A Unified Framework to Classify Business Activities into International Standard Industrial Classification through Large Language Models for Circular Economy

TL;DR

This paper presents a method using Large Language Models to classify business activities into the global ISIC standard, aiding circular economy initiatives by enabling standardized knowledge repositories.

Contribution

It introduces a novel LLM-based approach for classifying economic activities into ISIC, achieving high accuracy and supporting global circular economy efforts.

Findings

Achieved 95% accuracy on a 182-label dataset

Successfully classified diverse business activities into ISIC

Facilitates standardized knowledge sharing across regions

Abstract

Effective information gathering and knowledge codification are pivotal for developing recommendation systems that promote circular economy practices. One promising approach involves the creation of a centralized knowledge repository cataloguing historical waste-to-resource transactions, which subsequently enables the generation of recommendations based on past successes. However, a significant barrier to constructing such a knowledge repository lies in the absence of a universally standardized framework for representing business activities across disparate geographical regions. To address this challenge, this paper leverages Large Language Models (LLMs) to classify textual data describing economic activities into the International Standard Industrial Classification (ISIC), a globally recognized economic activity classification framework. This approach enables any economic activity descriptions provided by businesses worldwide to be categorized into the unified ISIC standard, facilitating the creation of a centralized knowledge repository. Our approach achieves a 95% accuracy rate on a 182-label test dataset with fine-tuned GPT-2 model. This research contributes to the global endeavour of fostering sustainable circular economy practices by providing a standardized foundation for knowledge codification and recommendation systems deployable across regions.