NAICS Codes
NAICS Codes represent a well intended, but flawed, group effort to incrementally improve SIC codes, which were defined in the 1930's to define business establishments by industry. Like many well-intentioned government programs that grow beyond their usefulness, NAICS codes need to be replaced by a better system with a superior industry taxonomy and a greatly improved business process design. We suggest the Global Industry Dashboard [TM] using the Global Industry Dashboard Business Process Design [SM].
The Global Industry Dashboard industry taxonomy is different from NAICS codes in four significant ways:
1. The Global Industry Dashboard is purely global in design
2. The industry taxonomy leverages the ideas of Michael Porter and his Porter 5 forces analysis for defining each industry.
3. The global industry classification system is used to normalize company data into its line-of-business components, thereby enabling side-by-side company comparisons at the line-of-business level.
4. Industries are analyzed independently - they are not fixed to a single hierarchical structure like NAICS. Industries can be grouped into researcher-defined industry groups.
If you want more information on NAICS codes:
NAICS Definition - The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy
NAICS Development Mandate - NAICS was developed under the auspices of the U.S. Office of Management and Budget (OMB)
NAICS Developers - NAICS was developed by the U.S. Economic Classification Policy Committee (ECPC), Statistics Canada , and Mexico's Instituto Nacional de Estadistica, Geografia e Informatica, to allow for a high level of comparability in business statistics among the North American countries
NAICS Usage For Defining A Company - The U.S. Census Bureau assigns and maintains only one NAICS code for each establishment based on its primary activity, generally the activity that generates the most revenue for the establishment. An establishment refers to one physical location that produces or distributes goods or performs services. A company or enterprise that has more than one location may assign an additional NAICS code for each establishment based on the primary activity of each location.
NAICS Intended Geographic Usage: The NAICS provides a consistent system for economic analysis across the three North American Free Trade Agreement partners:
- Canada
- Mexico
- United States.
NAICS Replaces SIC - The North American Industry Classification System (NAICS) was adopted in 1997 to officially replaced the U.S. Standard Industrial Classification (SIC) system.
NAICS intended users:
- Government policy analysts
- Academics and researchers
- Business community
- Public
NAICS Sales Pitch by the Department of Commerce / Bureau of Census: "NAICS will reshape the way we view our changing economy."
NAICS official website maintained by United States Government: http://www.ntis.gov/products/naics.aspx