United Nations Statistics Division Options for national implementation of ISIC

2 Purpose of ISIC Since its creation in 1948, ISIC had two goals:Since its creation in 1948, ISIC had two goals: Provide a tool for international comparisonProvide a tool for international comparison Provide guidance to countries for a national activity classification structureProvide guidance to countries for a national activity classification structure Increasing need for detailed internationally comparable data has lead to more detailed versions of ISICIncreasing need for detailed internationally comparable data has lead to more detailed versions of ISIC

3 National classifications How can national classifications be structured?How can national classifications be structured? 1.Using ISIC as a starting point 2.Based on historical national versions

4 Using ISIC as a basis Countries that use ISIC as a basis for their national classification, can do this to varying degrees:Countries that use ISIC as a basis for their national classification, can do this to varying degrees: 1.Adopt ISIC “as-is” 2.Use the complete ISIC and add subdivisions to reflect nationally important industries (but maintain the ISIC coding structure) – can be “numerically truncated” back to ISIC [Example] 3.As above, but with changes of the coding structure (example: NACE) – requires correspondence table [Example] 4.Elevating lower level ISIC categories to higher national levels, (e.g. combine ISIC categories at 2- or 3-digit level) [Example]

5 Using ISIC as a basis The first three methods maintain full comparability with ISIC at all levels (although option 3 may not be very intuitive)The first three methods maintain full comparability with ISIC at all levels (although option 3 may not be very intuitive) Option 4 limits internationally comparability to a higher aggregation level onlyOption 4 limits internationally comparability to a higher aggregation level only Is use of the same coding as ISIC 4 a requirement? - No, but it makes comparisons easier.Is use of the same coding as ISIC 4 a requirement? - No, but it makes comparisons easier.

6 Using historical national classifications as a basis Using non-ISIC based classifications always creates difficulties for international comparisonUsing non-ISIC based classifications always creates difficulties for international comparison Correspondence tables are necessaryCorrespondence tables are necessary May limit data conversion due to splitsMay limit data conversion due to splits Efforts are encouraged to line the historical versions up to ISICEfforts are encouraged to line the historical versions up to ISIC At detailed level (without considering aggregation structures) orAt detailed level (without considering aggregation structures) or By lining up individual sectionsBy lining up individual sections

7 What detail should be considered? Minimum level of data reporting has been agreed at 2-digit levelMinimum level of data reporting has been agreed at 2-digit level However, most statistics and users will require moreHowever, most statistics and users will require more Due to size and confidentiality reasons, not all detail may be useful for all countriesDue to size and confidentiality reasons, not all detail may be useful for all countries BUT: classification for collection may be more detailed than for distribution of dataBUT: classification for collection may be more detailed than for distribution of data

8 What level should be considered? Using more detail for collection allows for future adjustments if individual industries are growingUsing more detail for collection allows for future adjustments if individual industries are growing Level of detail for publishing depends on type of statistics anywayLevel of detail for publishing depends on type of statistics anyway No fixed guidelines exist for the proper choice of detailNo fixed guidelines exist for the proper choice of detail

9 Options to consider or avoid ISIC structure and definition are based on few criteria (input, process, output, use of outputs)ISIC structure and definition are based on few criteria (input, process, output, use of outputs) Should other criteria be added for national purposes, such as private vs. public entity, manufacturing by hand (crafts) vs. manufacturing by machines?Should other criteria be added for national purposes, such as private vs. public entity, manufacturing by hand (crafts) vs. manufacturing by machines? What are the applications?What are the applications?

10 Options to consider or avoid When introducing additional detail, check if the specialization for this activity really warrants a separate classWhen introducing additional detail, check if the specialization for this activity really warrants a separate class When following the ISIC structure and coding system, don’t renumber codes if you want to skip a code number (e.g. due to absence of that activity)When following the ISIC structure and coding system, don’t renumber codes if you want to skip a code number (e.g. due to absence of that activity) The activity may still exist illegally (or appear in the future) and should be accounted for in the SNAThe activity may still exist illegally (or appear in the future) and should be accounted for in the SNA Renumbering makes the ISIC link less intuitiveRenumbering makes the ISIC link less intuitive

11 Rules for good housekeeping If a category at level n is not further subdivided, the code at level n+1 should be the same code with a “0” appendedIf a category at level n is not further subdivided, the code at level n+1 should be the same code with a “0” appended Use digit “9” for residual categoriesUse digit “9” for residual categories