SIC

SIC
Name	SIC
Abbreviation	SIC
Type	Industry classification
Introduced	1937
Used by	United States Department of Commerce, Office of Management and Budget, Securities and Exchange Commission, Internal Revenue Service
Superseded by	North American Industry Classification System

SIC

The Standard Industrial Classification (SIC) is a four-digit numerical code system developed to classify industries for statistical analysis and regulatory purposes. It was created to standardize reporting across agencies such as the United States Department of Commerce, the Securities and Exchange Commission, the Internal Revenue Service, and the Occupational Safety and Health Administration. The SIC system facilitated comparisons among datasets compiled by entities including the Bureau of Labor Statistics, the Census Bureau, and the National Center for Health Statistics.

Definition and Terminology

The SIC assigns four-digit codes to establishments based on primary business activities, aligning with frameworks used by the Bureau of Economic Analysis and historical series maintained by the Federal Reserve Board. Terminology includes divisions, major groups, industry groups, and industry codes, paralleling categorizations in classifications like the Harmonized System and later the North American Industry Classification System. Common metadata terms associated with the SIC appear in filings to regulatory bodies such as the Securities and Exchange Commission and datasets produced by the National Science Foundation.

History and Development

The SIC was promulgated in 1937 by the United States Department of Labor and later consolidated across federal agencies including the Department of Commerce and the Office of Management and Budget. Revisions occurred periodically to reflect structural economic change, with notable updates associated with initiatives from the Office of Economic Opportunity and analytic work at the Bureau of the Census. The rise of service-sector statistics, international trade reporting involving the United States Trade Representative, and technological change prompted critiques that led to the development of successor systems, coordinated through interagency committees involving the National Academy of Sciences and policy inputs from the Congressional Budget Office.

Structure and Classification

The SIC hierarchy begins with broad divisions (alphabetic) subdivided into major groups and industry groups, terminating in four-digit industry codes that map to establishments in registries maintained by the Census Bureau and tax records administered by the Internal Revenue Service. Crosswalks were developed between SIC and taxonomies such as the Standard Occupational Classification and the North American Industry Classification System by agencies including the Office of Management and Budget and analytic centers at the Brookings Institution. Industry codification under SIC appears in filings to the Securities and Exchange Commission, labor statistics compiled by the Bureau of Labor Statistics, and industrial safety classifications administered by the Occupational Safety and Health Administration.

Applications and Uses

SIC codes have been used in statistical reporting by the Census Bureau, regulatory filings to the Securities and Exchange Commission, labor market studies at the Bureau of Labor Statistics, antitrust analysis by the Federal Trade Commission, and occupational injury research by the National Institute for Occupational Safety and Health. Commercial databases maintained by firms like Dun & Bradstreet and financial analysts at institutions such as the Federal Reserve Bank of New York relied on SIC for sectoral comparisons. Historical economic research published through outlets such as the National Bureau of Economic Research and policy analyses by the Economic Policy Institute also exploit SIC-coded series for longitudinal studies.

International Equivalents and Replacements

Internationally, the SIC has parallels and successors, including the International Standard Industrial Classification (ISIC) promulgated by the United Nations Statistical Commission and the regional North American Industry Classification System (NAICS) created through cooperation among the United States Office of Management and Budget, Statistics Canada, and Statistics Mexico. Other national systems with mapping exercises include classification schemes used by the European Union (NACE), the Australian Bureau of Statistics, and the Japan Statistics Bureau, each maintaining concordances to align time series and trade data for organizations like the World Trade Organization and the International Monetary Fund.

Criticisms and Limitations

Critiques of the SIC highlighted inadequate coverage of emerging service sectors, poor fit for high-technology and information industries noted by commentators at the Brookings Institution and analysts at the National Academy of Sciences, and challenges in cross-border comparability raised by the Organization for Economic Co-operation and Development. The fixed four-digit structure impeded granularity desired by researchers at the National Bureau of Economic Research and by regulatory agencies such as the Federal Trade Commission for merger analysis, prompting migration efforts to NAICS and ISIC concordances coordinated by the Office of Management and Budget and the United Nations.

Category:Industry classification systems