Referencing ISIC Revision 4for Development and

Implementation ofHong Kong Standard

Industrial Classification

Simon W T YEUNG

Census and Statistics Department

Hong Kong, China

22

Outline

The Hong Kong Standard Industrial Classification (HSIC)

Development of HSIC V2.0

Implementation plan for HSIC V2.0

Strategic considerations in developing and implementing HSIC V2.0

Challenges ahead

33

The Hong Kong Standard Industrial Classification (HSIC)

Version 1.0 introduced in 1990, lastly revised in 2001 to Version 1.1

Compatible with ISIC Rev. 2 and Rev. 3

Devised and maintained by Census and Statistics Department (C&SD)

A basic stratification for sample selection and for data compilation, analysis and dissemination

4

Review of HSIC to reflect

Significant changes in the structure of Hong Kong economy

Emergence of new economic activities

Incorporate the conceptual and structural changes in ISIC Rev. 4

Development of HSIC V2.0

Aims to achieve

Relevance Compatibility Continuity

5

Changes in structure of classification scheme From 4-level to 5-level hierarchical system From 9 to 21 top level groups

Changes for enhancing international comparability High degree of conformance with ISIC Rev. 4 up to level 4 Enhanced data relevance through new groups at higher levels, e.g.

“Information and communications” and “Water supply; sewerage, waste management and remediation activities”

Changes initiated by Hong Kong to better meet local requirements

From 886 to 1000 6-digit codes at the most detailed level

Changes from HSIC V1.1 to HSIC V2.0

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HSIC V1.1 HSIC V2.0

Code(digit)

No. ofCategories

Code (digit)

No. ofCategories

1 numera

l

9Industry Sectors

1 alphabet

21Industry Sections

3 numera

l

84Major Industry

Groups

2numeral

88Industry Divisions

4

numeral

404Industry Groups

3numeral

221Industry Groups

4numeral

483Industry Classes

6

numeral

886Industries/Trades

6numeral

1 000Industry Sub-

classes

ISIC Rev. 4

Code (digit)

No. ofCategories

1 alphab

et

21Sections

2numera

l

88Divisions

3numera

l

238Groups

4numera

l

419Classes

Not applicable

Hierarchy of different systems

7

Better reflect significant local economic activities:

Changes initiated by Hong Kong to better meet local requirements – examples

% contribution to GDP (at current factor cost)1991 2006

Services 77.8% 91.2%

Import/Export 15.1% 21.4%

Manufacturing 14.5% 3.2%

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Reducing number of lower level codes for manufacturing activities

Reduce number of 6-digit codes under “Manufacturing sector” from 372 to 244

Refined industries with local significance

Attempt to split level 3 or 4 codes to level 5 codes

Further breakdown of miscellaneous activities

Examples, “Yoga and gymnastics instruction”, “Weight control and slimming services” and “Foot reflexology”

Changes initiated by Hong Kong to better meet local requirements – examples (cont’d)

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Implementation plan for HSIC V2.0

Time Event

2006 Working Group commences work

Early 2007 External consultation conducted

Early 2008Records in CRE recodedParallel coding commences till fourth quarter of 2009

31.10.2008 HSIC V2.0 launched

Jan 2009Different economic and social surveys adopt HSIC V2.0 progressively

Late 2010Results of PAES (reference year 2009 and before) available

2011GDP in HSIC V2.0 (reference year 2009 and before) availableBe adapted for 2011 Population Census

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Substantial and extensive impacts on statistical infrastructure

Central Register of Establishments Virtually all economic survey systems (12 annual and 9 sub-annual

survey systems) Social survey systems involving classification of employment

information (2 survey systems including population census)

A strategic and centrally coordinated approach to manage the changes

Institutionalisation Consultation Continuity Resources acquisition Capacity building/implementation tools Other implementation issues

Strategic considerations

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“Working Group on Revision of HSIC” Headed by a Directorate officer, senior professionals serving as

members To map out implications, work out implementation approach,

advise and monitor work progress, deliberate issues and make recommendations on implementation

PRINCE (Projects IN Controlled Environments) methodology A well established project management methodology Items to be managed include function, time, resources, quality and

risk Organisation :

Institutionalisation

Project Steering Committee (PCS)

Sub-committees on Project Management and Assurance (SPMA)

CRE and related surveys

Wage related surveys Other economic surveys

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Early involvement of stakeholders with accountability recognised

Consultation within C&SD from time to time

External consultation exercise for stakeholders from Jan 2007 to Feb 2007

All government bureaux and departments

More than 210 organisations, comprising semi-government bodies, academic institutions, federations/chambers of commerce and leading companies

Invited written comments and conducted briefing sessions

Consultation

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Maintain stability and continuity of data series over time

CRE Special Updating Exercise (recode existing records) Covered 350 000 active establishments in CRE 210 000 establishments involved splitting/regrouping of industry

codes A resource consuming task requiring some 250 man-months for

telephone interview and field enumeration

Continuity

Two major activities

Converting HSIC codes of existing records in CRE

Parallel coding in CREfor a transitory period

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Parallel coding in CRE

Some 100 man-months required for system enhancement and coding

Transitory period for eight reference quarters in 2008 and 2009

A basis for redesigning surveys, including

Precision of estimates

Sample size requirement

New demands due to new industry groups

Benchmark for backcasting historical series

Continuity (cont’d)

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Resources required for

System enhancement, recoding and parallel coding in CRE

Extended impacts on various data collection programmes and corresponding computing systems

Resources acquisition

Critical Factors

Timely acquisition

Effective staff redevelopment plan leverage on the

experience and expertise of existing staff to lead the late comers to the project

Centralised proposal on resource funding requirement covering all activities

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Implementation of HSIC V2.0 : an important statistical capacity building process

Need to equip statistical staff, stakeholders and users to manage the changes

Implementation tools

Self-contained HSIC V2.0 Manual : web- and print-version

Search tool on C&SD website

Concordance tables between HSIC V2.0 and HSIC V1.1

Capacity building/implementation tools

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Training sessions for all relevant staff

Topics on adaptation and use of HSIC V2.0 in data collection programmes, and other points of common interest

Intranet depository of issues of common interest for information sharing

Reference materials at different websites

UNSD

Eurostat / CIRCA

Other official statistical agencies

Capacity building/implementation tools (cont’d)

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Legal issue

Reclassification of economic activities leads to changes in survey coverage

Amendments to survey orders in the Census and Statistics Ordinance required

Early start is necessary to cope with time - consuming legislative procedures

Other implementation issue

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Experience gained

Consideration Means OutcomeInstitutionalisation High level commitment is essential Development and

implementation work progressing smoothly

Consultation Early involvement of wide-spectrum of stakeholders is crucial

Adopted details in HSIC V2.0 are representative of current economic activities

Continuity Recode records and provide parallel codes in CRE are critical

Good start for such subsequent activities as sample redesign and system enhancements

Resources acquisition

Adopt a coordinated approach with timely submission of funding request, and appropriate staff deployment plan, is extremely important

Administrative costs saved, resources approved timely and harmonisation on human resources achieved

Capacity building / implementation tools

To develop a variety of tools is important; make reference to resourceful materials

A number of tools are being developed for implementation

Legal issue: amendments to survey order

Early start of amending relevant legislation is necessary

Legal amendments are being processed

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Top-top level for data presentation / dissemination

Data backcasting

Length of data series

Level of breakdown

Method of backcasting

Deseasonalisation issues

Challenges ahead - immediate

Thank You