1. The 2007 Revision of ISIC and CPC
Concepts Paper
UN Statistics Division, Classifications Section
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2. Overview ISIC Purpose and criteria Statistical units
Classification principles and rules
Principle of grouping and Production Process Principle
Activity-Product link
Hierarchical structure
Country adaptation
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3. Overview CPC Purpose, scope and coverage Aggregation structure
Links to other classifications
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4. About the Revision Process
Revision process initiated at the 30. session of the Statistical Commission
5 year update cycle, 10 year major revisions
Purpose:
Adapt to economic/technological changes
Response to data demand
Comparability and convergence of classifications systems
Serve national and international needs
Make changes predictable
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5. Revision schedule
2002
Statistical Commission endorsed ISIC 3.1 and CPC 1.1
Questionnaire: focus on ISIC principles
Workshop ASEAN
2003
Presented Concepts Paper to the Statistical Commission
Questionnaire: focus on top-structure of ISIC
Workshops: ECLAC, ESCAP, ASEAN, Afristat
2004
First draft of CPC (wait for input from IMF); elaborate detail of ISIC
Country consultations, Workshops
Prepare final draft of ISIC, CPC for EG in 2004, SC in 2005
2005
Preparation for publication; available by 2006
2007
ISIC and CPC will come into effect
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6. Driving factors Relevance – why is the change justified?
Comparability – how does it affect the comparison with other Classifications?
Continuity – how does it affect time series?
methodologically sound classification, that unifies different national classifications, without unnecessary changes
How does this affect theoretical concepts?
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7. ISIC Scope and Purpose
“economic activities” = production of goods and services of the CPC within the SNA boundary
+ household production for own use
+ services through licensing of intangible non-produced assets (e.g. patents, franchise, trademarks)
? rental/leasing related to other assets
? trust funds
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8. ISIC Scope and Purpose
i.e. all economic functions, whether they produce goods and services (SNA: transactions) or not
Transactions in goods and services
Financial transactions
Distributive transactions
Why? – other uses of ISIC
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9. Statistical Units Enterprises Establishments (1 location, 1 activity)
Smallest entity differs between countries
Additional option (KAU, LU)
Ancillary activities as defined in the SNA, no changes anticipated, but dual coding recommended
Differences in NAICS!
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10. Classification Principles
Unit should have 1 activity (theoretically)
Multiple activities:
Top-down principle
… by value-added
… otherwise by a proxy: gross output, sales, employment
Vertical integration: final product, value-added?
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11. Classification Principles
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12. Classification Principles
Principles for grouping
Input
Process (technology)
Output (use)
Purpose
NAICS uses production process principle (PPP), but not totally consistent
2002 Questionnaire: mixed approach favored
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13. Classification Principles
Activity-Product link:
Exists “by nature”
Not always on a 1:1 basis
Provide that link to users
Responses very vague about n:1 links, quote:
“(…) In such cases where a 1:1 relation is not possible a more flexible treatment should be developed.”
Consequences for CPC
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14. Country adaptation Recommendation could change
(Currently) the Statistical Commission recommends:
Adopting the system as a national standard
or rearranging their national data in accordance to the system for purposes of international comparability
(In the future) prescribe a certain level of detail, e.g. ISIC 3.1, two-digit level, as mandatory
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15. CPC – Conceptual Issues
Purpose, scope and coverage:
Primarily designed to be used in statistical programmes OR
Central link to other existing product classifications, filling gaps in uncovered areas, etc.
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16. CPC scope Decision: What should be in the CPC?
cover produced products + non-produced assets (financial, non-financial) + by-products (+ used goods)
(?) in separate parts
(?) one publication
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17. CPC - scope
=CPC?
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18. CPC – Conceptual Issues
Aggregation Structure - options:
Industry of origin approach
(+) Increased ease of use for different purposes
(+) SNA, Supply and Use tables
(--) Should serve more functions that could need different aggregation
(--) Would tie CPC to ISIC
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19. CPC – Conceptual Issues
Aggregation Structure - options:
Demand-based approach
Use COICOP, COPNI, COPP as directions as well as the experience of the NAPCS development (done for some services so far, no final results available)
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20. Next steps - Options
Elaborate demand based and industry of origin based structure simultaneously?
With standardized aggregations for different purposes?
Demand-based structure would require more time and input from NAPCS
Impossible for 2007 ?
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21. Questionnaire Value-added principle for integrated activities?
Country adaptation – top structure only?
Purpose and scope of CPC?
Aggregation structure of CPC – Industry of origin vs. demand based?
Is aggregation structure of CPC used?
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22. End
Thank you for your attention!
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