The 1930s to 1980s - SIC Era
In the late 1930s, SIC or Standard Industrial Classification first came into existence when the Interdepartmental Committee on Industrial Classification was established to develop a classification system.
It was initially used to track industries and classify establishments, covering most economic activities. It provided standardized data for analyzing the US economy. The first classification of manufacturing industries was released in 1941, and the non-manufacturing classification came into force the next year. It underwent revisions in 1958, 1963, 1967, 1972, 1977, and 1987 to keep pace with changes in the economy, recognize significant new categories, and eliminate ones that were not traded anymore. The Standard Industrial Classification was last revised by the Office of Management and Budget (OMB) in 1987.
The Creation of a New Coding System
An International Conference on the Classification of Economic Activities was held in 1991 to explore new ways of classifying economic activities. With the emergence of new approaches to classifying economic activities, the Office of Management and Budget established the Economic Classification Policy Committee (ECPC) in 1992. In 1993, a notice was issued by OMB announcing its intention to revise SIC for 1997. In 1994, OMB, along with Mexico's Instituto Nacional de Estadística y Geografía (INEGI) and Statistics Canada, announced plans to develop a new industry classification system. The Economic Classification Policy Committee (ECPC), in consultation with outside users, prepared a number of papers for classification.
1997- The Start of NAICS
In 1997, ECPC joined with Mexico's INEGI and Statistics Canada to establish the NAICS or North American Industry Classification System. This system was developed cooperatively by the U.S., Canada, and Mexico in order to provide new comparability in statistics about business activities across North America. This system of classification was also created to serve as a replacement for the US' 1987 SIC system. In Mexico, it replaces the 1994 Mexican Classification of Activities and Products, and in Canada, it replaces 1980 SIC.
In April 1997, after an official notice was issued by the US census bureau, NAICS came into force, and the transition from SIC to NAICS was started by the statistical agencies.
Since April 1997, this six-digit codes classification system has been used to classify business establishments when federal agencies analyze statistical information. The NAICS is assessed every five years to reflect the changes and developments in the economies of the US, Mexico, and Canada. It was amended in 2002, 2007, and 2012. The first version issued in 1997 offered enhanced coverage of the service sector. The 2002 version modified 6 sectors and reduced the number of industries.
The latest edition of the NAICS was issued in 2017. It comprises 1,057 industries and 20 sectors.
NAICS Today and Beyond
Today's NAICS structure focuses on one prime objective – to create or modify industries to reflect the changing, evolving, and dynamic technologies and activities. The structure of NAICS will keep evolving and becoming better to strive for greater global comparability.