In the evolving UK economy, RTICs stand out for their dynamic and accurate classification of companies, outpacing the static nature of SIC codes.
Understanding the difference between Real-Time Industrial Classifications (RTICs) and Standard Industrial Classification (SIC) codes is crucial, especially in the context of emerging UK economy.
Definition and purpose
- RTICs: They represent a modern approach to classifying companies, developed by The Data City. RTICs focus on providing a real-time, accurate representation of the emerging economy by leveraging advanced technology like machine learning and expert input. They are designed to reflect the latest developments and innovations in various sectors.
- SIC Codes: These are traditional systems for classifying industries, intended to categorise companies by their primary business activities. However, these codes are now criticised for being outdated and not reflecting modern economic sectors.
A major issue with SIC codes is their assignment process. Companies must select one to four SIC codes at their inception, but often choose codes out of convenience or due to limited options. This leads to misclassification and inaccuracies in economic data. Moreover, the SIC system hasn't been updated since 2007, failing to capture new sectors like AI and cybersecurity. This outdated framework limits its usefulness in economic analysis, policy-making and investment planning, highlighting the need for a more accurate and dynamic classification system.
Technology and methodology
- RTICs: Utilise a combination of machine learning algorithms and expert training. This way we can continuously update classifications based on the most recent market trends and company activities by monitoring their online presence and other data sources.
- SIC Codes: Rely on a predetermined and static set of categories that were established through traditional economic studies and analyses. These categories are not dynamically updated and may not capture emerging industries effectively.
Scope and coverage
- RTICs: Cover over 400 emerging economy sectors, including Net Zero, AgriTech, FinTech, Artificial Intelligence, and more. This wide range is particularly effective in identifying and classifying companies in cutting-edge and rapidly evolving sectors. Find all our latest RTICs here.
- SIC Codes: Have a more limited scope in terms of emerging industries. They are less effective at categorising companies in newer sectors that have developed since the last major update of the SIC system. The latest (2007) update of the SIC codes can be found here.
Customisation and flexibility
- RTICs: Offer the ability to create custom classifications, allowing users to tailor the system to their specific needs and to map out niche or emerging sectors effectively.
- SIC Codes: Lack the flexibility for customisation. They adhere to a fixed set of categories, which might not suit all analytical or industrial needs, especially in the context of modern, dynamic economies.
Accuracy and relevance
- RTICs: Aim to provide a more accurate and up-to-date picture of the economy. They are particularly useful for identifying companies that are often hidden in the 'not elsewhere classified' (n.e.c.) categories of SIC codes.
- SIC Codes: Can be less accurate in representing the current state of the economy, especially for newer industries, due to their infrequent updates and static nature.
| SIC Code | SIC Description | # of companies |
|---|---|---|
| 82990 | Other business support service activities n.e.c. | 249,233 |
| 96090 | Other service activities n.e.c. | 162,888 |
| 74909 | Other professional, scientific and technical activities n.e.c. | 83,693 |
| 64209 | Activities of other holding companies n.e.c. | 68,595 |
| 43999 | Other specialised construction activities n.e.c. | 64,272 |
| 85590 | Other education n.e.c. | 47,328 |
| 63990 | Other information service activities n.e.c. | 28,409 |
| 32990 | Other manufacturing n.e.c. | 22,181 |
| 42990 | Construction of other civil engineering projects n.e.c. | 20,921 |
| 93290 | Other amusement and recreation activities n.e.c. | 20,874 |
This table shows the top 10 n.e.c. SIC codes by the amount of companies classified.
RTICs represent a more dynamic, flexible, and technologically advanced approach to industrial classification compared to the traditional SIC codes. They are particularly adept at capturing the nuances of the modern economy, including emerging sectors and rapidly evolving industries.