What does every business need but not every industry has?

Every five years, a quiet but consequential bureaucratic event takes place: the updating of NAICS codes—the North American Industry Classification System. These six-digit codes are how the federal government categorizes every industry, from fishing (code 114) to mining (212). They underpin the Economic Census, Bureau of Labor Statistics data, and nearly $800 billion in federal contracts. But if your industry doesn't have a code, you're effectively invisible to the government's measurement tools. And getting a new code is a grueling, multi-year process that happens only once every five years.

The classification Olympics

The system dates back to the 1930s, when the Department of Commerce created standard industry classification codes to help measure the emerging concept of gross domestic product. By 1997, those codes were replaced by NAICS to keep up with new industries. As Georgetown University business reference librarian Jennifer C. explains, the codes allow for precise comparisons: a Walmart supercenter is classified differently from a grocery store or a department store, even though all three sell food. Without these distinctions, analysts can't make "apple to Apple comparisons" about industry growth.