Predicting SNI Codes from Company Descriptions : A Machine Learning Solution

Abstract: This study aims to develop an automated solution for assigning area of industry codes to businesses based on the contents of their business descriptions. The Swedish standard industrial classification (SNI) is a system used by Statistics Sweden (SCB) for categorizing businesses for their statistics reports. Assignment of SNI codes has so far been done manually by the person registering a new company, but this is a far from optimal solution. Some of the 88 main group areas of industry are hard to tell apart from one another, and this often leads to incorrect assignments. Our approach to this problem was to train a machine learning model using the Naive Bayes and SVM classifier algorithms and conduct an experiment. In 2019, Dahlqvist and Strandlund had attempted this and reached an accuracy score of 52 percent by use of the gradient boosting classifier, but this was considered too low for real-world implementation. Our main goal was to achieve a higher accuracy than that of Dahlqvist and Strandlund, which we eventually succeeded in - our best-performing SVM model reached a score of 60.11 percent. Similarly to Dahlqvist and Strandlund, we concluded that the low quality of the dataset was the main obstacle for achieving higher scores. The dataset we used was severely imbalanced, and much time was spent on investigating and applying oversampling and undersampling as strategies for mitigating this problem. However, we found during the testing phase that none of these strategies had any positive effect on the accuracy scores.