Industrial classification is a system used to categorize businesses and industries based on their primary activities. This helps in organizing economic data, facilitating research, and enabling comparisons across different sectors. Common classification systems include the North American Industry Classification System (NAICS) and the International Standard Industrial Classification (ISIC). These classifications are essential for government agencies, researchers, and businesses to analyze economic trends, allocate resources, and develop policies. By grouping similar industries together, stakeholders can better understand market dynamics and make informed decisions regarding investments and regulations.