Industry classification
A standard system that assigns companies to industries by main activity, which makes data comparable across sources.
What it means
Industry classification codes group firms by what they do. Examples include NAICS, used in North America, and ISIC, the United Nations system. Government statistics, financial data and market reports often use these codes, so they make it possible to combine sources without guessing which companies belong together.
Codes are not perfect. A company can operate in several activities but receive one code, and private firms are sometimes classified by a broad label. Different databases also use different schemes. When you compare market sizes across reports, check which classification each one uses, and map the codes before you add figures together. Keep a note of the mapping, with the version and date, so the next analyst can repeat the work.
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Cite this entry
https://marketintelligenceplatform.com/glossary/industry-classification/