Lessons - The Silent Tech War You're Already Losing | Keith Krach - Fmr Under Secretary of State & DocuSign CEO

In this lessons episode, explore how technology has become a critical battleground and global diplomacy and power. Discover how private sector innovation can strengthen national security and foreign policy, understand how authoritarian regimes use technology and economic competition for strategic advantage, and uncover why alliances and democratic values are essential to winning the global tech race. As you go through your career, you've had multiple successes taking multiple companies public. The concept of tech diplomacy, which is now what you're focused on mostly, how did your career in private industry, in public industry, in government? How did that inform and help you understand that this was something that you wanted to take on at this point in your life? I want you to also describe what tech diplomacy is because candidly, there's a lot of subjects that I speak about on this podcast and tech diplomacy. I've actually never heard it before I started researching for our show and trying to do the research to figure out what exactly this is and why is it relevant and what does it mean for the average person? Let's understand where this passion for tech diplomacy came from because it's highly relevant now and why are you working in it? Sure. So, where it really came about was when I was running DocuSign and we were up to about 500 million unique users around the world. We had entered every major country except for China and I went on a two-week listening trip. I usually would do that if we were going in a big country and I've been going there since 1981. I mean, I'm a lover of Chinese history, culture, the people, of course the food, but this time it was different. I could see that their traditional market competition was amped up into a new form of techno-economic aggression under General Secretary Xi. I had a chance to see their drone swarm technology. I learned about the one belt one road initiative which is look like a military supply chain to me. They were telling me to download 10 cents every 30 minutes. I met with five of the top seven polar bureau members and as I was getting back on that plane, I'm like, you know, the guys with the best technology went to war. These guys don't seem like good guys to me and I go I wonder if the guys in Washington know about this and I really I didn't know really anybody in Washington or any administration. So a week later I went out there. I made my mission to do that. Next thing you know, I'm in a room and explained about China and they go, have you ever thought about serving your country keys? I go, well, that's a dream I never knew I had. I'd be honored. They go, can you move? I go, I can move anywhere in the world. It's the fastest decision I ever made in my life. So that's when they set me to the state department to run US economic diplomacy. And my mission there was to develop and operationalize a global economic security strategy that drives economic growth, maximizes national security and combats economic aggression. And so one of the first things that I did as always is I brought in a great team. It was kind of unheard of in the state department. I brought in 12 folks from Silicon Valley, results oriented execs, entrepreneurs, technologists, and we combined it with the greatest foreign service officers and civil service I can imagine. And it ended up to be just a dynamite team. And so tech diplomacy with that does is that combines Silicon Valley strategies with foreign policy tools based on a thing called the trust principle, which was a doctrine we created to defeat China's master plan to control 5G communications. It's it's incredible what you did because everything that you just said that you did is something that I speak about in regards to the issue with government is that they don't move quick enough. They don't have outside thought coming in. So you effectively brought in some of the top talent in Silicon Valley. You applied that to a to an actual administration and you brought them in. And now you're actually solving problems at the speed and with the you know the the lens that a Silicon Valley exec would look at a problem versus a career politician. So that's something that can actually make incredible moves now. When when you go down this path where you move from private you were and public and you move from that into government. What talk about the current talk about the current state of China of what they what they have under their control. What they're trying to do. How does that impact us? For example, even if I think about foreign investment into startups in the US. What do we have to be wary of? How do we fight back against that? Sure. Sure. You know, I kind of had a chance to see it my whole life because you know what I could see through the years you know through my dad's company back you know in Ohio and the Midwest. I could see that China's weapons of mass production had devastated the heart of our economic engine. That's you know small and medium-sized manufacturers. When I was a vice president general Motors I could see if you built a plant in China you were just giving them the blueprints. You were given them the process engineer how to build it and also training the people so they could come back and compete against. I also when I was at Arriba we had an intellectual property stolen from Ali Baba and now what we see the reality we face as a nation and as a free world is seemingly ceaseless intense variation of weaponized economic competition because our rivals are playing the long game they're playing for keeps they're playing a a four-dimensional game of military economic diplomatic and cultural chess and at the intersection point and in the primary battleground is technology and worst of all these authoritarian regimes have no respect whatsoever for rule of law for property of all kinds for sovereignty of nations for human rights for the environment for the press and you know and we have to raise our our game and there is nothing static about superpower advantage and so we and the world needs American leadership so that's what you know this was all about and when when I had my Senate confirmation here and I had a good fortune the rare fortune of being unanimously confirmed was I got asked by Senator Coons and he said Keith what would your strategy be to combat China's economic aggression and I said I would harness us as three biggest areas of competitive advantage by rallying and unifying our allies and our friends by leveraging the innovation and the resources of the private sector and by amplifying the moral high ground of democratic values and that turned out to be an enduring model now that is used in the Biden administration to combat that aggression and it was that strategy combined with that trust principle that enables to defeat that master plan for 5G we also used it to create a thing called the blue dot network which is an equitable and unifying alternative to what China has called the one belt one road or some Malaysian finance minister called the one belt one way toll road to Beijing this is where China goes all over the world and creates these debt traps with these low income nations takes advantage builder infrastructure puts their you know literally devastates the environment they also really take advantage of the people in that country they don't leave them with any skills and they leave them strapped for cash so we also used it in strengthening US Taiwan ties so I was the highest state department official of visit Taiwan in 41 years I was I was greeted with 45ers and bombers and we used that trust principle put together a thing called the economic prosperity partnership and a number of other things also used that to call out the human rights abuses against the weaker Muslims in a western part of China called Xinjiang and on July 4th 2020 on national TV I called it called out that genocide I was first government official do that and so that trust principle was really the basis of everything and and why was that you know I think it's because you've dealt with and observed China for so long and maybe that's the answer but why were these particular causes so important to you because there's a lot of other things that threaten the US in terms of their economic prowess and there's other countries obviously China is one of them and we look at Russia as well and sure there's a few others that probably are trying to compete on various levels but the things that you deployed in Taiwan in particular why does that tie back to the impact that you know China could have on the US because I don't want in a precarious position right now by rich Taiwan is a linchpin for democracy and a role model of freedom that's what they are to the free world now to general secretary Xi what they are is they dispel well his myth that the Chinese culture cannot live under a democracy but it has to live under authoritarian rule and he wants it gone and and by the way to companies around the world China US conflict would be devastated and literally catastrophic for the high tech business because in Taiwan that's where they manufacture the most sophisticated semi-conductors in the world which is the foundation for all you know for all technology so this is this is really a big deal and if you think of China is the biggest threat to freedom and democracy around the world and you know it was interesting when I was under secretary and this was in January 2020 I came back from Washington to my home in San Francisco I hosted 36th the top CEOs in Silicon Valley you'd recognize all their names all the companies they may have been here before a safe environment I asked them go around the room and tell their China horror stories and you know I can't talk about the contents of that meeting but I could tell you this is that they it was cathartic it was enlightening and it was frightening all at once got and at the end of it I said you know guys we say out here that corporate responsibility social responsibility it's also national security it's global economic security too because not only is China real and urgent threat to our democracy and our freedom but they're also real and urgent threat to our businesses and so if you think of the things that we are those things like respect for rule of law and property and environment human rights these are things that we are and authoritarian regimes like Russia and China do not and they as a matter of fact they used it against them for their strategic advantage so think about this got so let's say you're a Silicon Valley CEO and I'm a Chinese company so if I could steal your intellectual property if I don't have to be transparent if I can use slave labor if I can use a cheap huge energy coal fired power plants if I don't have to be reciprocal with my market if I either am the law or I don't have to obey the law I'm going to beat you every time and so and they use co option coercion all all this stuff no respect for human life that's what we call the power principle so we did is we created this doctrine called the trust principle where we actually use the dark advance advantage so one jujitsu move we flipped them on their back so we actually weaponize the very principles they protect our freedom thanks for tuning in if you found this valuable don't forget to hit that subscribe button so you never miss an episode and if you want to dive deeper into this conversation check out the links in the description to watch the full episode see you in the next one