The North American Industry Classification System (NAICS) is a standardized system used to classify business establishments in the United States, Canada, and Mexico. It was developed to provide a consistent framework for collecting, analyzing, and publishing statistical data related to the economy. NAICS uses a hierarchical structure, with codes that represent different industries based on their primary activities. NAICS codes are essential for government agencies, researchers, and businesses to understand economic trends and make informed decisions. The system is updated periodically to reflect changes in the economy and emerging industries, ensuring that it remains relevant and useful for economic analysis and policy-making.