2 min read

Unlocking the Power of Taxonomy

Unlocking the Power of Taxonomy

Nope. Not stuffed animals. We're talking about taxonomy.

Taxonomy is an often-overlooked yet fundamental concept that silently shapes our lives.

Similar to the mysterious intricacies of the global monetary system or the ozone layer, taxonomy is a concept that deserves our attention.

Join us as we unravel the significance of taxonomy in our daily existence and explore its far-reaching implications.

The Fundamental Role of Taxonomy in Our Lives

Taxonomy, like the money supply or the ozone layer, is a stealthy — yet fundamental — concept in our lives that, unfortunately, only a few people know much about.

Taxonomy makes the world go around: all kinds of things would stop moving without it. But only a small number of people — either inside or outside of the world of the web that manages our lives online — can explain what a taxonomy actually does. It’s generally a vague concept to designers and developers.

Business people often have little idea what it is or why it matters.

Even many information architects, and other people with backgrounds in library science, tend to ignore the social and economic significance of taxonomies.

The Impact of Taxonomy on Decision-Making

Taxonomy matters because it is the basis of numerous decisions that affect us. But it can be misunderstood when seen as being primarily about making individual decisions: specifically, looking up information.

Taxonomy’s true influence comes from how it supports collective, repeatable decisions and enables the aggregation of data and actions. Rule-based decisions, whether applied by humans or machines, depend on taxonomies.

Four Taxonomies That Shape Our World

Taxonomies shape many of the most important decisions in our world — those that are made again, and again.

Four taxonomies in particular influence the basic dimensions of our lives:

  1. What We Eat: Codex Alimentarius: Classifying what we eat

  2. How Money Is Made and Used: The GAAP taxonomy: Is a company profitable and viable?

  3. What Goods and Services Are Produced: NAICS taxonomy: What’s the composition of the economy?

  4. How We Evaluate Our Impact on the Environment: The Green taxonomy: Classifying climate impacts

Codex Alimentarius: Classifying What We Eat

Eating is an elemental need: it supplies nourishment. Something so basic seems far removed from the abstraction of taxonomy. And few would expect a taxonomy with a Latin name to be important to the modern world economy.

The GAAP Taxonomy: Is a Company Profitable and Viable?

If you work for a company or have invested your retirement savings in companies, you want to know if a company is profitable. And you need to know their statements are reliable. Several high-flying firms have collapsed quite suddenly in recent months. People need to trust financial data.

NAICS Taxonomy: What’s the Composition of the Economy?

It’s difficult to know what’s important in the economy, such as how big a sector is or how fast it is growing. Some sectors seem to get more media attention than others.

And it’s not always clear what is different about sectors. For example, is fintech different from banking? Companies and governments need to understand changes in the economy when making investment decisions.

The Green Taxonomy: Classifying Climate Impacts

Lastly, we turn our attention to another thing humans produce, but one that’s less desirable: greenhouse emissions. 

Countries and companies are pledging to be carbon-neutral or even carbon-negative by specific dates. But what do these commitments really mean? How will emissions and outsets be calculated? And how will everyone agree these commitments are measured?

The Power of Taxonomies in a Changing World

In a rapidly evolving world, taxonomies serve as the backbone of structured information, enabling us to make sense of complex systems, whether it's in the realms of finance, economy, or the environment. These taxonomies not only classify but also facilitate understanding and informed decision-making in our interconnected world.


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