V. ESTABLISHMENTS AND INDUSTRIES
A. Introduction
| 5.1. | Institutional units were defined in chapter IV. The present chapter, which starts off with a view of institutional units in their capacity as producers, defines an institutional unit engaged in production as an enterprise. An enterprise may be a corporation (a quasi-corporate enterprise being treated as if it were a corporation in the System), a non-profit institution, or an unincorporated enterprise. Corporate enterprises and non-profit institutions are complete institutional units. An unincorporated enterprise, however, refers to an institutional unit - a household or government unit - only in its capacity as a producer of goods and services. It covers only those activities of the unit which are directed towards the production of goods or services. Many households do not contain an unincorporated enterprise. | | | | |  Update available. Click here |
| 5.2. | A single enterprise, especially a large corporation, may engage simultaneously in many different kinds of productive activities, there being virtually no upper limit to the size of an enterprise. If enterprises are grouped together on the basis of their principal activities, at least some of the resulting groupings are likely to be very heterogeneous with respect to the type of production processes carried out and also the goods and services produced. Thus, for analyses of production in which the technology of production plays an important role, it is necessary to work with groups of producers who are engaged in essentially the same kind of production. This requirement means that some institutional units must be partitioned into smaller and more homogeneous units, which the System defines as establishments. Further, the System defines industries as groups of establishments. In the System, production accounts and generation of income accounts are compiled for industries as well as sectors. |
| 5.3. | This chapter first discusses productive activity and its classification in order to lay the ground for defining establishments and subsequently industries. The definitions that emerge as well as the underlying definitions of kinds of activities and of statistical units other than establishments are consistent with the definitions in the third revision of the International Standard Industrial Classification of All Economic Activities (ISIC, Rev.3), published by the United Nations. Any slight differences in wording between this chapter and the "Introduction" to the ISIC are needed to make the definitions clearer in an SNA context. |
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