SIC: The Standard Industrial Classification (SIC) system was originally developed in the 1930’s to classify establishments by the type of activity in which they are primarily engaged. The purpose of this task was to promote the comparability of establishment data to describe the US and Canadian Economies. The SIC has not been updated since 1987, however, the SIC system is still widely used. Some companies, such as D&B, have created their own 4-digit extension to the original SIC system as a means to update and expand the system so their Customers can more precisely define their Business Classification.
NAICS: The North American Industry Classification System (NAICS) was established in 1997 to replace the no longer sufficient SIC system. Developed in coordination with the statistical agencies of Canada and Mexico, NAICS establishes a North American Standard that allows for a high level of comparability in business statistics among the three countries. It is the first economic classification system to be constructed based on a single economic concept.
What’s the Difference?
The NAICS Code was developed to eliminate the inconsistent logic utilized in the SIC system and to increase specificity from the 4 digit SIC system by creating a 6 digit NAICS code.
While the NAICS system utilizes a purely production-oriented structure identifying businesses only by their primary economic activity, the SIC system moves from production-oriented logic to market-oriented logic throughout its structure. This inconsistency is likely attributable to the many revisions made throughout the years to a system whose founding documents are lost to history.
Some markets may prefer the representation of their industry within the SIC system. The SIC is still widely used by Marketers to target companies based on SIC classifications that differ from NAICS classifications.
Know More Here: SIC Codes