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Industry Primers

Bottom-up NAICS industry primers written for both public-market and private investors. Leaf industries are researched from the ground up; every group, subsector, and sector above them reads as a contrast across the industries beneath it.

2122 industries · 24 sectors · NAICS 2022

Researched with AI assistance from official U.S. statistics and independent sources, with citations on every page. Figures are not individually verified against pinned evidence — primers marked Evidence-verified are. Industry research, not investment advice. Methodology.

SubsectorNAICS 928Public Administration

National Security and International Affairs (NAICS 928): An Investor's Primer

This is a rollup page for a subsector. In the North American Industry Classification System (NAICS) — the standard used to categorize the U.S. economy — a three-digit code names a subsector. Code 928, "National Security and International Affairs," sits inside sector 92 (Public Administration), and it contains exactly one four-digit child: 9281, which carries the same name. Because 928 has a single child, this level is effectively identical to 9281 — the same activities, the same dollars, the same investable logic. This page is deliberately short: it states what the level is, gives the ground-truth figures we hold for it, and points you to the child primer for full depth.

1. Overview

NAICS subsector 928 groups the U.S. government's outward-facing activity: defending the country and conducting relations with other countries. Neither is a business in the ordinary sense — both are government functions funded by congressional appropriations, not by selling anything. There is no stock called "928," and standard business statistics barely register it.[1][2]

An investor cares because this subsector sits at the head of two large private ecosystems that live or die by a federal budget line. The government does not build its own fighter jets or run its own aid clinics; it buys them from contractors. You cannot own the function — you own the suppliers exposed to it. The single most important fact is that the subsector's two working halves could hardly be more different as investments: one is enormous, growing, and richly investable through public markets (defense); the other is small, politically fragile, and has essentially no pure public play (international affairs).

2. What's inside — and why 928 equals its one child

NAICS is a nested hierarchy: sector (2-digit) → subsector (3-digit) → industry group (4-digit) → industry (5-digit) → national industry (6-digit). Subsector 928 has a single industry group beneath it, 9281 (National Security and International Affairs), so the two codes describe the same universe of activity. Everything true of 9281 is true of 928.[3][4]

The real split shows up one level down, inside 9281, which divides into two five-digit industries:

  • 92811 National Security — the armed forces and defense establishment (Army, Navy, Air Force, Marine Corps, Space Force, National Guard, bases, and command apparatus).[3]
  • 92812 International Affairs — diplomacy and foreign aid (the State Department and Peace Corps, foreign embassies and consulates on U.S. soil, and multilateral bodies based here such as the World Bank and the International Monetary Fund).[4]

Within that pair, defense is on the order of fifteen-to-twenty times larger than international affairs by budget, is expanding while diplomacy and aid are contracting, and offers a genuine public investable menu where international affairs offers almost none. An allocator who "buys 928" is, in practice, buying defense — with a thin, politically driven aid-services tail attached. The child primer for 9281 lays out that contrast in detail.

3. Size of this level

A statistics caveat first. Our ingested ground-truth dataset for NAICS 928 contains no metrics at all — no establishment, employment, payroll, or receipts figure.[1] That is by design. The U.S. Census Bureau's core business programs — the Economic Census, County Business Patterns (CBP), and the Statistics of U.S. Businesses (SUSB) — exclude Public Administration (sector 92) and government establishments.[2] A subsector made almost entirely of governments and international bodies is nearly invisible in private-business data, so no NAICS revenue or establishment figure exists at 928, at its child 9281, or further down. The blank is honest, not an omission — we do not state a suppressed value, because there is none to state.

Every size figure below therefore comes from budget and personnel data, labeled as such, and describes the underlying government activity rather than "revenue of NAICS 928." Because 928 equals 9281, these are the same rollup figures reported in the child primer:

  • The money (defense). National-defense total (budget function 050): ~$1,011.9 billion for the FY2026 request; Department of Defense (DoD) total ~$961.6 billion — a nominal record approaching $1 trillion.[5]
  • The money (international affairs). Budget "Function 150," historically ~1% of the federal budget; the State–Foreign Operations appropriation was ~$62.7 billion in FY2024, the FY2026 request sought to cut it to ~$31.2 billion, and Congress enacted ~$50 billion.[8][9][10]
  • The people. Defense: roughly 1.32–1.33 million active-duty service members plus ~700,000–800,000 civilians (close to half the federal workforce), with reserves and the National Guard adding over a million more.[7] International affairs: before the 2025 reorganization, the State Department had more than 14,000 Foreign Service and ~13,000 civil-service employees plus over 31,000 locally hired staff.[14]

Undercount caveat. Because both halves are government functions with a single (or single-agency) "owner," ordinary business tallies undercount them to essentially zero. Any commercial location count for these codes captures only a sliver of private offices and misses the governmental core entirely; the private supply chains that are investable are scattered across manufacturing and services NAICS codes, not counted here. Measured by dollars and people, 928 is one of the largest single activities in the federal government — it simply registers as spending, not as a commercial industry.

4. Investable universe — where value concentrates

Value is lopsided toward defense, and the routes differ sharply between the two halves.

  • National security — a deep public menu. Value concentrates in the defense industrial base (DIB), the private supply chain that sells to DoD. Publicly traded primes and a services / information-technology (IT) tier give ample liquid exposure; the highest-growth "neo-prime" names are still private, reachable only through venture, pre-initial-public-offering (pre-IPO), or secondary channels.[5][16]
  • International affairs — almost no pure play. The core institutions are governments and non-profits that issue no stock. Exposure is indirect and is usually a minority of any listed firm's revenue, with the purest exposure sitting in privately held implementing partners and non-profits — most employee-owned and not buyable on an exchange.[18]

Specific tickers, ETFs, and company weights live in the 9281 child primer, which enumerates the full menu.

5. How the money works

Both halves run on the same two-track logic — a government "core" that earns nothing and a contractor "edge" where investors earn. Congress appropriates; "success" for the core is measured in budget authority, obligations (money legally committed), and outlays (money actually paid), not revenue or margin. On the contractor edge, the flow is: Congress authorizes and appropriates → the agency contracts → a prime wins and subcontracts → revenue is recognized on delivery → cash arrives via progress, milestone, or recurring billing.[6][18]

The decisive difference between the two halves is stability. Defense budgets grind upward with broad bipartisan support; the international-affairs topline can be halved by a single election, executive order, or rescission (a clawback of already-appropriated money), as 2025 showed.[9][13] Investable-universe language — dividend yields, valuation multiples, margins — applies to the contractors, not to the government functions themselves; the child primer works through the numbers.

6. Demand drivers

Demand across 928 is policy demand, set by threat perception and politics rather than the ordinary business cycle — and the politics push the two halves in opposite directions. National security is pulled up by strategic competition with China and Russia, the war in Ukraine, Middle East conflict, and a modernization wave (nuclear recapitalization, missile defense, hypersonics, munitions, shipbuilding, space, autonomy, and artificial intelligence).[5] International affairs draws on the same geopolitics, but its budget is a perennial cut target because it is small and lacks a domestic constituency, and in 2025 it contracted hard.[8][12] The shared lesson: for both, the demand case is durable while the funded revenue is lumpy and political — more so for aid than for defense.

7. Regulation

For this subsector the regulatory environment is the operating environment. Spending on both sides requires enacted appropriations, with continuing resolutions (CRs) — stopgaps that freeze funding at prior levels — a recurring drag. Contracting runs under the Federal Acquisition Regulation (FAR) (defense adds the DFARS supplement), with government audit. Private suppliers carry heavy compliance loads: export controls (the International Traffic in Arms Regulations, ITAR), sanctions (the Office of Foreign Assets Control, OFAC), and, for aid work specifically, the Foreign Agents Registration Act (FARA) and Foreign Corrupt Practices Act (FCPA). Defense adds classified-work rules and the Cybersecurity Maturity Model Certification (CMMC); international affairs adds diplomatic law and, in 2025, executive action (Executive Order 14169) that froze aid and unwound the U.S. Agency for International Development (USAID).[13] Full detail sits in the child primer.

8. Consolidation

Both halves are shaped by a near-monopsony government buyer, but their market structures move in opposite directions. Defense is the product of decades of consolidation — major U.S. primes fell from 51 to 5 by the early 2000s — now met by two counter-currents: regulators resisting further prime-level mergers and software-first "neo-primes" challenging the legacy model.[6][15][16] International affairs consolidated violently and involuntarily in 2025, when USAID's program cancellations wiped out much of the pure-play development-contracting market and rewarded diversified federal primes.[12][18]

9. Risks

The two halves share a risk type — dependence on one appropriations process — but not its severity. Common to both: budget/political risk, customer concentration on a single buyer, contract and working-capital risk (recompetes, protests, stop-work orders, terminations), and compliance risk. Where they diverge: for defense, the sharpest risks are program-execution losses and stretched valuations in private defense-tech, against a stable and growing funding base; for international affairs, the dominant risk is policy/appropriations risk that is largely unhedgeable — a single election, executive order, CR, or rescission can gut the funding, as 2025 proved.[5][13][18] The core analytical mistake, common to both, is treating backlog or budget headlines as guaranteed profit.

10. How to invest and outlook

Practical approach. Treat 928 as "defense plus a thin aid-services tail," because that is what its dollars are. The national-security side is the investable core — individual primes, services/IT names, defense-tech, and diversified aerospace-and-defense exchange-traded funds (ETFs) all provide exposure, with private routes for the marquee growth names. The international-affairs side is better treated as a risk factor to monitor than an allocation of its own: no ETF tracks it, there is no pure play, and the purest exposure is largely not publicly investable.[16][17][18]

Outlook. The two halves point in opposite directions — defense enjoying record nominal budgets near $1 trillion and bipartisan support, international affairs facing durable underlying demand but volatile, shrinking funding. There is no defensible growth rate or revenue estimate for NAICS 928 itself — the government-operated subsector carries no business statistics.[1] The honest summary: this is a real, consequential, roughly-trillion-dollar-a-year set of government activities, but it is a function you fund, not an industry you can own — and its tradable value is concentrated almost entirely on the defense side.

→ Because 928 has a single child, the full detail lives one level down. Read the child primer: NAICS 9281 (National Security and International Affairs), and its two industry primers, 92811 (National Security) and 92812 (International Affairs).

Sources

  1. Provided federal statistics file, Ingested Official Stats — NAICS 928 (no ingested metrics), 2026.
  2. U.S. Census Bureau, Statistics of U.S. Businesses / Economic Census — Understanding NAICS (Public Administration and government establishments excluded from SUSB, CBP, and the Economic Census). https://www.census.gov/programs-surveys/susb.html; https://www.census.gov/programs-surveys/economic-census/year/2022/guidance/understanding-naics.html
  3. U.S. Census Bureau, "2022 NAICS Definition — 928110 National Security." https://www.census.gov/naics/
  4. U.S. Census Bureau, "2022 NAICS Definition — 928120 International Affairs." https://www.census.gov/naics/?details=928120&year=2022
  5. U.S. Department of Defense, Office of the Under Secretary of Defense (Comptroller), FY2026 Defense Budget Request, 2025 (national-defense total, DoD total). https://comptroller.defense.gov/Budget-Materials/
  6. Congressional Research Service, Defense Primer: Department of Defense Contractors (IF10600), 2025, and The U.S. Defense Industrial Base: Background and Issues for Congress (R47751), 2024 (contractor concentration; 51→5 primes). https://www.congress.gov/crs-product/IF10600; https://www.congress.gov/crs-product/R47751
  7. USAFacts / U.S. Department of Defense, "How many people are in the U.S. military? (active-duty and civilian personnel, 2025)," 2025. https://usafacts.org/articles/how-many-people-are-in-the-us-military-a-demographic-overview/
  8. Congressional Research Service, "Department of State, Foreign Operations, and Related Programs: FY2025 Budget and Appropriations" (R48231), 2024 (Function 150 ≈ 1% of the federal budget). https://www.congress.gov/crs-product/R48231
  9. ONE.org, "The Administration's FY26 International Budget Request & Rescissions," 2025 (FY2024 SFOPS ≈ $62.7B; FY2026 request $31.2B). https://www.one.org/us/what-we-do/the-issues/foreign-assistance/the-administrations-fy26-international-budget-request-rescissions/
  10. USGLC / Congressional Research Service, "Congress Reaches Agreement on FY26 International Affairs Spending" (R48624), 2025/2026 (≈ $50B enacted). https://www.usglc.org/the-budget/; https://www.congress.gov/crs-product/R48624
  11. NPR, "USAID officially shuts down and merges remaining operations with State Department," July 1, 2025. https://www.npr.org/2025/07/01/nx-s1-5451372/usaid-officially-shuts-down-and-merges-remaining-operations-with-state-department
  12. KFF, "U.S. Foreign Aid Freeze & Dissolution of USAID: Timeline of Events," 2025 (Executive Order 14169; freeze timeline). https://www.kff.org/global-health-policy/u-s-foreign-aid-freeze-dissolution-of-usaid-timeline-of-events/
  13. American Foreign Service Association, "The Foreign Service by the Numbers," 2025 (State Department headcounts). https://afsa.org/foreign-service-numbers
  14. U.S. Federal Trade Commission, "FTC Sues to Block Lockheed Martin's Acquisition of Aerojet Rocketdyne," 2022. https://www.ftc.gov/news-events/news/press-releases/2022/01/ftc-sues-block-lockheed-martins-799-billion-acquisition-aerojet-rocketdyne
  15. CNBC / PitchBook, "Defense-tech venture funding and private valuations, 2025–2026" (Anduril, SpaceX, Shield AI, Saronic, Peraton). https://www.cnbc.com/defense/
  16. iShares (BlackRock), U.S. Aerospace & Defense ETF (ITA), and State Street SPDR, S&P Aerospace & Defense ETF (XAR), 2026. https://www.ishares.com/us/products/239502/; https://www.ssga.com/us/en/individual/etfs/spdr-sp-aerospace-defense-etf-xar
  17. Devex / DevelopmentAid, "Chemonics received over 100 US govt terminations" and "Top USAID contractors" (Chemonics/DAI scale, USAID dependence, 2025 terminations). https://www.devex.com/; https://www.developmentaid.org/news-stream/post/141002/top-usaid-contractors-for-2021
  18. Tetra Tech, Form 10-K, FY2025 (USAID ≈ 10.6% of revenue), and ICF International, Form 10-K, 2025 (international-government clients ≈ 7% of revenue). https://www.sec.gov/Archives/edgar/data/831641/000083164125000032/ttek-20250928.htm; https://www.sec.gov/Archives/edgar/data/1362004/000119312526082536/icfi-20251231.htm