The Process of Industrial Classification

In macroeconomics, an industry is an interrelated group of goods, raw materials, or services produced by a community or society in a relatively short period of time. For instance, one could refer to the electrical energy industry or the mining industry. The definition of an industry also covers any governmental intervention, including trade agreements, protectionism, and political, technological, and economic policies. For instance, trade barriers between nations often lead to a shortage of certain goods and services, which lead to localized shortages and a dislocation of workers within the industry.

Within a nation, there can be a variety of industries. Some examples include the manufacturing industry, agriculture, construction, and transportation. A variety of changes have occurred within these sectors over time. Manufacturing has moved from being the mainstay industry in a country’s economy, to being a main source of jobs and income for the middle class. However, as manufacturing has declined, the need for employment in this sector has become higher, leading to rises in demand for labor.

As shown in the previous section, there can be a wide array of industries, which span across both geographies and time periods. With the advent of international trade and the development of the internet, many sectors of the economy are beginning to face challenges in becoming diversified. From the manufacturing industry to consumer goods, the changes that have occurred within these industries have affected the overall economy, and the classification of industries within the American industry classification system continues to evolve as new trends emerge.