Update on NAICS Revision & NM&SC/NTSA Proposal
In 2014, the NM&SC, NTSA and a coalition of supporting organizations submitted a proposal recommending new North American Industry Classification System (NAICS) codes for Modeling & Simulation.
As in years past, the ECPC (Economic Classification Policy Committee) is recommending no changes to the current classification of Modeling & Simulation within NAICS.
This was not an entirely surprising result, given the nature and structure of NAICS and the ECPC’s previously stated objections to the creation of new industry codes for M&S. However, some of the ECPC’s comments are encouraging. In particular, “the ECPC acknowledges the support for the creation of a new industry,” and recognizes that “the occupation is growing, and specialized training and education are clearly present.” They also note that “Professional standards have been developed and are being more widely applied.”
A few other significant points:
- The ECPC supports adding the phrase “Modeling and Simulation” as a part of the definition of NAICS Industry Group 5417, Scientific Research and Development Services, due to its growth in prominence in academia and in both the private and public sectors of the economy.
- The ECPC recommends that statistical programs consider adding inquiries for relevant industries to better quantify the production of modeling and simulation services across the range of producers.
- “With the development of the North American Product Classification System (NAPCS), a system that can account for more end use or demand-oriented concepts, additional evaluation could result in narrowly defined products, which may satisfy some aspects of this docket.”
The NM&SC and NTSA consider the NAICS issue to be an important area for ongoing action. Here is a (by no means exhaustive) list of some short and long-term goals:
- Develop a strategy with regards to the ECPC’s recommendation that “statistical programs consider adding inquiries for relevant industries to better quantify the production of modeling and simulation…”
- Research and monitor the development of the North American Product Classification System (NAPCS). Take appropriate actions to make sure that Modeling & Simulation products and services will be properly represented.
- Continue to build a matrix of organizations (with an interest in M&S) beyond the defense industry. Forge and strengthen relationships and build a stronger coalition. Broader consensus is needed not just on NAICS & NAPCS, but on a variety of issues requiring collective action.
- Recruit government/military representatives to participate in the NAICS & NACPS effort. The customer perspective has not previously been adequately captured or articulated.
The NMSC Industrial Development/Business Practice Standing Committee has taken the lead on the NAICS & NAPCS issue for the next cycle. A sustained effort will be needed to examine all aspects of the issue, and to build a clear and compelling case. Please contact Patrick Rowe at (703)247-9471 if you would like to be involved in this effort.
Full text of the ECPC’s response can be found at:
Scroll down to 17-0049 (Various – Modeling & Simulation)