Subindustries

A subindustry is a narrow segment of an economy’s industrial activities, defined as a subset of a broader industry that shares a particular product, process, or market focus. Subindustries are used to classify firms and activities more precisely than broad industry categories, enabling targeted analysis of trends, productivity, and competition.

In most classification schemes, an industry is divided into subsectors and further into subindustries. Widely used systems include the North American Industry Classification System (NAICS), which names sectors, subsectors, and industry groups; the Global Industry Classification Standard (GICS), with sectors, industry groups, industries, and sub-industries; and the Industry Classification Benchmark (ICB). The exact definitions vary by system and country; firms may be assigned to different subindustries depending on context.

Examples: within manufacturing, subindustries include the motor vehicles subindustry, machinery manufacturing, and consumer electronics manufacturing. Within information technology, subindustries include software publishing, IT services, and semiconductor equipment. Within healthcare, subindustries include pharmaceuticals, biotechnology, diagnostics, and medical devices.

Uses and challenges: Subindustries support economic analysis, investment research, policy assessment, and supply chain mapping by providing narrower lenses than broad sectors. They can reveal specialization patterns and competitive dynamics. Boundaries can be fuzzy: firms operate across subindustries; product line expansions, outsourcing, and platform business models blur lines; rapid innovation can create new subindustries that outpace existing classifications.

The concept is dynamic: new technologies and business models generate emerging subindustries (for example, fintech within financial services or biotech hardware). Analysts should note classification differences across sources and update frequency. Overall, subindustries are essential for granular economic and market analysis.