Defense Secretary Hagel speaks in Newport

Defense Secretary Chuck Hagel listens to opening statements prior to testifying on Capitol Hill in Washington, Wednesday, June 11, 2014, before the House Armed Services Committee. (AP Photo)

Secretary of Defense Chuck Hagel said Wednesday the U.S. needs to step up and make changes to face a changing world on a tighter budget.

"Resources for defense are declining, even as the threats to our national security are becoming more sophisticated, more deadly and more diverse," he said.

Sequestration cuts last year shocked the Department of Defense, but Hagel said doing more with less is now the law of the land.

At the inaugural Defense Innovation Days hosted by the Southeastern New England Defense Industry Alliance in Newport, speakers talked about how to do that.

"Well, the world is a really dangerous place these days. I think we saw it (Tuesday) again with the execution of the journalist over in the Middle East," said Rear Admiral David Duryea of the Naval Undersea Warfare Center.

Duryea said during his 30 years of service, innovation has been key.

Unmanned aerial vehicles have changed warfare, and he said unmanned undersea vehicles will do the same thing.

The Razor UV is one of those vehicles and it is developed in Newport.

"It actually acts like a turtle. So these things will flap up-and-down, back-and-forth. The vehicle can hover," Duryea said.

Ocean Engineer Nathan Banks showed NBC 10 how it worked.

The vehicle relies on technology that already exists but puts it together in a new way allowing it to do what torpedoes can't.

"If you need anything to hover, like ship inspections, swimmer defense, finding a bad guy in the water, swim-speed maneuvers, this is really the vehicle you want to go for," he said.

"DoD and industry cannot afford to putter into stagnation. We must do more. We must do better," Hagel said.

Hagel also talked about the importance of supporting small businesses who do work for the Defense Department. He said about 20 percent of Defense Department dollars go toward small businesses and start-ups and he wants to help them succeed.