The North American Industry Classification System represents a collaborative effort between the United States, Canada and Mexico to commonly classify industries. Here in the U.S. it replaced the very outdated Standard Industrial Classification system more than a decade ago. NAICS categorizes each business or
establishment into a detailed industry based on the production processes it uses. If you regularly read our publications, you’ll be familiar with some of the “supersector” NAICS groupings, such as construction or leisure/hospitality services. Here at the Department of Workforce Services, economists analyze employment data using NAICS simply because that is how U.S. detailed statistical information is collected and classified by federal directive.
The Apples and Oranges Analogy - Why the talk about apples and oranges in the same breath as industry classification? Both the NAICS structure and the economic/industry cluster system embody ways of organizing and classifying industries. Both are metaphorically fruit.
Yet, these two systems are very different. NAICS was designed as a statistical method of organizing production activity for statistical agencies. Read the entire article
here.
