Are you looking to understand how industries are classified and analyzed? The Standard Industrial Classification (SIC) might just be what you need.
SIC is a system of classifying industries based on the type of economic activity they engage in. This system was established in the United States in 1937 and has since been adopted by other countries around the world.
Industry classification is important for business classification, market research, market segmentation, and industry analysis. It helps businesses identify their competitors, target markets, and new opportunities. It also helps governments track economic growth, make policy decisions, and allocate resources.
SIC groups industries into ten broad sectors based on their economic activity. Each sector is further divided into subsectors and industries based on specific criteria such as production processes, end products or services, and technology used.
Using SIC can help businesses:
Since its inception, SIC has undergone several revisions to reflect changes in the economy and business practices. In 1997, the North American Industry Classification System (NAICS) replaced SIC in the US. NAICS uses a similar methodology but is updated every five years to reflect changes in the economy.
One limitation of SIC is that it does not always accurately reflect the current state of an industry or company. Changes in technology or business practices may render certain classifications obsolete or inaccurate. Additionally, different countries may have different classification systems that cannot be easily compared.
