• Home to LMIC
• Virtual Labor Market Data System
  • Instructions for Using the Virtual System
  • Job Openings Data
• Career Exploration & Planning
  • Career Publications
  • Explore Occupations by Career Cluster
  • Explore Occupations by Interest Area
  • Hot Careers
  • Take the South Dakota Career Interest Survey
• Consumer Price Index
• Demographics
  • Affirmative Action/EEO
  • Area Profiles
  • Population
• Economic Snapshot
• Employee Benefits
• Employment Projections
  • By Industry
  • By Occupation
  • Hot Careers (High Demand-High Wage)
• Labor Force & Unemployment
• Labor Supply
• Overview of the Current Labor Market
• Surveys We Conduct
• Wages & Income
  • Wages by Occupation
  • Wages by Industry
  • Income
  • Minimum Wage Information
  • Prevailing Wages
• Workers by Industry
  • Nonfarm worker levels
  • Quarterly Census of Employment & Wages
• Tools & Resources
  • Postsecondary Graduate Outcomes System
  • South Dakota Career Interest Survey
  • Tapping Into the Power of LMI (recorded webinar)
  • Instructions for Using the Virtual Labor Market Data System
  • Virtual Labor Market Data System
• Publications
  • Annual Labor Market/Workforce Reports
  • Career Publications
  • South Dakota e-Labor Bulletin (current)
  • South Dakota e-Labor Bulletin Archive
  • South Dakota e-Labor Bulletin Articles
  • Other LMIC Publications
  • Order Publications
• References
  • Definitions
  • Program Overviews
  • FAQ
  • Related Sites
  • Release Dates
  • Survey Legitimacy
• What's New
• Can't Find It?

South Dakota e-Labor Bulletin

December 2024

Turning to a professional

Individuals and businesses have to navigate complex challenges in today’s world to be successful. Advancements in technology, legal ramifications of business transactions, and the rapid speed at which things change have all played a part in the complexities.

It often becomes more efficient for those individuals and businesses to turn those issues over to experts to deal with. Those experts specialize in exactly the type of problem-solving needed. This allows the individual or business to focus their efforts on what they do best.

For example, let’s take a commercial building construction company. Rather than continuing to employ their own architects and drafters, they outsource the architectural design and drafting of their projects. This allows them to focus on actual construction operations.

Providing an array of outsourced, specialized services has become a big component of South Dakota’s labor economics with their own industry classification.

An industry of outsourced services

Professional, Scientific, and Technical Services is a two-digit sector (broad grouping) in the North American Industry Classification System (NAICS). NAICS sectors break down into more detailed groupings called subsectors (three-digit NAICS codes). Within the Professional and Business Services sector (NAICS 54) is one subsector, also titled Professional, Scientific, and Technical Services (NAICS 541). Subsectors are then broken into even more detailed industry groups (four-digit NAICS codes).

The table below shows the NAICS structure in this industry and gives more specific examples (at the four-digit NAICS level) of the types of establishments included.

South Dakota has many businesses that offer an array of these professional, scientific, and technical services for their clientele. Activities range from legal advice and title abstract services, to building inspection and geophysical surveying and mapping, and from interior design to biotechnology research.

Commonalities of businesses providing Professional, Scientific and Technical Services

Although the types of services offered are highly specialized and vary widely, establishments in this sector share some common ground:

• They offer customized knowledge-based services to help customers achieve their goals.
• They create value by meeting intangible needs, rather than producing tangible products.
• They handle processes where human capital is the major input.
• The activities they perform require staff with a high degree of knowledge, experience, and worker skills; they sell that expertise. Much of the expertise requires degrees or specialized training, though not in every case.
• Services are often structured as projects, with great emphasis on detailed communications with the client up-front to understand their needs.
• Individuals or teams are assigned to a particular project and have responsibility for delivering services to clients.
• Services are fulfilled via consultation, advice, or hands-on work.
• Customers can be small businesses, multinational companies, boutique firms, or solo freelancers.

These establishments are generally defined based on their particular proficiency. Because of the unique and highly specialized nature of the services provided, it can be challenging and tedious to classify an individual establishment into the most appropriate detailed NAICS industry. But proper classification is paramount to ensuring accurate employment and wage data are available at the industry level.

We should note the Professional, Scientific, and Technical Services sector excludes establishments providing day-to-day administrative services like billing, recordkeeping, and physical distribution. Those types of establishments are instead classified in the sector Administrative and Support and Waste Management and Remediation Services (NAICS 56).

Growth in South Dakota

South Dakota’s Professional, Scientific, and Technical Services sector has experienced great growth in terms of the number of establishments, employment, and wages in the past 10 years. As the table below indicates, all three components have increased consecutively since 2014. The number of establishments doubled, reaching 6,136 in 2023. Employment grew 45% during this same 10-year period, topping off at 17,912 in 2023. Annual wages reached $83,201.

Delving deeper into the industry group level, South Dakota has had a big increase in the number businesses in the Management, Scientific, and Technical Consulting Services group (NAICS 5416). Many of these establishments are small-scale, consisting of one to three employees. Businesses in this industry provide operating advice and assistance to other organizations on administrative management issues. Examples are financial planning, equity, and asset management; medical office management, planning, or consulting; strategic planning; site selection; new business start-up assistance; and business processing improvement.

Management, Scientific, and Technical Services also includes organizations that provide a full range of human resources, marketing, physical distribution, logistics, and other administrative management consulting services to their customers. Business management and consulting remain in demand, largely due to the changes in business operations. Recommendations by these professionals are backed by large amounts of research and data.

Cybersecurity’s emergence on the scene

Cybersecurity has been a particularly fast-growing component in Professional, Scientific, and Technical Services. Cybersecurity is the art and science of protecting networks, devices, and data from unauthorized access or criminal use. Experts providing cybersecurity also ensure confidentiality, integrity, and availability of information.

We rely on computers and the internet for everything from personal and business communications and entertainment like video games and social media, to online shopping and even medical care. We use not only computers but tablets, smartphones, and even watches to communicate and conduct transactions, often providing extensive personal and business data. Protecting that data from unintended users is big business for good reason. Cybersecurity breaches can lead to extensive financial loss (for system downtime, recovery of data, reimbursement to affected parties, and even legal fees). Also at risk are immeasurable impacts like reputational damage, and eroded trust and loyalty.

No single industry covers all aspects of cybersecurity. As you can imagine, coding cybersecurity businesses into the appropriate, detailed NAICS classification is especially challenging. It depends on the specific type of cybersecurity services provided. For example, a company providing primarily customized cybersecurity software and programming services for individual clients is categorized under “Custom Computer Programming Services” (within NAICS 5415). A company which designs whole computer systems to integrate computer cybersecurity hardware, software, and communication technology, is coded as “Computer Systems Design Services” (also within NAICS 5415).
However, if a company’s prime function is publishing cybersecurity software, they are instead considered Software Publishers. They may publish and distribute software through subscriptions and/or downloads. They are classified in NAICS 5132—part of a completely different sector (Information, NAICS 51). As you can see, it can be difficult to properly classify a business. But it is one of the prerequisites of making available the type of information provided above. And you have us for that, just like individuals and businesses have experts in the Professional, Scientific, and Technical Services sector to rely on.