Modern warfare is repeatedly misread through the expectation of a short, decisive conflict. Military planning has long been shaped by what historians describe as a ‘battle-centric’ view of war – emphasising the initial strength and prowess of armed forces, while underestimating the economic and social capacity required to sustain a prolonged conflict.
Recent events – from the war in Ukraine to escalating tensions in the Middle East and the prospect of conflict in the Indo-Pacific – are once again exposing this gap between expectation and reality.
Modern conflicts are increasingly defined not by the strength of armed forces at the outset, but by the ability to sustain production, logistics and adaptation over time. The decisive factor is no longer inventory, but capacity.
Recent analysis has highlighted how modern warfare depends on industrial depth: the ability to mobilise supply chains, scale production and maintain operational tempo over extended periods. But this leaves a deeper question unresolved. What determines whether a state can sustain these efforts over time?
The answer lies not only in production, but in how underlying economic resources are structured, governed and mobilised.
Production as underrated power
Industrial capacity can be expanded – but only if the underlying assets can be financed, managed and deployed effectively. Production is a visible expression of power; the asset base is what makes it possible.
This distinction matters because modern war is not a single event, but a process unfolding over time. It requires continuous flows of equipment, energy, financing and labour. States that cannot sustain these flows– regardless of their initial strength – see their capabilities erode.
The war in Ukraine illustrates this shift. What began as a contest of military force has evolved into a prolonged struggle shaped by production capacity, logistics and external support. The ability to replenish equipment, adapt supply chains and integrate new technologies has proven more decisive than the size of forces deployed at the outset.
At the same time, the conflict has revealed a persistent misunderstanding. Military capability is still often assessed through static measures – inventories, force structures and headline defence spending – while underestimating the importance of sustained production and adaptive capacity. Yet over time resilience, improvisation and access to resources  have proven at least as important as initial strength.
This is where the underlying asset base becomes critical.
The underutilised source of strategic capacity
Public assets – including infrastructure, energy systems, state-owned enterprises and financial institutions – form a substantial but often underutilised foundation of this capacity. A state’s ability to sustain production depends not only on its industrial base, but on how it can mobilise and manage its economic resources.
When public assets are fragmented, poorly governed or treated primarily as administrative entities, they contribute less to strategic capacity than they could. When they are managed with clear objectives, transparency and an understanding of their economic role, they can support sustained investment, expand production and strengthen resilience over time.
This is simply not a question of fiscal space. Governments often frame strategic choices in terms of budgets, deficits and borrowing limits. But these measures capture only part of the state’s economic reality. They reflect flows, not the underlying stock of assets that can be mobilised.
Therefore, the constraint is not purely financial. It is structural.
In many advanced economies, substantial public assets exist but they are not integrated into a coherent framework for capital allocation. Infrastructure, real estate, utilities and commercial enterprises are managed in isolation, often with limited visibility into their performance, returns or strategic value.
Without portfolio visibility, these assets cannot be managed as a coherent whole. As a result, the state’s asset base remains underutilised as a source of long-term capacity. This has direct implications for defence and security.
The mobilisation gap
Sustaining military capability requires more than procurement budgets. It requires the ability to expand industrial production, secure supply chains, finance long-term investments and absorb shocks. These are fundamentally asset management functions.
When public capital is tied up in low-return or poorly governed uses, it absorbs financial and banking capacity that could support more productive sectors – weakening the broader economic base on which defence ultimately depends.
Countries that can mobilise their assets effectively are better positioned to sustain prolonged efforts. Those that primarily rely on annual fiscal flows face tighter constraints, even when underlying resources are substantial.
The contrast is increasingly visible. Some economies maintain high levels of investment and industrial activity, even at the cost of efficiency. Others, despite strong asset bases, struggle to mobilise resources at scale due to institutional fragmentation and narrow fiscal frameworks.
The foundation of endurance
Strategic capacity is not simply a function of wealth or industrial output. It depends on how economic resources are structured, governed and deployed over time.
This distinction has implications beyond any single conflict.
As geopolitical competition intensifies, the ability to sustain economic and industrial mobilisation will become a defining feature of power. Short-term strength may still shape initial outcomes. But long-term capacity will determine endurance.
Reframing the discussion in asset terms does not diminish the importance of industry, alliances or societal resilience. It clarifies the foundation on which they depend.
Modern war is sustained not only by what an economy can produce, but by what the state can mobilise and finance over time. That, in turn, depends on how effectively a state manages and deploys its assets alongside its borrowing capacity.
 Dag Detter is Principal of Detter & Co.
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