Say Farewell to the Old Standby, SIC

Say Farewell to the Old Standby, SIC

By John Makulowich
Contributing Writer

In case you missed it, there's a new industry classification system just around the corner that the Clinton administration announced on April 8.

Known as NAICS, the North American Industry Classification System, it will replace the old standby SIC, or Standard Industrial Classification. That system has been used by federal, state and local governments, the business community and the general public since the 1930s.

NAICS is set to come on stream with data for 1997 in Canada and the United States; Mexico will follow with data in 1998. The United States will start NAICS this year with the Census Bureau's 1997 Economic Census and the first statistics from this data will be published in early 1999.

Why change, you ask? Well, the new system, NAICS, will let the three trading partners, the United States, Mexico and Canada, in the North American Free Trade Agreement, or NAFTA, improve the comparison of economic and financial statistics as well as ensure that those statistics keep up to speed with the changing economy. In fact, NAICS will replace the NAFTA partners' separate systems with a uniform one for classifying industries. In principle, NAICS promises to be a more flexible system that should allow "more informed economic and trade policies, more profitable business decisions and more cogent public discussion and debate," according to the Clinton administration announcement.

The United States, Canada and Mexico plan to update the system every five years. Compared to the old SIC, NAICS will mirror the significant changes in technology as well as the growth in services over the last several years. For example, new NAICS additions include the Information Sector, the Health Care and Social Assistance Sector and the Professional, Scientific and Technical Services Sector.

The Information Sector covers industries that create, distribute or offer access to information. These include satellite, cellular and pager communications, online services, software and database publishing, motion picture, video and sound recording, and radio, television and cable broadcasting.

Health Care and Social Assistance organizes industries by intensity of care and includes new industries, such as HMO medical centers, outpatient mental health care and elderly continuing care.

Professional, Scientific and Technical Services recognizes industries that rely primarily on human capital. These cover legal, architectural, engineering, interior design and advertising services.

For those who are curious to see the new classifications in action, there are two Adobe Acrobat pdf formatted documents that show you conversions from SIC to NAICS and from NAICS to SIC. (You need Adobe's Acrobat Reader 3.0 to view them if you don't own the software.) You can find the lists at these URLs: http://www.census.gov/epcd/naics/naicsfr8_tb1.pdf and http://www.census.gov/epcd/naics/naicsfr8_tb2.pdf. The information is also available in HTML, ASCII, WordPerfect and dBase III formats.

For instance, the 1997 NAICS Code for Information is 51 and ranges to 51421 for Data Processing Services. Computers you find under Code 54, specifically 5415, Computer Systems Design and Related Services. Under 541511 is Custom Computer Programming Services, the old SIC 7371, while 541512 is the category of Computer Systems Design Services.

John Makulowich writes, talks and trains on the Internet. You can reach him at john@journalist.com; his home page is http://www.cais.com/makulow/.



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