1. United Nations Statistics Division Issues related to ISIC Rev.4

2.  UNSD has been monitoring feedback on ISIC Rev.4 since its release in 2008 (a) identify any problems with the current version, i.e. text, of the classification (b) identify issues that have arisen in the implementation of the classification in different countries  highlighting cases where the (generic) ISIC text is difficult to apply to national specific cases  indicating a need for revision of ISIC  Feedback was gathered through workshops, Hotline, website feedback

3. Issues that need to be addressed  1. Outsourcing (esp. FGPs)  2. On-line activities  3. "Retail sale of services"  4. Internet sales issues

4. 1. Outsourcing  Common theme in workshops  Explanation of current rule with examples is usually sufficient  New issues: First counter-proposal is from ECE Task Force (May 2013)  triggered by factoryless goods producers Complete outsourcing in mining etc. Non-statistical applications (e.g. licensing)

5. 1a. Factoryless goods producers (FGPs)  Company A: designs a product holds copyrights Contracts actual manufacturing to company B Oversees the manufacturing process, but is not directly involved Has no production facilities  Is this still manufacturing?

6. 1a. FGPs  Current ISIC rule is based on ownership of input materials  New suggestion: Use copyrights as criterion  Proposals range from “create new high-level categories” over “add low- level detail” and “redefine input materials” to “no change”

7. 2. On-line activities  Mostly received as Hotline questions, seeking interpretation of activities with on-line presence  Standard recommendation agreed by TSG: Treat the same as non-Internet based equivalent  Problem: In some cases such equivalent is difficult to identify  Examples: Social media activities, like Facebook, Twitter, Tumblr On-line dating sites, either general or for specific segments of the population Photo-, music and other content-sharing websites Professional networks, like Linked In

8. 3. "Retail sale of services"  Conceptually, "retail sale of services" does not exist  We treated similar arrangements before as "agents" for the respective service industry and classified them with the service industry or in a special class (insurance agents, travel agents)  This works if a single service is being "sold"  What to do if a large variety of services is involved? Top-down would not be meaningful Placing in retail sale would be conceptually wrong Are they just handling payments?  Is there a solution that's consistent with old treatment?  Examples: Groupon, Sodexho

9. 4. Internet sales issues  Standard treatment for goods: ISIC 4791 (Retail sale via mail order houses or via Internet)  Many sites have similar appearance, but their involvement in the sale may differ  Examples: Amazon vs. Google Shopping vs. Groupon vs. Advertising placement  In addition, problems arise when goods and services get mixed

10. Next steps  Technical Subgroup has been created Online exchanges Meeting in October 2014 Consultation with National Accounts (especially on FGPs)