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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.

IndustryNAICS 92811Public Administration

National Security (NAICS 92811): An Investor's Primer

1. Overview

In the North American Industry Classification System (NAICS) — the standard the U.S. Census Bureau uses to categorize economic activity — a five-digit code names a NAICS industry. Code 92811, "National Security," is one such industry, and it is unusual in a specific way: it contains exactly one six-digit child, 928110, also called "National Security." At this level the category is therefore effectively identical to that single child. Everything the five-digit rollup describes, the six-digit code describes in full detail.

What it describes is not a private industry in the ordinary sense. Census defines 928110 as "government establishments of the Armed Forces, including the National Guard, primarily engaged in national security and related activities" [2]. In plain terms, this code is the U.S. military and defense establishment — the Army, Navy, Air Force, Marine Corps, Space Force, National Guard, bases, and the command apparatus that runs them.

Why an investor should care about a government function: it is the single largest customer in the U.S. economy. The government does not build its own fighter jets, warships, missiles, satellites, or defense software; it buys them from a private supply chain — the defense industrial base (DIB). That outward spending, not the government function itself, is what an investor can own — through public defense primes, government-technology and services contractors, and sector funds, or privately through venture capital (VC), private equity (PE), private credit, and venture-backed "defense-tech" firms.

This page is a short rollup. Because 92811 equals its one child, we keep it brief and point you to the 928110 primer for the full treatment — scope, the investable universe, contract economics, regulation, consolidation, risks, and how-to-invest detail.

2. What's inside — and why the level 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). Most five-digit industries fan out into several six-digit children. A few do not. Code 92811 is one of the "does not" cases: it has a single child.

NAICS industry (5-digit) Child national industry (6-digit) Relationship
92811 National Security 928110 National Security One-to-one; the rollup carries no activity the child does not

Because there is only one child, aggregating "all children of 92811" just reproduces 928110. There are no siblings to blend, no mix to weigh, and no rollup-only activity. The five-digit code exists to keep the classification tree consistent, not to describe a broader grouping.

It sits inside industry group 9281, "National Security and International Affairs," whose other five-digit member is 92812 International Affairs (the State Department and foreign-aid function) — a separate industry, not part of 92811. Related activity that investors sometimes confuse with defense — veterans' benefits (923140), courts/police/prisons/fire (922xxx), and civil space such as NASA (927110) — also lives outside this code [2][3].

For anything below the headline — what the code includes and excludes, the ownership models (government-owned/government-operated, government-owned/contractor-operated, contractor-owned/contractor-operated, and the nonprofit/academic federally funded research and development centers) — see 928110, Section 2.

3. Size of this level

A statistics caveat first. Our ingested ground-truth dataset for NAICS 92811 contains no metrics at all — no establishment, employment, payroll, or receipts figure [1]. That is not an omission: standard Census/Small Business Administration business statistics (Statistics of U.S. Businesses, County Business Patterns, nonemployer counts) exclude Public Administration (sector 92) and most government employees [4][5], and the government does not report itself as "businesses." Every size figure below therefore comes from budget and personnel data, labeled as such — not from the business census. And because a single-owner government function has no commercial "establishment count," ordinary business tallies undercount this activity to essentially zero, while its private supply chain is scattered across manufacturing and services codes rather than counted here.

Because 92811 equals 928110, the child primer's rollup figures are this level's figures. The clearest gauges (all from the child primer):

  • Federal defense budget (fiscal year 2026 request, Department of Defense Comptroller): national-defense total (budget function 050) $1,011.9B; DoD total $961.6B; procurement $153.3B; research, development, test & evaluation (RDT&E) $142.0B — a nominal record approaching $1 trillion [6].
  • People: roughly 1.32–1.33 million active-duty service members in 2025 plus on the order of 700,000–800,000 civilian employees (~2.06 million total, close to half the federal workforce), with reserve and National Guard components adding well over a million more [25].
  • Supplier flow: DoD contract obligations of about $445 billion in FY2024, split roughly 54% services / 46% goods, across a private base estimated at ~200,000 companies [7][9][10].

None of these is "revenue of NAICS 92811" — budget lines are requests and obligations are money committed to outside suppliers — but together they show this is one of the largest single economic activities in the country, registering as government spending rather than as a commercial industry.

4. Investable universe — where value concentrates

Because 92811 (via 928110) is a buyer, the investable universe is the set of companies that sell to it. With only one child, there is no "which sibling holds the value" question — all of it sits in the same defense supply chain. Value concentrates in a few tiers (see 928110, Section 4 for the full company-by-company table; figures there are company-wide, not 92811-specific, and blend commercial aerospace and civil-government work):

  • Publicly traded primes: Lockheed Martin (LMT), RTX (RTX), General Dynamics (GD), Northrop Grumman (NOC), Boeing (BA), L3Harris (LHX), Huntington Ingalls (HII). The five largest DoD contractors captured about 30% of contract obligations in FY2024; the top 100 captured roughly 63% [7].
  • Services / IT and software: Leidos (LDOS), Booz Allen Hamilton (BAH), CACI (CACI), SAIC (SAIC), Palantir (PLTR), Amentum (AMTM).
  • Private and venture-backed "neo-primes": Anduril, SpaceX (Starshield), Shield AI, Saronic, plus PE-owned contractors such as Peraton and Sierra Nevada — the highest-growth, highest-valuation stories, generally reachable only through private, pre-IPO, or secondary channels [23][24][25][21][21].

Bottom line for allocators: there are ample public plays — you need not go private for exposure — but the marquee growth names are private for now.

5. How the money works

Two distinct "money" stories sit inside this one code, exactly as in the child.

  • The government side (no profit). The function is funded by congressional appropriations, not revenue. Its "unit economics" are readiness, force structure, and cost per capability. Investors earn nothing here; they track it as the demand signal.
  • The contractor side (where investors earn). Congress authorizes and appropriates → DoD contracts → a prime wins and subcontracts → revenue is recognized on delivery → cash arrives via progress, milestone, or recurring billing. The concepts that matter — obligation vs. outlay, backlog and book-to-bill, contract type (firm-fixed-price vs. cost-reimbursement) driving margin and risk, and the long sustainment tail of a "program of record" — are covered in full in 928110, Section 5 [11][12]. Mature primes run program margins around 10–12%; funded backlog, contract mix, and free-cash-flow conversion are the core signals.

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

6. Demand drivers

Demand is set by threat perception and politics, not the ordinary business cycle: 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 separate appropriations; a modernization wave (nuclear-triad recapitalization, missile defense, hypersonics, munitions replenishment, shipbuilding, space, and a heavy tilt toward RDT&E, autonomy, and artificial intelligence); and industrial-base policy under the 2024 National Defense Industrial Strategy [6][9][10]. Demand should stay structurally supported but will not move smoothly — budget growth converts to awards and contractor revenue slowly. See 928110, Section 6.

7. Regulation

For this sector the regulatory environment is the operating environment. In brief: spending requires both an NDAA and enacted appropriations, with continuing resolutions (CRs) a recurring drag; the Federal Acquisition Regulation (FAR) and its defense supplement (DFARS) govern contracting, audited by the Defense Contract Audit Agency (DCAA) under Cost Accounting Standards; classified work runs under the National Industrial Security Program, with the Cybersecurity Maturity Model Certification (CMMC) DFARS rule effective November 10, 2025; and export controls (International Traffic in Arms Regulations, Export Administration Regulations), domestic-sourcing rules (Berry Amendment), and foreign-investment review (the Committee on Foreign Investment in the United States, CFIUS) shape who can compete [11][12][13][14][15][16]. Full detail is in 928110, Section 7.

8. Consolidation

The DIB behaves like a monopsony — for many products the federal government is effectively the only buyer [9]. The prime tier is the product of decades of consolidation: the number of major U.S. defense primes fell from 51 to 5 by the early 2000s, and those five were prime contractors on more than 74% of DoD's major acquisition programs as of 2023 [9]. 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 [24]), and software-first neo-primes (Anduril, SpaceX, Palantir, Shield AI) are challenging the legacy model . See 928110, Section 8.

9. Risks

The same risks apply as to the child, since the two are identical: budget and political risk (the whole sector rides one appropriations process); program and execution risk (fixed-price development has produced large losses, notably at Boeing); customer concentration on a single buyer; supply-chain, cyber, and cleared-workforce constraints; export/ownership limits (ITAR, CFIUS); and valuation/liquidity risk, with some observers warning the private defense-tech boom shows bubble characteristics [6][8][22]. The core analytical mistake is treating backlog or budget headlines as guaranteed profit — funding, execution, cost structure, and cash collection determine the outcome. Full list in 928110, Section 9.

10. How to invest and outlook

Public routes: 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 (KTOS, AVAV); and diversified exchange-traded funds — 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% [23]. Private routes: defense-tech venture and growth funds, pre-IPO/secondary access to marquee names (generally accredited-investor only), and PE ownership of the services base [21].

Outlook. The near-term demand backdrop is unusually strong — record nominal budgets near $1 trillion, bipartisan support, allied re-armament, and a modernization tilt toward RDT&E, autonomy, AI, space, and munitions [6][10]. Offsetting it: modest real (inflation-adjusted) growth, an appropriations process hostage to continuing resolutions, slow award-to-revenue conversion, and stretched valuations — especially in private defense-tech [22]. There is no defensible growth rate or revenue estimate for NAICS 92811 itself, because the government-operated category carries no business statistics [1].

For the full analysis, read the 928110 primer — this five-digit page is a pass-through to it.

Sources

  1. Provided federal statistics file, Ingested Official Stats — NAICS 92811 (no ingested metrics), 2026.
  2. U.S. Census Bureau, "2022 NAICS Definition — 928110 National Security." https://www.census.gov/naics/
  3. U.S. Census Bureau, 2022 NAICS Manual (adjacent manufacturing and services codes). https://www.census.gov/naics/reference_files_tools/2022_NAICS_Manual.pdf
  4. U.S. Census Bureau, Statistics of U.S. Businesses (excludes Public Administration). https://www.census.gov/programs-surveys/susb.html
  5. U.S. Census Bureau, Economic Census (coverage note). https://www.census.gov/programs-surveys/economic-census.html
  6. U.S. Department of Defense, Office of the Under Secretary of Defense (Comptroller), FY2026 Defense Budget Request, 2025. https://comptroller.defense.gov/Budget-Materials/
  7. Congressional Research Service, Defense Primer: Department of Defense Contractors (IF10600), 2025. https://www.congress.gov/crs-product/IF10600
  8. U.S. Government Accountability Office, Defense Industrial Base: Risks from Dependence on Foreign Suppliers (GAO-25-107283), 2025. https://www.gao.gov/products/gao-25-107283
  9. Congressional Research Service, The U.S. Defense Industrial Base: Background and Issues for Congress (R47751), 2024. https://www.congress.gov/crs-product/R47751
  10. Congressional Research Service, The 2024 National Defense Industrial Strategy: Issues for Congress (IN12310), 2024. https://www.congress.gov/crs-product/IN12310
  11. Acquisition.gov, Federal Acquisition Regulation Part 16 — Types of Contracts. https://www.acquisition.gov/far/part-16
  12. Acquisition.gov, Federal Acquisition Regulation Part 30 — Cost Accounting Standards Administration. https://www.acquisition.gov/far/part-30
  13. U.S. Department of Defense, DFARS Subpart 204.75 — Cybersecurity Maturity Model Certification (rule effective Nov. 10, 2025). https://www.acquisition.gov/dfars/subpart-204.75-cybersecurity-maturity-model-certification-(cmmc)
  14. Defense Counterintelligence and Security Agency, 32 CFR Part 117 — National Industrial Security Program Operating Manual (NISPOM) Rule. https://www.dcsa.mil/
  15. U.S. Department of State, Directorate of Defense Trade Controls, International Traffic in Arms Regulations and the U.S. Munitions List; U.S. Bureau of Industry and Security, Export Administration Regulations. https://www.pmddtc.state.gov/
  16. U.S. Department of the Treasury, The Committee on Foreign Investment in the United States (CFIUS). https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius
  17. Anduril Industries, Investor Relations, 2026. https://www.anduril.com/investor-relations/
  18. Blue Origin, New Glenn Awarded National Security Space Launch (NSSL) Phase 3 Lane 2 Contract, 2025. https://www.blueorigin.com/news
  19. SpaceX, Starshield: Supporting National Security, 2026. https://www.spacex.com/starshield/
  20. Peraton (a Veritas Capital portfolio company), corporate/newsroom, 2024. https://www.peraton.com/news/
  21. CNBC / PitchBook, "Defense-tech venture funding and private valuations, 2025–2026" (Anduril, SpaceX, Shield AI, Saronic), 2026. https://www.cnbc.com/defense/
  22. Fortune, "The defense-tech boom has become a bubble — or it will be soon," 2026. https://fortune.com/
  23. iShares (BlackRock), U.S. Aerospace & Defense ETF (ITA) fund page; State Street SPDR, S&P Aerospace & Defense ETF (XAR) fund page, 2026. https://www.ishares.com/us/products/239502/ | https://www.ssga.com/us/en/individual/etfs/spdr-sp-aerospace-defense-etf-xar
  24. 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
  25. 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/