The North American Industry Classification System (NAICS) is a standardized system used to classify businesses and industries in the United States, Canada, and Mexico. It was developed to provide a consistent framework for collecting, analyzing, and sharing economic data. NAICS codes are numerical codes that represent specific industries, allowing for easier comparison and analysis of economic activities across different sectors. Each NAICS code consists of six digits, with the first two digits representing the broadest industry category. As the digits progress, they become more specific, detailing subcategories and individual industries. This system helps government agencies, researchers, and businesses understand economic trends and make informed decisions.