Introduction
The North American Industry Classification System (NAICS) is a hierarchical coding system that classifies business establishments based on the activities in which they are primarily engaged. The system was jointly developed by the United States, Canada, and Mexico to promote economic analysis and data comparability across the three countries. This article explores the NAICS classification system, examines how it applies to space economy businesses and discusses its importance for businesses and governments.
NAICS Structure
NAICS is structured hierarchically, with the most general level being the sector, followed by the subsector, industry group, industry, and finally, the national industry. The NAICS classification system consists of 20 sectors, 102 subsectors, 325 industry groups, 722 industries, and 1,065 national industries. The 20 sectors are:
- Agriculture, Forestry, Fishing, and Hunting (11)
- Mining, Quarrying, and Oil and Gas Extraction (21)
- Utilities (22)
- Construction (23)
- Manufacturing (31-33)
- Wholesale Trade (42)
- Retail Trade (44-45)
- Transportation and Warehousing (48-49)
- Information (51)
- Finance and Insurance (52)
- Real Estate and Rental and Leasing (53)
- Professional, Scientific, and Technical Services (54)
- Management of Companies and Enterprises (55)
- Administrative and Support and Waste Management and Remediation Services (56)
- Educational Services (61)
- Health Care and Social Assistance (62)
- Arts, Entertainment, and Recreation (71)
- Accommodation and Food Services (72)
- Other Services (except Public Administration) (81)
- Public Administration (92)
For example, the manufacturing sector is one of the 20 sectors in the NAICS classification system. It is classified as sector 31-33, which includes establishments engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products. Within the manufacturing sector, there are 21 subsectors, which are further divided into industry groups, industries, and national industries. The following section provides 2 examples of space economy businesses which fall under the manufacturing sector classification.
Space Economy Businesses Examples
Note that a business can only register for one primary NAICS code that best describes its primary business activity. However, a business may also register for additional NAICS codes that describe its other business activities. These additional codes are referred to as secondary NAICS codes. There is no limit to the number of secondary NAICS codes that a business may register. The following examples use the primary code.
Maxar Technologies
NAICS code: 334220
- 33: Manufacturing (Sector)
- 334: Computer and Electronic Product Manufacturing (Subsector)
- 3342: Communications Equipment Manufacturing (Industry Group)
- 33422: Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing (Industry)
Maxar Technologies primarily operates in the manufacturing of radio, television, and wireless communications equipment, which includes satellite communications equipment.
Astra Space
NAICS code: 336414
- 33: Manufacturing (Sector)
- 336: Transportation Equipment Manufacturing (Subsector)
- 3364: Aerospace Product and Parts Manufacturing (Industry Group)
- 33641: Guided Missile and Space Vehicle Manufacturing (Industry)
Astra Space focuses on providing orbital launch services for small satellites and falls under the guided missile and space vehicle manufacturing industry.
Virgin Orbit
NAICS code: 336414
- 33: Manufacturing (Sector)
- 336: Transportation Equipment Manufacturing (Subsector)
- 3364: Aerospace Product and Parts Manufacturing (Industry Group)
- 33641: Guided Missile and Space Vehicle Manufacturing (Industry)
Similar to Astra Space, Virgin Orbit's primary business activity is satellite launch services, and it falls under the guided missile and space vehicle manufacturing industry.
Telesat
NAICS code: 517410
- 51: Information (Sector)
- 517: Telecommunications (Subsector)
- 5174: Satellite Telecommunications (Industry Group)
- 51741: Satellite Telecommunications (Industry)
Telesat operates in the satellite telecommunications industry, providing satellite-based data communication services to various clients worldwide.
SES
NAICS code: 517410
- 51: Information (Sector)
- 517: Telecommunications (Subsector)
- 5174: Satellite Telecommunications (Industry Group)
- 51741: Satellite Telecommunications (Industry)
SES, like Telesat, is a satellite telecommunications company that offers satellite-based communication services, including video distribution and data connectivity, to clients across the globe.
Why NAICS Matters
The NAICS system is an important tool for businesses, government agencies, and researchers because it provides a standardized framework for classifying and comparing economic data. By using NAICS codes, businesses can easily identify competitors, customers, and suppliers within their industry and track industry trends over time. Government agencies use NAICS codes to collect and analyze economic data, such as employment and sales figures, to inform policy decisions. Researchers use NAICS codes to study industry trends and conduct comparative analyses across different sectors and regions.
Source: US Department of Commerce