National Security and International Affairs (NAICS 9281): An Investor's Primer

This is a rollup page. In the North American Industry Classification System (NAICS) — the standard used to categorize the U.S. economy — a four-digit code names an industry group. Code 9281, "National Security and International Affairs," sits inside sector 92 (Public Administration) and subsector 928, and it contains two five-digit industries: 92811 National Security (the military and defense establishment) and 92812 International Affairs (diplomacy, foreign aid, and the international bodies based here). This page's job is the contrast between them; for depth, follow the child primers.

1. Overview

NAICS 9281 groups two arms of the U.S. government's outward-facing activity: defending the country (national security) and conducting relations with other countries (international affairs). Neither is a business in the ordinary sense — both are government functions, funded by congressional appropriations rather than by selling anything. So there is no stock called "9281," and standard business statistics barely register the group at all.[1][2]

Why an investor should care about two government functions is the same in both cases and different in scale: each sits at the head of a large private ecosystem that lives or dies 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. When defense spending rises, defense-industry revenue rises with it; when the foreign-affairs budget is cut, aid-contractor revenue collapses with it. You cannot own the function — you own the suppliers exposed to it.

The single most important fact about this group is that its two halves could hardly be more different as investments. One is enormous, growing, and richly investable through public markets; the other is small, politically fragile, shrinking after a 2025 gutting, and has essentially no pure public play. The rest of this page draws out that contrast.

2. What's inside — the two industries and how they differ

NAICS is a nested hierarchy: sector (2-digit) → subsector (3-digit) → industry group (4-digit) → industry (5-digit) → national industry (6-digit). Industry group 9281 splits into two five-digit industries, each of which happens to have a single six-digit child (so 92811 = 928110 and 92812 = 928120; the five- and six-digit codes describe the same activity).[3][4]

The two are best understood side by side. Figures below are budget- and personnel-based (there is no NAICS "revenue" for either — see Section 3), and the shares are approximate, drawn from the federal budget functions each maps to.

The headline contrast: within 9281, defense is roughly fifteen-to-twenty times larger than international affairs by budget, is growing while diplomacy/aid is shrinking, and offers a real public investable universe where international affairs offers almost none. An allocator who "buys 9281" is, in practice, buying defense — with a thin, politically driven aid-services tail attached.

3. Size of this level

A statistics caveat first — and it applies to the whole group. Our ingested ground-truth dataset for NAICS 9281 contains no metrics at all — no establishment, employment, payroll, or receipts figure.[1] That is by design, not omission: 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] An industry group made almost entirely of governments and international bodies is nearly invisible in private-business data, so no NAICS revenue or establishment figure exists at 9281 or at either child. Because each five-digit industry equals its one six-digit child, the same blank applies all the way down.

Every size figure below therefore comes from budget and personnel data, labeled as such, and is agency- or budget-wide rather than "revenue of NAICS 9281." Read together, they show a group whose two halves are wildly different in scale:

• The money (defense). National-defense total (budget function 050): ~$1,011.9B for the FY2026 request; DoD total ~$961.6B; procurement ~$153.3B; research, development, test & evaluation ~$142.0B — 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 ~$62.7B in FY2024, the FY2026 request sought to cut it to ~$31.2B, and Congress enacted ~$50B; broad foreign-assistance obligations were ~$99.9B in FY2023.[8][9][10][11]
• The people. Defense: roughly 1.32–1.33 million active-duty service members plus ~700,000–800,000 civilians (~2 million total, close to half the federal workforce), with reserves and the National Guard adding over a million more.[7] International affairs: before the 2025 reorganization, State had more than 14,000 Foreign Service and ~13,000 civil-service employees plus over 31,000 locally hired staff; the World Bank alone employs more than 10,000.[14]

Undercount caveat. Because both halves are government functions with a single (or single-agency) "owner," ordinary business tallies undercount them to essentially zero, and any commercial location count for the international-affairs code (one aggregator lists ~740 U.S. locations) 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, 9281 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 across the children

The two children point to almost completely different pools of companies, and the value is lopsided toward defense.

• National security (92811) — a deep public menu. Value concentrates in the defense industrial base (DIB), the private supply chain that sells to DoD. The publicly traded primes include Lockheed Martin (LMT), RTX (RTX), General Dynamics (GD), Northrop Grumman (NOC), Boeing (BA), L3Harris (LHX), and Huntington Ingalls (HII). A services / information-technology (IT) tier includes Leidos (LDOS), Booz Allen Hamilton (BAH), CACI (CACI), SAIC (SAIC), and Palantir (PLTR). The highest-growth, highest-valuation names — Anduril, SpaceX (Starshield), Shield AI, Saronic, and PE-owned contractors such as Peraton — are still private, reachable only through venture, pre-initial-public-offering (pre-IPO), or secondary channels.[5][16]
• International affairs (92812) — 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: Tetra Tech (TTEK) and ICF International (ICFI) carry the most aid-program sensitivity, and broad government-services primes — Leidos (LDOS), SAIC (SAIC), Booz Allen (BAH), CACI (CACI), KBR (KBR), Amentum (AMTM) — carry a small, resilient slice. The deepest, purest exposure sits in privately held implementing partners (Chemonics, DAI Global, Abt Global) and non-profits, most employee-owned and not buyable on an exchange.[18][19]

Bottom line for allocators. The investable weight of 9281 is in defense, and defense offers ample public routes — you need not go private for exposure, though the marquee growth names are private for now. International affairs adds little tradable value and is better treated as a risk exposure to monitor inside diversified holdings than as an allocation of its own. (Tickers are exposure markers; company figures in the child primers are company-wide and blend commercial and civil-government work.)

5. How the money works

Both children run on the same two-track logic — a government "core" that earns nothing and a contractor "edge" where investors earn — but the tracks behave very differently across the two.

• The government core (no profit, either side). Congress appropriates; "success" is measured in budget authority, obligations (money legally committed), and outlays (money actually paid), not revenue or margin. Investors here are watching the demand signal, not earning from it. The difference is stability: defense budgets grind upward with broad bipartisan support, whereas 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]
• The contractor edge (where investors earn). In both cases 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. The vocabulary is shared — obligation vs. outlay, backlog and book-to-bill, and contract type (firm-fixed-price vs. cost-reimbursement, i.e. "cost-plus") driving margin and risk. Mature defense primes run program margins around 10–12% on long "programs of record" with a lucrative sustainment tail; aid implementers historically ran on thin, stable cost-plus margins and are shifting toward fixed-price work to lift them. The decisive difference is customer-concentration risk: defense firms sell to one buyer across many programs, while some aid firms drew nearly all revenue from a single funder — spectacular while the money flowed, catastrophic when it stopped.[6][18]

This is where investable-universe language — dividend yields, valuation multiples, earnings per share — genuinely applies. The government functions themselves have none of it.

6. Demand drivers

Demand across 9281 is policy demand, set by threat perception and politics rather than the ordinary business cycle — but the politics push the two halves in opposite directions.

• National security. Strategic competition with China and Russia, the war in Ukraine, and Middle East conflict; the budget cycle set by the National Defense Authorization Act (NDAA) and appropriations; and a modernization wave — nuclear recapitalization, missile defense, hypersonics, munitions replenishment, shipbuilding, space, autonomy, and artificial intelligence (AI). Structurally supported and expanding, though budget growth converts to contractor revenue slowly.[5]
• International affairs. The same geopolitics can raise the case for diplomacy and aid, but the budget is a perennial cut target because it is small and lacks a domestic constituency; embassy construction and security add a steadier line. Underlying demand for the capability is durable, but the private revenue opportunity is uneven and politically timed — 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 whole group the regulatory environment is the operating environment, and the framework is largely shared. Spending in both halves requires enacted appropriations, with continuing resolutions (CRs) — stopgaps that freeze funding at prior levels — a recurring drag. Contracting on both sides runs under the Federal Acquisition Regulation (FAR) (defense adds the DFARS supplement), with contract-type rules and government audit. Private suppliers to both 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 under the Vienna Conventions and, in 2025, executive action (Executive Order 14169) that froze aid and unwound USAID.[13] Full detail sits in the child primers.

8. Consolidation

Both halves are shaped by a near-monopsony government buyer, but their market structures are moving in opposite ways.

• Defense is the product of decades of consolidation — major U.S. primes fell from 51 to 5 by the early 2000s, and those five were prime on more than 74% of major acquisition programs as of 2023. Two counter-currents now reshape it: regulators resist further prime-level mergers (the Federal Trade Commission blocked Lockheed Martin's bid for Aerojet Rocketdyne in 2022), and software-first neo-primes (Anduril, SpaceX, Palantir, Shield AI) are challenging the legacy model.[6][15][16]
• International affairs consolidated violently and involuntarily in 2025: USAID's 80%-plus program cancellations wiped out much of the pure-play development-contracting market (Chemonics lost 90-plus contracts; DAI cut hundreds of staff), rewarded diversified federal primes, and are likely to push distressed development assets toward diversified or foreign buyers.[12][18]

9. Risks

The two children share a risk type — dependence on one appropriations process — but not its severity.

• Common to both: budget/political risk (the sector rides one funding process), customer concentration on a single buyer, contract and working-capital risk (recompetes, protests, stop-work orders, terminations), compliance risk (ITAR, OFAC, audits, debarment), and cleared/field-workforce constraints.
• Where they diverge: for defense, the sharpest risks are program-execution losses (fixed-price development has produced large losses, notably at Boeing) and stretched valuations in private defense-tech, which some observers warn shows bubble characteristics — but the funding base is stable and growing. For international affairs, the dominant risk is policy/appropriations risk that is largely unhedgeable: a single election, executive order, CR, reorganization, or rescission can halve or gut the funding, as 2025 proved, and the field also carries country and security risk abroad.[5][13][18]

The core analytical mistake, common to both, is treating backlog or budget headlines as guaranteed profit. Funding, execution, cost structure, and cash collection determine the outcome — and for aid, a political decision can erase the backlog outright.

10. How to invest and outlook

Practical approach across the group. Treat 9281 as "defense plus a thin aid-services tail," because that is what its dollars are.

• National security (the investable core). Individual primes (LMT, RTX, NOC, GD, LHX) for dividend-paying exposure; services/IT names (LDOS, BAH, CACI, SAIC); defense-tech via Palantir (PLTR) and smaller drone/autonomy names; and diversified ETFs — the iShares U.S. Aerospace & Defense ETF (ITA) and the SPDR S&P Aerospace & Defense ETF (XAR), both blending commercial aerospace with defense, at expense ratios around 0.35–0.38%. Private routes: defense-tech venture/growth funds, pre-IPO/secondary access to marquee names (generally accredited-investor only), and PE ownership of the services base.[16][17]
• International affairs (a risk factor, not an allocation). No ETF tracks it and there is no pure play. Sort public exposure by purity — more aid-sensitive names (ICFI, TTEK) versus broad primes where aid is a small, resilient slice (LDOS, SAIC, BAH, CACI, KBR, AMTM) — and treat aid-heavy revenue as something to diversify away from. The purest exposure (Chemonics, DAI, Abt Global, the non-profit world) is largely not publicly investable.[18][19]

Outlook. The two halves point in opposite directions. Defense enjoys an unusually strong backdrop — record nominal budgets near $1 trillion, bipartisan support, allied re-armament, and a modernization tilt toward autonomy, AI, space, and munitions — offset by modest real (inflation-adjusted) growth, an appropriations process hostage to CRs, slow award-to-revenue conversion, and stretched private-market valuations. International affairs faces durable underlying demand but volatile, shrinking funding, with the strongest suppliers distinguished by scarce expertise, trusted relationships, strong compliance, and diversified award mechanisms. There is no defensible growth rate or revenue estimate for NAICS 9281 itself — the government-operated group 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.

→ For the full detail on each half, read the child primers: NAICS 92811 (National Security) and NAICS 92812 (International Affairs).

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Sources

1. Provided federal statistics file, Ingested Official Stats — NAICS 9281 (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" (definition and exclusions to 928110 / 926110 / 813910). 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, procurement, RDT&E). 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; 74% of programs). 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. Congressional Research Service, "U.S. Foreign Assistance" (IF10183), 2025 (FY2023 foreign-assistance obligations ≈ $99.9B). https://www.congress.gov/crs-product/IF10183
12. 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
13. 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/
14. American Foreign Service Association, "The Foreign Service by the Numbers," 2025, and Wikipedia, "World Bank Group," 2025 (State and World Bank headcounts). https://afsa.org/foreign-service-numbers; https://en.wikipedia.org/wiki/World_Bank_Group
15. 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
16. CNBC / PitchBook, "Defense-tech venture funding and private valuations, 2025–2026" (Anduril, SpaceX, Shield AI, Saronic, Peraton). https://www.cnbc.com/defense/
17. 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
18. Devex / DevelopmentAid, "Chemonics received over 100 US govt terminations" and "Top USAID contractors" (Chemonics/DAI scale, USAID dependence, 2025 terminations and layoffs). https://www.devex.com/; https://www.developmentaid.org/news-stream/post/141002/top-usaid-contractors-for-2021
19. 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