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Defence spending can create jobs and strengthen national security, but the two outcomes are not automatically aligned. Spending is most likely to serve both when it meets a real security need and builds productive skills, infrastructure, research or industrial capacity. A headline job count alone does not show whether jobs are new, lasting or worth the public cost.
Does defence spending create jobs?
Yes. Defence budgets pay military personnel and support work in manufacturing, engineering, construction, maintenance, logistics and research. Contractors and their suppliers may also hire workers when governments buy equipment or build and maintain infrastructure. Domestic suppliers can retain more of that activity inside the country, including in fields such as aerospace, advanced manufacturing, artificial intelligence and quantum technology.
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How much employment results depends on what is purchased, where suppliers are located, how much of the work relies on imports, whether skilled workers are available, and whether funding continues. Jobs described as “supported” through economic multipliers are not necessarily net new jobs: workers, investment and public funds may have shifted from other parts of the economy.
What the government figures show—and what they do not
| Jurisdiction and source | Reported figure | How to interpret it |
|---|---|---|
| Canada, Defence Industrial Strategy | Nearly 600 defence firms contributed 81,000 jobs and $9.6 billion in GDP in 2022. | A reported contribution of the defence industry in 2022, not an estimate of jobs created by one new programme. |
| Canada, current Defence Industrial Strategy | Up to 125,000 additional jobs targeted as defence capacity expands. | A policy target, not a guarantee that those jobs will materialize or be net additions to national employment. |
| Canada, 2026 government estimate | About $59 billion in defence-infrastructure spending over ten years could support roughly 340,000 direct and indirect jobs. | An indicative estimate using Statistics Canada multipliers; “supported” does not mean 340,000 permanent net new jobs. |
| United Kingdom, Invest 2035 | Government defence spending supports around 434,000 jobs; 67% of defence spending with UK industry and commerce goes outside London and the South East. | These are UK government figures about supported employment and the geographic distribution of industry spending, not a universal pattern. |
These measures describe different things and should not be added together or treated as directly comparable. They illustrate the scale and reach governments attribute to defence activity, but do not by themselves establish the net employment effect or whether the same money would produce greater benefits elsewhere.
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When can security spending and economic growth reinforce each other?
The strongest case for a joint security-and-jobs benefit is when a programme delivers a needed capability while leaving the country with useful productive assets: trained workers, resilient suppliers, infrastructure or research that can support further innovation. Domestic sourcing can help retain spending and maintain capacity for critical inputs. But it only does so where domestic firms can actually deliver; local content is not a benefit if it raises costs without improving capability, resilience or lasting industrial capacity.
Research and infrastructure may also have economic effects beyond immediate hiring. In a 2026 analysis, the European Central Bank cited a model estimate that raising defence spending by 1% of GDP could increase total-factor productivity by 0.3% over the long run, primarily through public-research-and-development spillovers. The ECB also estimated that bringing European defence research and development up to the US rate could raise EU GDP by 0.5% in the long run, assuming defence-related R&D has the same economic effect as government-funded R&D. Both are model-based estimates, not observed or guaranteed results.
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Spending composition changes the likely payoff
| Spending channel | Potential contribution | Question to test |
|---|---|---|
| Personnel | Employs service members and support staff. | Does the staffing meet a real operational need, and what civilian work might those workers otherwise do? |
| Equipment procurement | Supports prime contractors, suppliers, engineering, manufacturing and maintenance. | Does the equipment address a defined mission, and can it be delivered at an appropriate cost and schedule? |
| Infrastructure | Can create construction and supply-chain activity while improving facilities or resilience. | Will the asset meet an enduring need, and how much of its economic benefit remains after construction ends? |
| Research and development | May build technical knowledge and produce civilian spillovers. | Is there a credible path from the research to useful capabilities, skills or wider innovation? |
The table describes possible channels, not assured outcomes. A project can employ people without delivering a useful capability, and an innovation benefit depends on research quality and whether knowledge spreads beyond the programme.
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Employment goals can distort procurement if a government chooses or preserves a programme chiefly to protect jobs in a particular firm or region rather than to meet the most important threat or mission. That can mean less capability for each public dollar. Similarly, defence hiring can draw skilled workers away from civilian industries, where they might have contributed to broader productivity or infrastructure investment.
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Job totals also leave out job quality and durability. Temporary construction hiring, long-term engineering roles and positions dependent on a single government contract have different implications for workers and communities. A national total can conceal concentrated benefits in some regions and tax or opportunity costs spread across the country.
As the Congressional Research Service puts it, “In national security, the economy is both the enabler and the constraint.” Defence capacity relies on a functioning economy and public finances; conversely, an economy strained by excessive commitments may have less room to fund future security needs.
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Is economic strength itself a security asset?
Yes. Security depends not only on armed forces and equipment but also on human capital, science and technology, innovation, resilient trade and supply chains, and the ability to finance public priorities. A strong industrial base can help a country sustain production or respond to disruption. Fiscal capacity matters too: if the economy is weak or public finances are unsustainable, maintaining security capabilities becomes harder.
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That is why the choice is not simply “security or jobs.” Economic strength can support security, while security investment can sometimes strengthen economic capacity. Canada’s Defence Industrial Strategy says, “Our national security and our economic security go hand in hand.” Whether a particular expenditure makes that true depends on its design and results, not the slogan.
How should governments judge the trade-off?
Assess a defence programme against both its security purpose and its economic alternatives. A practical review should ask:
- Capability: What specific threat, mission or vulnerability does the spending address, and what capability will be delivered?
- Net employment: Are the jobs additional, skilled and durable, or are workers and contracts being shifted from other sectors?
- Economic geography: Which regions and communities receive the work, and who bears the taxes and opportunity costs?
- Productivity and innovation: Is there a credible route to research spillovers, new skills or useful civilian applications, rather than an assumed multiplier effect?
- Fiscal sustainability: Can the country afford the programme over its full life without weakening debt capacity or essential public investment?
- Alternatives: Would infrastructure, education, health, basic research or civilian industrial policy produce greater employment, resilience or long-term capacity for the same resources?
A programme makes a stronger case when it meets a defined security requirement, builds capabilities the country needs, and delivers durable economic benefits at an affordable cost. If its employment case depends mainly on a large supported-jobs estimate while its strategic value or opportunity cost is unclear, the job count is not enough to justify it.
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