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North American Industry Classification System

religious activities, grant making, advocacy, laun- UN’s Statistical Commission revised the ISIC structure
dry, personal care, death care, and other personal and codes in 1958, 1968, and 1989.
services. Similar to NAICS, ISIC primarily classifies establish-
91–93 Public Administration. Administration, ments (rather than enterprises and firms). The criteria
management, and oversight of public programs used to classify ISIC division and groups are:
by federal, state, and local governments with
• The type of goods and services produced
executive, legislative, and judicial authority.
• The uses of goods and services produced
EXAMPLE • The inputs, process, and technology of production
NAICS code 711211 identifies the Sports Teams and
The third classification criterion of the ISIC is the concep-
Clubs industry in the United States and Canada. It tual foundation of NAICS. Hence, NAICS is aligned
belongs to: more closely with ISIC than the 1987 SIC system. Statis-
Sector 71—Arts, Entertainment, and Recreation tics compiled on NAICS are comparable with statistics
compiled according to ISIC, Revision 3.
Subsector 711—Performing Arts, Spectator Sports,
and Related Industries
REVISION OF NAICS
Industry Group 7112—Spectator Sports
NAICS is more timely than the SIC system it replaced
NAICS Industry 71121—Spectator Sports because of its revision process every five years. Revisions to
National Industry 711211—Sports Teams and NAICS are made in consideration of its four principles:
Clubs
1. Production-oriented classification
The NAICS: United States, 2002 manual gives a detailed 2. Special attention to new and emerging industries,
description of the Sports Teams and Clubs industry in the service industries, and industries involved in the
three countries. production of advanced technology
3. Time series continuity when possible
ASSIGNMENT OF NAICS CODES
4. Compatibility with the two-digit level of the ISIC
NAICS is a classification system for establishments.
NAICS: United States, 2002 defines an establishment as As scheduled, NAICS: United States, 1997 was revised
“the smallest operating entity for which records provide to become NAICS: United States, 2002. NAICS: United
information on the cost of resources—materials, labor, and States, 2002 included revisions to the structures of the
capital—employed to produce the units of output.” In the Construction and Information sectors and additional
United States the establishment is generally a single physi- detail in the Retail Trade sector.
cal location using a distinct process to produce goods or The revision process for the 2007 NAICS began
services. An enterprise (company) may consist of more than when the OMB published a Federal Register Notice in
one establishment. Each establishment within the enter- March 2005 seeking comments on the ECPC proposals,
prise is assigned a NAICS code. Statistical agencies such as which were due by June 9, 2005. Proposals include sepa-
the Census Bureau and the BLS assign NAICS codes based rating the Telecommunications subsector into three
on information reported to them on administrative, survey, groups (wired, wireless, and satellite), as well as a fourth
and census reports. The Census Bureau assigns a NAICS group for other telecommunications services. Another
code to each establishment based on its primary activity. proposal creates a separate industry for Biotechnology
Research and Development, distinct from Research and
INTERNATIONAL COMPARABILITY Development in the Physical, Engineering and Other Life
Sciences. These proposals reflect emerging industries and
Comparable data for the United States, Canada, and Mex-
advanced technology.
ico are generally available at the five-digit NAICS indus-
try level. The sixth digit of the NAICS code is used to
define national industries, which differ among the three NAICS AND THE NORTH
countries because of differences in economic and organi- AMERICAN PRODUCT
zational structures. CLASSIFICATION SYSTEM
Many other countries collect data using the Interna- The North American Product Classification System
tional Standard Industrial Classification (ISIC) system (NAPCS) is a ten-digit code that denotes the principal
established by the United Nations (UN) in 1948. The products and services of an industry. It extends the six-

546 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION