way and in a way that allows us to 1403 in a more cost effective way to reach more people 1404 So I think the data silo opportunity is tremendous as we start 1405 to collect more and more data across all the different elements 1406 of the supply chain 1407 Thank you 1408 Mr Guthrie 1409 Thank you very much I appreciate the indulgence 1410 Mr Latta 1411 The gentleman from Pennsylvania is recognized for five 1412 Thank you minutes 1413 Mr Costello Thank you Mr Chair 1414 Dr Kurfess I wanted to focus on something that you had 1415 provided in your written testimony not just ask you but ask the 1416 rest of the panel for their feedback as well 1417 There's no doubt IOT in manufacturing will help to grow our 1418 manufacturing operations and will generate new and higher-paying NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 74 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1419 1420 jobs However those jobs will be filled by individuals that are 1421 highly trained 1422 continuously trained and that's what I want to focus on 1423 In Furthermore those individuals will need to be the latest and state-of-the-art technologies to keep 1424 U S manufacturing operations at the forefront of this rapidly 1425 advancing technology wave thus a culture of lifelong learning 1426 must be instilled and supported in our workforce 1427 If you look at our high schools and STEM schools and trade 1428 schools for 18 to 19 year olds I am struck by the opportunities 1429 that might be available to incorporate more of this lifelong 1430 learning culture into curriculum at an earlier age so that it is 1431 not incumbent upon a company in order to do that 1432 And when you look at company of 20 30 people even startups 1433 of two or three individuals it's just simply not sustainable to 1434 offer that type of learning and sort of up-to-date type education 1435 that's required in order to keep a well-trained workforce 1436 I've already spoken too long Share with me what you think 1437 the right kind of learning platforms are in order for our country 1438 to be a leader for the next 20 and 30 years so that these are not 1439 jobs that are not remaining in the U S NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 75 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1440 Mr Kurfess Sure So really quickly you know the first 1441 thing is I mean I can tell you we have turbine blade production 1442 We do a lot of work in turbine blade production 1443 turbine blade production machines 1444 forth 1445 So we have We are doing research and so And typically you need about 15 20 years of experience 1446 before we turn you loose on those in you know production 1447 operations 1448 We have developed gaming interfaces -- high-performance 1449 computing that can really -- you know it just pounds that problem 1450 to dust and there are gaming interfaces and we have high school 1451 kids who are now programming you know these types of machines 1452 and so forth 1453 So it's a whole different way of learning and as I mentioned 1454 before we can even take a look at you know who is you know 1455 really excelling 1456 1457 People think oh engineering -- I've got to be a super genius Well you have to be fairly good at math and so forth 1458 But if we can start to really identify those students early 1459 on and start to work them forward -- they don't necessarily have 1460 to go in to engineering Maybe they're going to go into the shops NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 76 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1461 1462 and so forth and get the right type of training But it's a two-way street So the infrastructure is coming 1463 into place 1464 again you look at Manufacturing USA these centers that are 1465 working with the local and particularly the community colleges 1466 the Associates degrees and so forth we are -- they are saying 1467 yes what is the next generation that we need to be moving forward 1468 and let's work that into the curriculum 1469 We have a number of these different -- you know if And that's not only for the two-year degrees but for the 1470 continuous learning 1471 professional societies that they have a lot of curriculum 1472 development that's deployable whether it's on the web or 1473 interactive and so forth 1474 And then we also see a lot of the So a lot of the technology is moving out But I agree you 1475 have got to build it in 1476 job with life long learning 1477 that down into the K through 12 1478 it's there I think the access for those students and for that 1479 work force is available and it also does respond very quickly to 1480 the needs of the workforce and the needs of the market 1481 Mr Costello Universities I think have done a good Right We now have to start to propagate It's getting there but once Mr Poonen NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 77 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1482 1483 1484 Mr Poonen I would just briefly add this topic is personally very much a topic of passion for me sir I came to this country as an immigrant I am now a U S 1485 citizen partly because the United States has the best 1486 universities 1487 College 1488 School and I hope that this continues to be the country with the 1489 best education in the world 1490 I studied my computer science at Dartmouth I did my MBA at Harvard University at Harvard Business The education has now changed Today my kids who live in 1491 Los Altos California are learning through Khan Academy 1492 YouTube has completely transformed education and it's not just 1493 for kids 1494 You can get a how-to or learn-to anywhere anyplace in 15- 1495 20-minute Ted Talk types of videos and we encourage our workers 1496 to constantly be in that learning mode and the good news is the 1497 internet makes that possible 1498 And it's almost like you know upending the classroom where 1499 learning is happening at home in the evenings and the classroom 1500 becomes a discussion form 1501 doing 1502 That's the new fashion of what we're I think the other part that is incumbent on all of us as NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 78 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1503 leaders is to mentor others 1504 got to give back to the next generation 1505 -- I know many of our colleagues here do the same -- it's our job 1506 to mentor the next generation 1507 combination of STEM and mentoring will make the next generation 1508 ready 1509 1510 Mr Costello As much has been given to us we've I encourage all of us As we do that both the That's interesting So it might be technology that enables us to teach technology 1511 Mr Poonen Exactly sir 1512 Mr Costello 1513 Mr Masney That's what we hope Anyone else From a manufacturing company perspective we 1514 are investing in our local high schools and STEM programs to help 1515 the younger generation get interested in science and technology 1516 We are also working with local universities to make sure 1517 there's an interest as well 1518 helping workers obviously continuous learning -- lifelong 1519 learning -- there's also an aspect of company helping our 1520 employees be lifetime employable through those kinds of ideas as 1521 well 1522 Mr Costello 1523 Mr Latta So you know I personally believe I appreciate your feedback I yield back Gentleman yields back NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 79 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1524 1525 The gentleman from South Carolina is recognized for five minutes 1526 Mr Duncan Thank you Mr Chairman 1527 Siri hey Siri I use that as an example in that these 1528 devices are always listening right 1529 in your home or some similar device whether manufacturing has 1530 those devices that as you say are all interconnected or whether 1531 you as an individual have a smart TV and internet rumors true 1532 or not that that TV is spying on you and sharing that information 1533 As we move forward with technology and we have a refrigerator 1534 that notices that my milk is low and asks me if I want to order 1535 milk and I do sends a signal to the grocery store -- milk bread 1536 other things I may need delivered to my home by a autonomous 1537 vehicle right 1538 Whether you have an Echo So I consider myself a conservative There's nobody in this 1539 room that would say I am not a conservative But I would actually 1540 take it another step further 1541 have a libertarian streak in me that it's my information and I 1542 own it 1543 controls that data and who owns that data and at some point it's 1544 the government getting that data and what do they do with it I am a conservatarian in that I But in this scenario that I laid out who actually NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 80 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1545 Now data sharing and by buying habits and what Amazon is 1546 sending me through emails or pop-ups that because they watch my 1547 buying habits and they're recommending certain things that 1548 benefits me I get all that 1549 But I can tell you the constituents in the 3rd District of 1550 South Carolina are concerned about who has that information what 1551 they're doing with it and ultimately does it get in the 1552 government's hands without any sort of 4th Amendment protection 1553 so to speak 1554 So I would just love to -- I know Mr Poonen you were talking 1555 about some of that earlier I would just like to expound on that 1556 Who owns that data and how can I assure my constituents that that 1557 data is not going to be used wrongly 1558 And then I would also like to get back out on that tangent 1559 because you have got proprietary information and corporations 1560 and we all know that China got the plans for the F-35 1561 China has gotten plans for a lot of the military components 1562 with the best safeguards of cybersecurity in place by our 1563 government right who has access to all of you all to create those 1564 platforms for security 1565 So I would like to talk about not only individual privacy NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 81 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1566 and data ownership but also how do we keep China from -- or a 1567 Chinese company and I am not just singling China out but from 1568 going to BMW or Magna or some sort of manufacturer in the 3rd 1569 District and getting proprietary information as well and creating 1570 a competing product 1571 Mr Poonen 1572 1573 Yes Very briefly and then allow time for my other colleagues too This is a very hard topic I would be smug if I said we have 1574 all the answers today 1575 innovation and collaboration with the government 1576 1577 1578 This is going to require continued I would say there's a family of problems that are related to predictive maintenance of machines that are positive For example if the refrigerator or the washing machine is 1579 about to you know kind of you know decrepit and you need 1580 someone to come and help you in that that's a family of problems 1581 -- that people are probably less concerned 1582 machine probably needs to be encrypted 1583 The data on that But as soon as you have things that are voice recognition 1584 camera related privacy concerns and we encourage consumers 1585 certainly enterprises also to be extremely cautious 1586 You can turn the camera off on your TV You can certainly NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 82 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1587 unplug Alexa when you need to and get appropriate cautions on how 1588 you handle these consumer devices 1589 1590 1591 Mr Duncan But that smart TV is monitoring all of your viewing habits Mr Poonen Exactly So this is going to be one of those 1592 places where a combination of encryption a combination of 1593 technologies and I am with you 1594 owns that data 1595 -- most of our focus has been on the enterprise use of this 1596 the consumer part of it is a huge problem that needs to be solved 1597 together and there's no easy answer for much of this because we 1598 are just beginning to scratch the surface of many of the topics 1599 that are way out there 1600 Mr Duncan Consumer privacy -- the consumer The way in which they interact with enterprises But In the essence of time we know China took the 1601 plans for the F-35 so to speak and government was involved 1602 do private industry -- how can they have some assurance that their 1603 proprietary information is sheltered from their competitors 1604 Mr Poonen How We are seeing the shift from assuming that we 1605 can prevent an enemy if you will from getting in to being able 1606 to detect that as quickly as possible 1607 So if you think about what is your mitigation plan if you NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 83 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1608 assume a thesis of you'll prevent attack from occurring you have 1609 a very different outcome in that strategy and that plan that if 1610 you assume that you will not be able to prevent an attack and so 1611 now your strategy is going to be to detect that as quickly as 1612 possible to shut down that intrusion and then to take the 1613 corrective actions from that point forward but detecting that as 1614 soon as possible 1615 So going from protecting to detecting and then taking a 1616 counter measure as quickly as possible in every sense of that word 1617 I think is a shift we are seeing right now 1618 you pointed out the best resources on the planet in some instances 1619 cannot protect that attack from occurring 1620 on leveraging all the technologies spoken about here -- machine 1621 learning artificial intelligence technologies like deep packet 1622 inspection over packets on the network to be able to detect that 1623 if that is occurring 1624 It's no longer as So let's focus more With regard to in-home I think similarly we are going to 1625 see -- technology has been used for a while in the network space 1626 called deep packet inspection where why not have a single source 1627 of truth of the information that's leaving my home 1628 So what products are sharing what information with whom and NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 84 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1629 imagine if I had a dashboard that I could go to a portal on a web 1630 page in my home and I could see well I shut that TV -- I don't 1631 what that camera on that TV sharing information 1632 data going out over my network or not and those kind of dashboards 1633 so that we can have -- enjoy all of us the convenience associated 1634 with sharing the information but have the integrity and single 1635 source of truth to understand what actually is being shared and 1636 I you know agree with the number of devices and the prolific 1637 nature of this that thinking that we are going to be able to control 1638 that because we were told it works a certain way is not going to 1639 be sufficient 1640 Mr Duncan Is in fact that I guess my constituents would say is Big 1641 Brother going to call me or send me a notice and say that your 1642 thermostat was set on 72 when you left the house today and you 1643 have over utilized your allotment of electricity for the day 1644 you see what I am saying 1645 Mr Poonen 1646 Simultaneous speaking 1647 Mr Duncan 1648 Mr Poonen 1649 Do I do -- - be going and that's a true concern I think the best answer to that is to use all the mechanisms I just mentioned and more to come to ensure that NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 85 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1650 that's your option -- that you're informed enough to -- it's your 1651 choice to share that information for a benefit gained 1652 1653 Mr Duncan I am way over time Mr Chairman Thanks for leniency 1654 Mr Latta 1655 The chair now recognizes the gentleman from Texas for five 1656 minutes 1657 Mr Green 1658 for being here 1659 1660 Thank you very much Thank you Mr Chairman I thank our witnesses Sorry we have other committees -- the Energy Committee upstairs and so I am jumping back and forth 1661 When I first saw the hearing and that's why I appreciate 1662 this subcommittee -- the internet of things -- I thought what 1663 in the devil is the internet of things 1664 after the president didn't 1665 But what is it I cleaned up my speech And thank goodness I have young staff to 1666 explain to me 1667 makes some of us who don't typically live with these things shed 1668 light on different aspects of the smart manufacturing and the 1669 internet of things 1670 I am glad you're having the hearing because it One of our witnesses mentioned manufacturing as one of the NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 86 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1671 sectors that is investing the most in IOT I have a district 1672 that's predominantly petrochemical refineries chemical plants 1673 extraction and I know they're looking for every way they can using 1674 technology to both to produce their product safely or cleaner and 1675 doing more smart manufacturing can make operations both 1676 environmental safer and more efficient 1677 do more to prepare our workforce for those changing needs and 1678 manufacturers But Congress needs to 1679 Mr Kurfess you mentioned in your testimony importance of 1680 instilling a culture of lifelong learning and of helping to train 1681 our manufacturing workforce in the data science and IT skills that 1682 workers need 1683 the unemployed and one of the biggest obstacles they face getting 1684 into that technical training is the cost of it Some people that need job training the most are 1685 Can you elaborate on possible ways Congress can help this 1686 technical training be made more affordable as well as help support 1687 a culture of lifelong learning broadly 1688 1689 1690 1691 Mr Kurfess Sure I would be very happy to do that Congressman You know in terms of -- I know that there are a lot of initiatives that are really supporting the community colleges NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 87 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1692 These are the two-year colleges and so forth 1693 effective for the training of the workforce and so forth and 1694 there's a lot of leveraging that goes on there 1695 They're very cost We heard about some of the online courses you know that 1696 are available today even via YouTube and so forth 1697 our -- at least our younger generation they learn and they think 1698 in a different way right 1699 And actually So you know when I was a student I might have had one book 1700 to look at or maybe two books to look at 1701 and they get 1702 forth Now they go out there you know 10 20 30 different examples and so 1703 So really not only just saying yes you know we could make 1704 sure that we can you know support the community colleges and 1705 some of the professional societies that have you know these 1706 types of course offering technical training offering but also the 1707 ability to basically say yeah let's make sure that we are starting 1708 to leverage some of these new approaches to teaching and so forth 1709 and that we understand that they're out there so that it comes 1710 out there very quickly 1711 1712 And by the way these are also very important not just because they're lower cost but they're very nimble They can respond NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 88 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1713 quickly to new technology as it comes along 1714 So you know if you have some YouTube videos out there -- 1715 I mean you can -- you know you can you know learn anything 1716 from fixing you know a faucet you know all the way to you 1717 know hey let's go do a calculus problem right 1718 But as new technology comes along I mean it's amazing 1719 right 1720 these different courses even -- even you know MOOCs these 1721 massively online courses and so forth that some institutions offer 1722 for free right 1723 -- once you have that I think the next key thing is certification 1724 Yes you are certified in that course 1725 your company -- and by the way it's interesting when I think 1726 of -- people think manufacturing make a car 1727 chemical plants are enormous manufacturers within the United 1728 States 1729 You can go off go to You Tube You can go to some of And so how do we promote that how do we then So that when they go to Those petro And so how do we know right when that company says yeah 1730 I want to hire somebody that yeah this person has the right 1731 credentials 1732 a Georgia Tech but what about just some of the smaller credentials 1733 that are going along It's great that they have a degree from let's say So a lot of that credentialing and getting NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 89 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1734 back to some of the standards that we are looking at 1735 Mr Green Well I appreciate that 1736 I actually have a community college in our area who partners 1737 with the petro chemical industry -- San Jacinto College in east 1738 Harris County Lee College in Baytown because of the dominance 1739 of that industry and I've been out there and they're doing -- 1740 and a number of my other community colleges in our area developing 1741 the same thing because you just don't go get your Associate's or 1742 your Bachelor's or anything 1743 what's new and I was there on campus one time and the -- a young 1744 man had about three different certifications and he was getting 1745 offers of over $150 000 at a Shell refinery or a LyondellBasell 1746 refinery or chemical plants You need to continue to look at 1747 So it's a way that someone -- but you have to continue to 1748 keep up with your industry and that's what community colleges can 1749 do 1750 So I appreciate -- Mr Chairman thank you for the time 1751 Mr Latta 1752 back 1753 five minutes 1754 Well thank you very much The gentleman yields The chair now recognizes the gentleman from Indiana for Mr Bucshon Thank you Mr Chairman NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 90 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1755 Mr Poonen I am going to primarily talk with you and some 1756 of the other about security Mostly it seems to me when we're 1757 talking about security we are talking about software and other 1758 -- and access and things like that -- passwords and all of that 1759 But you probably saw in the news recently that in some areas 1760 across the country there were some communities and police 1761 departments that took down their security cameras because of 1762 concerns of where that products was made and it was made overseas 1763 and so there was some question not about that it was connected 1764 to the internet but the actual hardware itself and whether that 1765 was compromised 1766 What are we doing -- and I know -- there's some things I know 1767 that we do at the federal government level to ensure for example 1768 that chips that are used in Defense Department products are not 1769 compromised so to speak but worldwide and even in the U S some 1770 people estimate as many as 10 to 15 percent of computer -- the 1771 hardware like the silicon chips are actually counterfeit 1772 1773 What -- that's an area I think we should also look at What are we doing there 1774 Mr Poonen I think it's absolutely wise sir 1775 I think that when you think about security it absolutely is NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 91 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1776 in all of those layers You need a multi layered whether it's 1777 the hardware or the software whether it was the service was the 1778 people 1779 And listen capitalism works only if the entire world is a 1780 level playing field and when some countries are not necessarily 1781 playing by that I think it's absolutely the wise policy whether 1782 it's the FBI whether it's the appropriate agencies to ensure 1783 that our products whether they're bought for a foreign party 1784 don't have embedded components hardware or others that could 1785 potentially compromise the security 1786 Mr Bucshon So -- I can tell you probably know and I know this 1787 myself sometimes it takes an electron microscope and people that 1788 understand it to detect these problems with just -- with chips 1789 and stuff 1790 Mr Poonen 1791 Mr Bucshon 1792 Mr Poonen Yes absolutely I mean it's pretty sophisticated Yes and that -- there's absolutely that -- 1793 evidence of that happening I think the appropriate scrutiny -- 1794 I am not a protectionist in terms of the way in which we think 1795 about the economy 1796 be one with a level playing field We do believe in free market But it has to NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 92 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1797 So many of the governments that have been focused on this 1798 certainly in the United States and Israel that have had this have 1799 got a very good way of looking at the ways in which many foreign 1800 governments are building technologies and without naming certain 1801 countries we've got to continue that diligence because whether 1802 it's the camera technology whether it's voice recognition the 1803 types of things that could leave us vulnerable we've got to make 1804 sure we've got the most protection 1805 closely both the industry and the government the agencies it 1806 ensure that happens 1807 about 1808 security 1809 entire topic of IOT that needs even more and more focus 1810 That's probably a topic we haven't talked I am very glad that this committee is focusing a lot on Security is probably one of the key topics in this Mr Bucshon Yes because you know I mean it is a global 1811 marketplace and I am in favor of that 1812 also 1813 We fully -- we work very I am a free market person I think we all are But we also from our jobs' perspective as members of 1814 congress we have consider national security-related risks and 1815 portals of entry into our -- that can -- you know and the biggest 1816 portal of entry -- port of entry that we have is our -- is our 1817 people using connected devices maybe even at their homes right NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 93 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1818 For example say someone works -- I will just -- say they 1819 work at the NSA and they deal with classified material every day 1820 that we don't want people to know about 1821 they have all their devices at home are all connected and who knows 1822 who's listening But when they go home 1823 And you know and even though they're not supposed to -- 1824 you know what if they're just you know pontificating among even 1825 themselves about the day's activities I mean it's hard to know 1826 So I have pretty significant concerns about on the hardware 1827 side I mean about -- because once we are able to mitigate other 1828 things people are smart 1829 already too late when the hardware itself is compromised 1830 that make any sense 1831 Mr Bianculli Yeah They're going to be one step -- you're Does I am just going to add it absolutely 1832 does make sense Congressman 1833 suggest we could break the problem down to two components 1834 If I could add -- if I could One is around the counterfeit side of things So these are 1835 counterfeit chips or you know that are made overseas copying 1836 our technology and as you pointed out you need somebody with 1837 sophisticated technology to check that 1838 But what I would say is that actually IOT is a mechanism for NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 94 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1839 auditing that because if I am 1840 today if I'm a manufacturer -- a semiconductor manufacturer of 1841 those chips I can have each one of those chips report back when 1842 they connect as a -- just a basically a heart -- a pulse to say 1843 that that device is present and if I see that coming from more 1844 devices than I have shipped I've got an indicator that there's 1845 an alternate end around from a supply chain perspective 1846 else is putting -- injecting if you will these chips into the 1847 supply chain that aren't coming from my factory 1848 -- - I mean we're seeing this occur Someone So it's sort of an IOT connected auditing mechanism I think 1849 that represents one level of -- certainly compromises economics 1850 but is a little bit lower on the threat level compared to as you 1851 were suggesting information that's being sent -- that's actually 1852 being captured we don't know it -- the example you gave around 1853 the device in the home connecting back to the network or a video 1854 camera in a municipality that's sending information back to 1855 individuals that we don't want it to go to 1856 And there I think we -- and we are -- a number of companies 1857 working on networking technology that can detect if information 1858 is being sent that is -- that is different than what we intended 1859 to be sent NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 95 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1860 And I think if we can -- if we can audit the network if you 1861 will the pipe of data that's being sent to see what's actually 1862 being sent versus what we've authorized and at the same time we 1863 can continue to invest and drive in IOT 1864 for instance that are connected out in the field can connect back 1865 we can literally count the devices we've shipped 1866 the devices we see 1867 shipped then something else is going on 1868 So all of our devices We can count And if there's more devices we see than we've So those I think are perhaps two ways to look at it 1869 Certainly a complicated problem as our colleagues have pointed 1870 out But a food for thought perhaps 1871 Mr Bucshon 1872 I yield back Mr Chairman 1873 Mr Latta 1874 The gentleman from California is recognized for five 1875 1876 1877 1878 Okay Thank you The gentleman yields back minutes Mr Cardenas Thank you Chairman Latta and Ranking Member Schakowsky for calling this hearing As a former small business owner myself I know that a 1879 business that is not growing and evolving is a business that is 1880 not succeeding NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 96 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1881 As an engineer I've studied the rise and proliferation of 1882 connected devices and for the potential to help businesses and 1883 government evolve and better serve their consumers and 1884 constituents 1885 For example a company in my district that testified last 1886 June in this hearing on the internet of things Louroe Electronics 1887 uses connected microphones and sensors to help protect property 1888 and also help law enforcement detect and rapidly respond to 1889 gunshots 1890 On the public service side the internet of things technology 1891 has helped local governments and firefighters monitor and prevent 1892 and fight back firefighters in southern California for example 1893 Recently the House passed my amendment to study the use of 1894 drones to detect and fight wildfires 1895 as with any rapid-growing technology we must encourage innovation 1896 smartly responsibly and with our eyes wide open 1897 However I also know that We are constantly learning that virtually any connection can 1898 be hacked 1899 government will have to pay extremely close attention to and 1900 invest a lot of resources 1901 So cyber security is an area that businesses and Another issue that we need to hold our businesses to a high NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 97 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1902 standard on is workforce preparedness 1903 our workforce must necessarily evolve as well 1904 As our companies evolve Ideally this evolution will come in the form of education 1905 and retraining 1906 during our markup of the SELF DRIVE Act and it's an important issue 1907 in every environment 1908 This was an important issue that I brought up For example southern California happens to be -- I was told 1909 when I got elected to Congress I was reminded that southern 1910 California is the largest manufacturing area in the entire 1911 country 1912 an issue that not only is important to my district but important 1913 to one of the biggest economies in the world which is California 1914 I was pleased and surprised to hear that My first question is to Dr Kurfess So this is You have the advantage 1915 of a bird's eye view of the industrial internet of things through 1916 your work with a variety of companies 1917 So can you describe briefly what practices you've seen that 1918 help workers adapt to and learn how to better use new technologies 1919 Mr Kurfess Sure That's -- it's relatively 1920 straightforward Some of the practices that are out there 1921 actually get to some of the discussions we've had about just 1922 hygiene right You know don't plug your phone you know into NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 98 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1923 the million-dollar machine tool out there because it might have 1924 a virus on it and so forth 1925 go along the lines of you know understanding what people are 1926 comfortable with you know in terms of using and so forth and 1927 letting them make use of that technology in place But some of the other practices really 1928 As I said before we actually have developed some software 1929 where you're doing a Pikeman type of program -- you know you're 1930 looking for the guy to try and capture 1931 to capture is a flaw in your production cycle and so forth and 1932 you capture it 1933 But that guy you're trying So you actually start to bring these together The internet 1934 of things -- people are very comfortable in general 1935 doesn't matter who you are 1936 they're very comfortable using it It just People have the smart phones now and 1937 And so the idea really is yeah can you bring that comfort 1938 together so that you know they make use of it in a very easy 1939 and natural way 1940 So that's one of the things The other thing again and 1941 we've heard from several companies here again just continuous 1942 learning you know to make it easy to make -- you make it 1943 rewarded to provide the time so that the people in the plant can NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 99 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1944 1945 do some learning And we are not talking hours and hours of time Typically 1946 it's just yeah just take a look at this thing -- you know we 1947 can track your progress and so forth and you know making sure 1948 that they're up to speed on what a company needs to have them up 1949 to speed on -- whatever that might be 1950 Today it's going to be and again you know coming out of 1951 California you realize this -- whatever's going on today may not 1952 make a whole lot of difference tomorrow in terms of technology 1953 That's how rapidly things are changing 1954 Mr Cardenas It's interesting that you describe the 1955 example of the cell phone and how that could interfere with the 1956 opportunity to unfortunately have an infiltration in your 1957 system 1958 I learned again through this committee is -- one of the 1959 subcommittees on health is that some hospitals and a lot of 1960 people now realize that infections -- if you're going to get an 1961 infection probably going to get it a 1962 else -- that it wasn't some incredibly expensive process to bring 1963 down the infection rate I hospitals other thank having the 1964 discipline of everybody washing their hands at every opportunity hospital more than anywhere NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 100 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1965 Something as simple as soap 1966 But what I am getting at is I think it's important for us 1967 to teach the next generation of workforce that even though they 1968 find these things to be so darn convenient and think that it's 1969 the answer to everything 1970 with simple measures you could actually cause a disaster or 1971 catastrophe that is unintended 1972 It actually if not handled properly So I think it's important for us to realize that sometimes 1973 the answers are complicated Sometimes the answers are really 1974 simple about basic discipline 1975 Thank you very much and I yield back my time 1976 Mr Latta Thank you very much The gentleman yields back 1977 The chair now recognizes the gentleman from Florida for five 1978 minutes 1979 1980 1981 Mr Bilirakis Thank you Mr Chairman I appreciate it and thanks for the testimony I was at the VA Committee -- the joint VA Committee hearing 1982 So I apologize for being late 1983 I have a couple questions The first one for Mr Bianculli 1984 -- in your testimony you state that industrial IOT-based solutions 1985 are allowing companies to create jobs One of the big concerns NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 101 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 1986 we are facing is automation replacing jobs 1987 explain to us how these solutions help create jobs Sure So can you please 1988 Mr Bianculli Yeah I think there's sort of a micro 1989 and a macro view on that 1990 earlier around machines working with workers to help them get 1991 their jobs done more effectively The micro one I mentioned a little bit 1992 And I think when we think about that we have a tendency to 1993 think of the brawn side of that meaning that the physical movement 1994 of goods and that's for sure a part of it 1995 The other part of it is that the brain or the intelligence 1996 are an assistant that can work along the worker 1997 wearable technology augmented reality being able to put 1998 information right up in front of the user 1999 So we mentioned And as this starts to assist you that should create more 2000 job satisfaction a better work environment It also in 2001 addition to increasing quality and having benefit to the bottom 2002 line it reduces the cost of getting that job done 2003 And so if I shift from the micro perspective over to macro 2004 as we reduce the cost of getting that job done we become more 2005 competitive on a global basis thereby bringing jobs back in 2006 So if we look at any one instance we could point to well NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 102 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 2007 if we are reducing the cost of labor that -- some might say that's 2008 reducing the number of jobs 2009 efficiency of an individual and thereby increasing efficiency of 2010 that individual has the macro effect of making us more competitive 2011 on a global stage 2012 I would say it's increasing the And I think that we are starting -- I mean it's happening 2013 already We are starting to see that bear itself out The other 2014 thing we are starting to see with the on-demand economy that we 2015 mentioned earlier is the peaks are getting peakier if you will 2016 If you look at the number of shipments that are happening 2017 from manufacturing facilities or from fulfilment centers in the 2018 November to January time frame -- in some cases you know you 2019 see this in the headlines -- transportation carriers retailers 2020 are doubling or tripling their workforce to be able to handle that 2021 peak demand 2022 And so when you bring that influx of workers in if it takes 2023 two week to train somebody how to do that job you're a third of 2024 the way through that peak cycle 2025 So leveraging this technology so that someone can be 2026 functional and up and running in an hour and be as skilled or as 2027 capable as someone that's been doing it for several weeks also NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 103 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 2028 2029 becomes very important So I think if we view it that way and look at the bigger 2030 picture over the longer time horizon there's early indicators 2031 that what I just described is starting to happen and I think we 2032 should lean in and accelerate to take advantage of that for the 2033 country Thanks 2034 Mr Bilirakis Thank you Good answer 2035 In your testimony Mr Masney you note that and I quote 2036 the cost to achieve a full deployment of IOT throughout an 2037 enterprise can be quite daunting and suggest that lowering cost 2038 -- those costs would help ensure the deployment of the IOT 2039 What are some of the ways policy changes could help 2040 Mr Masney Certainly Looking at ways to reduce the cost 2041 per unit of a sensor or technology can help spur investment into 2042 the -- into IOT and it's not just one thing 2043 PLCs 2044 programming and those kinds of things 2045 It's storage It's systems It's sensors It's It's investment in So certainly looking at ways that we can spur innovation 2046 get products produced at a lower price than manufacturing 2047 companies can consume and deploy at a lower cost point especially 2048 in a business like ours which is very capital intensive is going NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 104 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 2049 to be incredibly helpful to move IOT forward 2050 Mr Bilirakis 2051 Mr Chairman I appreciate you holding this hearing 2052 2053 2054 Very good Thank you Every informative and I will yield back the balance of my time Mr Latta Thank you very much The gentleman yields back the balance of his time 2055 And seeing that there are no further members wishing to ask 2056 questions I want to again thank all of our witnesses for your 2057 great testimony 2058 Before we conclude I would like to include the following 2059 document to be submitted for the record by unanimous consent -- 2060 a letter from the Electronic Privacy Information Center 2061 And hearing no objection that letter is part of the record 2062 The information follows 2063 2064 COMMITTEE INSERT 5 NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com 105 This is a preliminary unedited transcript The statements within may be inaccurate incomplete or misattributed to the speaker A link to the final official transcript will be posted on the Committee’s website as soon as it is available 2065 Mr Latta Pursuant to committee rules I remind members that 2066 they have 10 business days to submit additional questions for the 2067 record and I ask the witnesses submit their response within 10 2068 business days upon receipt of the questions 2069 2070 And without any objection the committee will stand adjourned 2071 Thank you very much 2072 Whereupon at 11 46 a m the committee was adjourned NEAL R GROSS 202 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE N W WASHINGTON D C 20005-3701 www nealrgross com