Difference Between SIC Codes & NAICS Codes

by Ranjna Das; Updated September 26, 2017

Both the SIC (Standard Industrial Classification) and NAICS (North American Industry Classification System) were established to categorize businesses according to a defined set of classification rules. These systems identify and classify a business entity based on its primary type of business activity.

About the SIC

The SIC system was established in 1937 and uses a four-digit code to categorize industries. Examples of industries classified by this system include agriculture, mining and transportation. Currently, the only group using the SIC code is the U.S. Securities and Exchange Commission. Since 1997, the SIC system has been replaced by the NAICS.

About the NAICS

The NAICS is a classification system similar to the SIC but one which includes the North American Free Trade Agreement partners, Mexico and Canada, for better comparability of data and statistics. This system is more granular in identifying types of industries and businesses and uses a six-digit categorization system. Five digits are used consistently for business classification, and the sixth digit is reserved for national industries and can vary from country to country.

Use of Classification Systems

The U.S. Census Bureau is responsible for managing these systems, which are primarily used for collecting, analyzing and publishing statistical data for business-related economic analysis. Other than being used for economic and statistical purposes for government agencies, classification systems such as the SIC and NAICS are also used by academics, researchers, business communities and the public.

About the Author

Ranjna Das began writing abstracts and brief articles in 1990 for "Biology Digest," a science publication. After a long hiatus from writing, she now enjoys contributing to eHow. She holds bachelor's degrees in communications and English, and a master's degree in library science from Rutgers University.