How NATO’s 5% Defence Pledge Could Reshape Labour Markets Across the Alliance
Work News | New Stardom
U.S. President Donald Trump (left) consults with NATO Secretary General Mark Rutte at the 2025 NATO Summit in The Hague. Image: NATO / nato.int
At this week’s NATO summit, member countries agreed to raise defense spending to 5 percent of GDP by 2035, allocating 3.5 percent for core military needs and 1.5 percent for related infrastructure, cyber, and resilience efforts.
NATO’s new commitment to raise defence spending to 5% of GDP by 2035 could reshape labour markets across the Alliance, depending on how governments allocate the funds and structure procurement. If member states channel the 3.5% military allocation into domestic manufacturing, the increase may support employment in arms production, vehicle assembly, ammunition supply, and logistics. Countries with existing industrial capacity, such as Germany, France, Turkey, and Poland, are positioned to handle increased demand through local contracts involving engineering, skilled trades, and support services.
At the 2025 NATO summit in The Hague, U.S. President Donald Trump stated that allied countries should purchase U.S.-produced defence systems. These include fighter aircraft, munitions, surveillance equipment, and command platforms. If member states align procurement with U.S. systems without domestic offsets, spending may primarily benefit American defence industries, with limited employment effects in Europe. If domestic alternatives or joint production agreements are pursued, the impact on local labour markets may differ.
The additional 1.5% allocated for infrastructure, resilience, and cybersecurity is expected to create demand in civilian sectors. Projects may involve airfields, transport corridors, energy infrastructure, and secure digital networks. These investments are likely to require roles in civil engineering, construction, telecommunications, and logistics, particularly in countries hosting NATO bases or support facilities.
Spending on digital and technological capabilities, such as encrypted communications, AI-enabled systems, and satellite surveillance, may also lead to growth in research labs, cybersecurity firms, and specialised technical roles. These jobs tend to be highly concentrated and are dependent on national R&D infrastructure.
Supply chain restructuring remains a further variable. NATO’s strategic focus on resilience, combined with EU defence industry planning, may lead to increased production of critical components within member states. According to the Kiel Institute for the World Economy, defence spending may support GDP and employment growth when procurement is retained domestically, though the effect depends on capacity and implementation.
Growth is also expected in support roles: simulation developers, medical staff, training personnel, procurement officers, and operational logistics. These positions are often tied to force readiness targets and typically scale alongside formal defence expansion.
Whether NATO’s new spending targets translate into employment growth across member states will depend on procurement decisions, industrial policy, and national investment strategies. Outcomes will likely vary by country and sector.
Sources:
Reuters | EC | Atlantic Council | CEOBS | Kiel Institute | BBC News | NOS
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