Rising Global Defense Spending Drives New Contract Rules
Contractors must navigate evolving domestic localization mandates as government defense spending enters a new growth cycle.
Updated on Oct. 23, 2026 in Military Jobs
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Willis has launched a global defense and security practice to address a surge in international military spending and shifting procurement standards. This initiative targets the growing defense sector, which saw global spending hit nearly US$2.9 trillion in 2025.
Why it matters
The defense industry is entering a significant investment cycle, creating new, complex compliance and supply chain requirements for vendors. As governments like Canada ramp up procurement, businesses must navigate increased capital investment and new localization mandates.
Global military spending hit nearly US$2.9 trillion in 2025, supported by significant policy shifts such as Canada reaching its 2% GDP defense spending target. Canadian authorities aim to raise the share of defense contracts awarded to domestic firms to 70%.
The players
Willis
A global advisory and risk services firm that provides integrated professional services across 140 countries.
Jennifer Caldarella
The leader of the newly formed global defense initiative at Willis.
Government of Canada
A national authority actively scaling domestic defense manufacturing and procurement under a new industrial strategy.
The details
The initiative centralizes specialists in risk transfer, advisory, cyber, and crisis management to serve clients across 140 countries. This reflects a broader trend where government procurement, such as the Canadian Defence Industrial Strategy, is prioritizing domestic firm participation. Operators in this space must adapt to these localized contract requirements while preparing for global spending to potentially reach US$6.6 trillion by 2035.
Timeline
2024: 100 largest arms producers earned US$679 billion.
2025: Global military spending reached nearly US$2.9 trillion.
February 2026: Canada launched the Defence Industrial Strategy.
March 2026: Ottawa reached the NATO target of 2% GDP defense spending.
October 22, 2026: Willis launched its global defense and security practice.
Market Landscape
The launch of the Willis practice follows the February 2026 implementation of the Canadian Defence Industrial Strategy. This development mirrors a global trend where private firms are restructuring to align with national government procurement shifts.
Operators in the defense supply chain should evaluate their eligibility under new domestic contract quotas, such as Canada’s 70% local award target. Monitor procurement agency shifts, as capital investment in the sector is projected to remain elevated through 2035.
The takeaway
The sector is shifting toward heightened domestic localization requirements and massive capital investment programs. Companies should track the implementation of the Canadian Defence Industrial Strategy as a benchmark for potential regulatory changes in other NATO-aligned markets.
Further reading
Explore industry trends for Military Jobs to understand how global defense spending affects professional opportunities.
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