The new system, the North American Industry Classification System (NAICS), represents one of the most significant changes for statistical programs focusing on emerging economic activities. NAICS, developed using a production-oriented conceptual framework, groups establishments into industries based on the activity in which they are primarily engaged.
Establishments using similar raw material inputs, similar capital equipment and similar labor are classified in the same industry. In other words, establishments that do similar things in similar ways are classified together.
Every sector of the economy has been restructured and redefined. A new information sector combines communications, publishing, motion picture and sound recording, and online services, recognizing the burgeoning information-based economy. Manufacturing is restructured to recognize new high-tech industries. A new sub-sector is devoted to computers and electronics, including reproduction of software. Retail Trade is redefined. In addition, eating and drinking places are transferred to a new Accommodation and Food Services sector. The difference between Retail and Wholesale is now based on how each store conducts business. For example, many computer stores are reclassified from wholesale to retail.