Purpose of NAICS
Here are the primary purposes of NAICS, each with a detailed explanation:
- Data Collection and Analysis: NAICS provides a standardized framework for collecting economic data. It helps government agencies, businesses, and researchers gather and analyze data on industries, enabling a better understanding of economic trends, performance, and the overall business landscape.
- Comparative Analysis: NAICS allows for the consistent comparison of industries across North American countries, including the United States, Canada, and Mexico. This comparability is essential for making international and regional economic assessments and decisions.
- Government Policy and Regulation: Government agencies use NAICS to develop, implement, and regulate policies and regulations. It assists in determining specific industry needs and challenges, ensuring that regulations are tailored to the characteristics of different sectors.
- Resource Allocation: NAICS helps governments and organizations allocate resources more effectively. By categorizing industries based on similarities in production processes, it aids in directing funding, support, and resources to areas that need them the most.
- Market Research: Businesses, market researchers, and investors use NAICS codes to segment industries. This segmentation is useful for market research and identifying target markets, enabling more focused and effective marketing and investment strategies.
- Business Planning and Strategy: Companies use NAICS codes to understand their position within their industry and to identify key competitors and trends. This information is vital for business planning, strategy development, and staying competitive.
- Labor Market Analysis: NAICS allows for the classification of jobs and occupations by industry. This is useful for understanding the labor market, assessing employment trends, and making informed decisions related to workforce development and training.
- Trade and International Commerce: NAICS codes are used in international trade to categorize products and services for tariff classification and trade negotiations. They play a significant role in determining customs duties and trade agreements between countries.
North American Industry Classification System (NAICS) in Software Development
The North American Industry Classification System (NAICS) is a standardized industry classification system used by the United States, Canada, and Mexico. NAICS is a hierarchical system that helps in the classification of businesses into 20 sectors, 87 subsectors, and 346 industry groups based on their primary activities. NAICS codes are used by businesses to identify themselves, and by government agencies to collect and analyze data on the economy.
Table of Content
- What is NAICS?
- Why NAICS?
- How can businesses determine the correct NAICS code?
- Who has the authority to assign NAICS codes to businesses and how?
- How do Industries use NAICS?
- What is the NAICS index and its corresponding entries?
- Purpose of NAICS:
- Businesses engaged in Custom Computer Programming Services:
- Conclusion