Industry classification or industry taxonomy is a type of economic taxonomy that classifies companies, organizations and traders into industrial groupings based on similar production processes, similar products, or similar behavior in financial markets.
National and international statistical agencies use various industry-classification schemes to summarize economic conditions. Securities analysts use such groupings to track common forces acting on groups of companies, to compare companies' performance to that of their peers, and to construct either specialized or diversified portfolios.[1]
Sectors and industries
Economic activities can be classified in a variety of ways. At the top level, they are often classified according to the three-sector theory into sectors: primary (extraction and agriculture), secondary (manufacturing), and tertiary (services). Some authors add quaternary (knowledge) or even quinary (culture and research) sectors. Over time, the fraction of a society's activities within each sector changes.
Below the economic sectors are more detailed classifications. They commonly divide economic activities into industries according to similar functions and markets and identify businesses producing related products.