Editing Industry (economics)

{{about |a categorized branch of economic activity|large-scale production and its effects|Manufacturing|and|Industrial society|other uses|Industry (disambiguation)}}
{{Short description|Economic branch that produces raw materials, goods or services}}
[[File:Cementfabriken på Limhamn–flygbild 06 september 2014.jpg|thumb|right|300px|Cement factories, part of the [[manufacturing industry]], produce product for the [[construction industry]] (also known as the [[building industry]]). This factory was in [[Malmö, Sweden]].]]
[[File:Burj Al Arab, Dubai, by Joi Ito Dec2007.jpg|thumb|300px|[[Burj al Arab]] as a symbol for the [[hospitality industry]] ]]
[[File:Geely assembly line in Beilun, Ningbo.JPG|thumb|right|300px|An image of the motor industry ([[automotive industry]]), a supplier to the [[transport industry]]. Economists may regard the manufacture of vehicles as a foundational industry and as a [[bellwether]] industry.<ref>{{cite book
 |last1            = Norton
 |first1           = Norton
 |editor-last1     = Tremblay
 |editor-first1    = Victor J.
 |editor-last2     = Tremblay
 |editor-first2    = Carol Horton
 |orig-date        = 2007
 |chapter          = General Motors: Lost Dominance
 |title            = Industry and Firm Studies
 |date             = 26 March 2015
 |url              = https://books.google.com/books?id=4nmsBwAAQBAJ
 |edition          = 4
 |location         = London
 |publisher        = Routledge
 |publication-date = 2015
 |page             = 271
 |isbn             = 9781317468028
 |access-date      = 10 October 2021
 |quote            = It was noteworthy that GM's dominance was in an extremely important industry. In simplest economic terms, it is a foundational industry. [...] The motor vehicle industry is a bellwether industry—its success has long been a signal of the state of the American economy.
 |archive-date     = 10 October 2021
 |archive-url      = https://web.archive.org/web/20211010042148/https://books.google.com/books?id=4nmsBwAAQBAJ
 |url-status       = live
}}</ref> ]]

In [[macroeconomics]], an '''industry''' is a branch of an [[economy]] that [[Production (economics) |produces]] a closely related set of [[raw material]]s, [[Good (economics) |goods]], or [[Service (economics) |services]].<ref>Compare: {{cite web|url=https://www.merriam-webster.com/dictionary/industry|title=Industry|author=<!--Not stated-->|date=4 August 2020|website=Merriam-Webster Dictionary |access-date=11 August 2020|quote=1 b: a distinct group of productive or profit-making enterprises [...] <br> c: a department or branch of a craft, art, business, or manufacture|archive-date=6 January 2006|archive-url=https://web.archive.org/web/20060106123336/https://www.merriam-webster.com/dictionary/industry|url-status=live}}</ref> For example, one might refer to the [[wood industry]] or to the [[insurance industry]].

When evaluating a single group or [[company]], its dominant source of revenue is typically used by [[industry classification]]s to classify it within a specific industry.<ref>{{cite web|url= http://www.investopedia.com/terms/i/industry.asp |title='Definition of Industry' Investopedia|url-status=dead|archive-url= https://web.archive.org/web/20170722093616/http://www.investopedia.com/terms/i/industry.asp |archive-date= 2017-07-22|date=2003-11-20|access-date=2015-05-22 | quote = Individual companies are generally classified into an industry based on their largest sources of revenue. For example, while an automobile manufacturer might have a financing division that contributes 10% to the firm's overall revenues, the company would be classified in the automaker industry by most classification systems.}}</ref> For example the [[International Standard Industrial Classification]] (ISIC) – used directly or through derived classifications for the [[official statistics]] of most countries worldwide – classifies "statistical units" by the "economic activity in which they mainly engage". Industry is then defined as "set of statistical units that are classified into the same ISIC category".<ref>{{cite book |author=<!--Staff writer(s); no by-line.--> |date=2008 |title=International Standard Industrial Classification of All Economic Activities (ISIC), Rev.4 |publisher=United Nations Publication |location=New York |isbn=978-92-1-161518-0 |page=3 |url=https://unstats.un.org/unsd/publication/SeriesM/seriesm_4rev4e.pdf |quote=6. The classification is used to classify statistical units, such as establishments or enterprises, according to the economic activity in which they mainly engage. At each level of ISIC, each statistical unit is assigned to one and only one ISIC code, as set out below. The set of statistical units that are classified into the same ISIC category is then often referred to as an industry […] |access-date=2022-06-21 |archive-date=2022-06-22 |archive-url=https://web.archive.org/web/20220622144131/https://unstats.un.org/unsd/publication/seriesm/seriesm_4rev4e.pdf |url-status=live }}</ref> However, a single [[business]] need not belong just to one industry, such as when a large business (often referred to as a [[conglomerate (company)|conglomerate]]) [[Diversification (marketing strategy)|diversifies]] across separate industries.

Other industry classification systems include the [[North American Industry Classification System]] (NAICS), which was developed through partnerships with North American countries such as the United States, Canada, and Mexico, in order to standardize the comparison of business activities in North America.<ref>{{cite web |last1=Kenton |first1=Will |title=North American Industry Classification System (NAICS) |url=https://www.investopedia.com/terms/n/naics.asp |website=Investopedia |access-date=2023-05-01 |archive-date=2023-05-01 |archive-url=https://web.archive.org/web/20230501150451/https://www.investopedia.com/terms/n/naics.asp |url-status=live }}</ref> There is also the [[Global Industry Classification Standard]] (GICS), which is used to assign companies to specific economic sectors and industry groups.<ref>{{cite web |last1=Hayes |first1=Adam |title=What Is the Global Industry Classification Standard (GICS)? |url=https://www.investopedia.com/terms/g/gics.asp |website=Investopedia |access-date=2023-05-01 |archive-date=2023-05-01 |archive-url=https://web.archive.org/web/20230501150450/https://www.investopedia.com/terms/g/gics.asp |url-status=live }}</ref> 

There are many [[industry classification]]s in the modern economy, which can be grouped into larger categories called [[economic sector]]s. Sectors are broader than industry classifications. For example, the [[retail]] trade sector contains industries such as clothing stores, shoe stores, and health and personal care stores. Companies are not limited to one sector or industry. They can reside in multiple sectors and industries.

Industries, though associated with specific [[product (business) |product]]s, processes, and [[consumer market]]s, can evolve over time. One distinct industry (for example, [[cooper (profession)|barrelmaking]]) may become limited to a tiny [[niche market]] and get mostly re-classified into another industry using new techniques. At the same time, entirely new industries may branch off from older ones once a significant market becomes apparent (as an example, the [[semiconductor industry]] has become distinguished from the wider [[electronics industry]]).

Industry classification is valuable for economic analysis because it leads to largely distinct categories with simple relationships. Through these classifications, economists are able to compare companies within the same industry to evaluate the attractiveness of that industry. Companies within the same industry can also have similar movements in the unit value of their listed shares due to their similarity and macroeconomic factors that affect all members of an industry.<ref>{{cite web |last1=Gorton |first1=David |title=Industry Definition in Business and Investing |url=https://www.investopedia.com/terms/i/industry.asp#:~:text=Investopedia%20%2F%20Zoe%20Hansen-,What%20Is%20an%20Industry%3F,into%20larger%20categories%20called%20sectors. |website=Investopedia |access-date=May 30, 2022 |archive-date=June 3, 2022 |archive-url=https://web.archive.org/web/20220603015350/https://www.investopedia.com/terms/i/industry.asp#:~:text=Investopedia%20%2F%20Zoe%20Hansen-,What%20Is%20an%20Industry%3F,into%20larger%20categories%20called%20sectors. |url-status=live }}</ref> However, more complex cases, such as otherwise different processes yielding similar products, require an element of [[standardization]] and prevent any one schema from fitting all possible uses.

==See also==
* [[Outline of industry]]
* [[List of countries by GDP sector composition]]

==References==
{{reflist}}

==External links==
{{wiktionary|industry}}
*{{commons category-inline|Industries}}
*{{wikiquote-inline|industry}}
{{Industries}}
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[[Category:Industries (economics)| ]]
[[Category:Industry (economics)|*]]