Stranded Capability? The value of the Army Reserve Asset in 2020By Mike Kalms May 7, 2020
In 1914 the British Navy had a problem according to Winston Churchill, a big one.
Sure its Navy was the best in the world, but the advent of the Dreadnought Class, and Germany’s adoption of submarine technology had rendered – in his mind at least – the bulk of the fleet obsolete. Thinking of ways of usefully employing this ‘stranded capability’ he landed upon the Dardanelles, and a naval clearing campaign knowing the cost would be high, but what else could they be usefully employed for?
Now we know that turned into a completely different type of campaign, one which Churchill later decried, but the conundrum is a useful one for us – how do we know, and what do we do, when a Defence asset becomes stranded? This blog will argue that we have such assets now – and that different thinking, perhaps like Churchill’s, is required to extract latent value from them.
Stranded Capability Defined
The term Stranded Asset comes from the world of economics. Stranded Assets are those that “have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities”. Applied to defence we will define Stranded Capability as those assets that “have suffered from accelerated or premature dilution of their effect or purpose“.
The lesson from Churchill is twofold: (a) there is seldom agreement amongst stakeholders about the degree or speed of effect/purpose dilution, and (b) even if there is a level of agreement, what to usefully do with that stranded capability is rarely simple to agree.
The 2020 Army Reserve – Stranded Capability?
Australia has been investing in an Army Reserve for a long time. Much like example of Britain's Royal Navy, spending billions of today dollars on a capability makes it very hard to rationally assess whether the current capability can generate the effect, or achieve the originally intended purpose. I highlight the phrase 'originally intended', because the most common method of defeating the accusation of being stranded is to carefully re-define why we invested in the accused capability to begin with.
The Army Reserve of today can no longer deliver on the purpose for which it was conceived. As a mobilisation base, and as a follow-on force, the Reserve offers at best a diluted effect. In 1948, when a 50,000 person Citizen Military Forces (CMF) was raised alongside a 19,000 strong regular Army the purpose was clearly linked to structure. A broad base as the growth foundation for a tip of the spear professional element. Whether 19,000 v 50,000 is the right ratio is an important question and one we know was debated then. But we should be able to deduce that (today’s ratio of) 30,000 regular and 15,000 CMF was unlikely to be assessed as ‘equally valid’ by 1948 planners. No, the ‘Reserve as a National Mobilisation Base’ argument is dead.
As Churchill experienced in 1914, the critic responds “no, the purpose of the Army Reserve has changed, your analysis is dated”. Ok, what then is the purpose of a ‘contemporary reserve’? Broadly and simply, the argument shifts to niche capability,and geographic engagement. The contemporary Australia Army Reserve contains a series of skillsets such as medical and logistics, sometimes extending into very narrow warfighting skillsets, all of whom are described as personnel that are too small, fragile or expensive for the full-time Australian Defence Force (ADF). A second contemporary purpose, the Reserve is the ADF’s ‘link to community’ as full-time capability moves to remote bases where they can more freely train and operate.
Well, again, if this is true the connection to purpose is diminishing as those niche skillsets are easily accessed via more agile commercial vehicles, by allies or by analogues in the ADF e.g. Reservist Cavalry Scouts. No thanks, I’ll just use 1 RAR. And when it comes to community connection this is today provided more efficiently through technology and frankly, by cadets. In 2020, in every case, there seems a more efficient and effective way to generate the effect our Army Reserve offers.
Extracting Value Later in the Lifecycle of an Asset
What would Churchill do with Australia’s Army Reserve of 2020? Well, he’d use it.
He would find a new purpose, one that extracted every last ounce of value from it as it enters its latter days. Many will react to the idea that we are in the ‘latter days’ of the Army Reserve. Similar people felt similarly in the latter days of horse artillery, the steam train and the telegraph system. The world moves forward. Our Army Reserve will not deploy to into the South China Sea, or the Korean Peninsula. But could it be useful elsewhere?
The first obvious answer is as a response tool for national emergency. This is a ‘lower probability of call out/for, high domestic profile’ tasking. Whilst it feels ‘high probability’ at present the long term historical perspective would suggest this tempo is rare. But the skillset is quite different – it’s a utility purpose, not a specialisation one. For Op Bushfire Assist it was engineering, chain saws and PMV, but for COVID-19 it will be different, and for the crisis after that different again. Re-purpose the Reserve as a high utility, federal domestic response asset.
Could the Reserve be converted to an industrial asset? A more speculative re-purposing of the Reserve would be as an ‘economic plug’ in the event of regional or national economic instability. Woolworths supply chain fails? Task the Reserve. Factories in Western Australia empty? Call for... Harder to see the contingencies perhaps – but already we’ve seen an early Defence Aid to the Civil Community (DACC) task in Victoria that involves ADF personnel deployed to industrial manufacturing. Perhaps there are other ‘active in event of emergency’ industries the Reserve could be re-purposed to.
A third idea could be to generate purpose through geography. Perhaps the Reserve could morph into the Government's South West Pacific Strategy, with a purpose to circulate formed bodies of t-shirt clad soldiers to the region to build, educate, grow, repair and sustain communities in that part of the world. Perhaps a set of new purposes could be developed and trialled? Certainly there will be a number of novel ideas tabled if Reserve ‘purpose dilution’ is agreed and a call to action raised.
Train Hard Fight Easy
An important corollary in this argument is that if government concludes the Army Reserve is a Stranded Capability, then it should break the nexus around ‘warfighting investment’ and fund it for the tasks it will do. The government should not continue with the funding argument which is prevalent now that part-time forces need to be trained and geared for mid-to-high intensity warfighting, then deployed on low intensity national operations.
Giving up on the dream of a Reserve Battle Group on the Korean Peninsula will be tough for many - in and out of the Reserve. Churchill wouldn’t care and we shouldn’t either, because the real battle is for relevance. Stranded Assets – if not addressed – become Irrelevant Assets. Irrelevant assets have no economic, social or national value – let’s not allow the Reserve to drift there.