WASHINGTON – Dance halls, asbestos product manufacturers and chewing gum makers have joined the list of “buggy whip” industries whose time has come and gone, according to the government.
In their place are such modern contrivances as pet care services, paging, satellite communications and warehouse clubs, whose success has earned them their own place in a new government classification system.
The North American Industry Classification System (NAICS), which premiered this month, phased out 230 existing businesses and merged them into other categories, while introducing 352 new industries and revising 390 classifications.
The new system doesn’t mean that businesses such as railroad-car rental and chewing gum are no more — it just means that they are not popular enough to stand on their own as an industry any longer.
“Chewing gum used to be really, really big, because they used to put gum in baseball card packs, but now they don’t,” so chewing gum lost its individual category and is now grouped with candy and confections, said Bob Marske, a special assistant on the economic planning staff at the Census Bureau.
Marske said the new system clarifies American industry by legitimizing growing markets and high-tech businesses with new categories and eliminating the “buggy whip” industries.
The NAICS, which has been around since 1997, premiered this month with the release of the 1997 Economic Census. Initial results of that census showed that manufacturing employed 17 million people in 1997, retail trade employed 14 million and health care and social assistance employed 13.6 million, among other industries. More detailed results are scheduled to be released over the next two years.
The new industry categories replace the 60-year-old breakdown of U.S. business sectors known as the Standard Industry Classifications. Some argue that the change is a good indication of what industries are gaining popularity with American consumers.
“If it has grown to be a large enough category that they are including it, it’s a good indication of what Americans are buying,” said Lynda M. Maddox, an associate professor of marketing and advertising at George Washington University in Washington, D.C.
Maddox said the introduction of a new, more detailed system can help chart the changes in economic trends, like high-tech or service industries.
“Big business changes and the way we buy changes. It doesn’t surprise me at all,” she said.
So new industries like gas stations with convenience stores, bed and breakfast inns, cellular communications companies and diet centers that have become popular recently have had their own categories added.
But other experts say the new system should be used less as an indication of buying trends and more as a tool to better track economic figures and statistics.
“What the North American Industry Classification System does is makes all the data more compatible. The same code will be used to report all kinds of data,” said Pradeep Ganguly, director of the Office of Business and Economic Research at the Maryland Department of Business and Economic Development.
Ganguly said the older SIC system “is not compatible with data on consumption, trade or investment” and the reason for introducing new classifications is “basically bringing things in line with each other.”
Ganguly predicts, however, that the shift to the new system may not be a smooth one.
“Initially, it’s probably going to cause a lot of chaos,” he said. “But in the long run its going to make our jobs a lot easier.”
While the transition may prove to be difficult, the new classifications are, to some, as simple as supply and demand.
Tim Wray, owner and director of the Maryland School of Dog Grooming in Silver Spring, is in one of the newly recognized industries. He said demand for skilled workers in his field is so high that “the biggest problem with dog grooming is burnout … the groomers just can’t do it.
“A large city like Washington, D.C., and the surrounding counties have a lot of people and wherever there’s people, there’s dogs and wherever there’s dogs, there has to be dog groomers,” said Wray.