International Standard Industrial Classification of All Economic ...

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Chapter II
The underlying principles of the
classification
A. Purpose and nature of the classification
1. General considerations
22. In the study of economic phenomena, taking all elements into account
simultaneously is not always possible. For the purposes of analysis, certain elements
need to be chosen and grouped according to particular characteristics. Thus, all economic
phenomena that are to be described in the form of statistics require systematic
classification. Classifications are, so to speak, the system of languages used in communication
about, and statistical processing of, the phenomena concerned. They divide
the universe of statistical data into categories that are as homogeneous as possible with
respect to those characteristics that are the objects of the statistics in question.
23. ISIC is intended to be a standard classification of productive activities. Its
main purpose is to provide a set of activity categories that can be utilized for the collection
and presentation of statistics according to such activities. Therefore, ISIC aims
to present this set of activity categories in such a way that entities can be classified
according to the economic activity they carry out. Defining the categories of ISIC is as
much as possible linked with the way the economic process is organized in units and
the way in which this process is described in economic statistics.
24. ISIC provides categories for the classification of units based on the activities
carried out by these units, but it does not per se provide categories for specific
types of units. This conceptual underpinning has been retained in the fourth revision
for two reasons. First, naming actual units may be ambiguous if the same title or name
is used differently across countries. For example, a “board of education” may have
completely different functions and carry out completely different activities in different
countries. Another example is the use of the term “Internet café”. In some cases, this
term refers to a restaurant that provides (wired or wireless) Internet access to its customers
as an amenity; in other cases it refers to a business service centre renting time
on PCs along with Internet access and related activities; while in still other cases, it
refers to a unit providing entertainment services by offering games that can be played
over the Internet. Such terminology may change from country to country or region
to region. Therefore, creating categories for “board of education” or “Internet café”
might lead to the classification of units in the same class that should not be compared.
Second, the name or title of a unit may not reflect the activity carried out by the unit.
For example, a shipyard is usually engaged in the building of ships. However, the same
infrastructure can be used for the dismantling of ships. If such a shipyard carries out
mostly the dismantling of ships, it should not be combined in the same class with
other units that build ships. Therefore, classifying a unit based on its characteristic as
being a “shipyard” (e.g., based on existing capital equipment) would be ambiguous.