The private sector is the part of the
economy, sometimes referred to as the citizen sector, which is owned by private groups, usually as a means of establishment for
profit
Profit may refer to:
Business and law
* Profit (accounting), the difference between the purchase price and the costs of bringing to market
* Profit (economics), normal profit and economic profit
* Profit (real property), a nonpossessory intere ...
or
non profit, rather than being owned by the
government.
Employment
The private sector employs most of the workforce in some countries. In private sector, activities are guided by the motive to earn money.
A 2013 study by the
International Finance Corporation (part of the
World Bank Group) identified that 90 percent of jobs in developing countries are in the private sector.
Diversification
In free enterprise countries, such as the
United States, the private sector is wider, and the state places fewer constraints on firms. In countries with more government authority, such as
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
, the public sector makes up most of the economy.
Regulation
States legally regulate the private sector.
Business
Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for pr ...
es operating within a country must comply with the laws in that country. In some cases, usually involving
multinational corporations that can pick and choose their suppliers and locations based on their perception of the regulatory environment, local state regulations have resulted in uneven practices within one company. For example, workers in one country may benefit from strong
labour unions
A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ...
, while workers in another country have very weak laws supporting labour unions, even though they work for the same employer. In some cases, industries and individual businesses choose to self-regulate by applying higher standards for dealing with their workers, customers, or the environment than the minimum that is legally required of them.
There can be negative effects from the private sector. In the early 1980s, the Corrections Corporation of America pioneered the idea of running
prisons for a profit. Today, corporate-run prisons hold eight percent of America's inmates. Since it is from the private sector, their main priority isn't rehabilitation, but profit. This has resulted in many human rights violations across the United States.
[Bauer, Shane. "Private prisons are shrouded in secrecy. I took a job as a guard to get inside-then things got crazy."Mother Jones. N.p., 06 June 2017. Web. 10 June 2017.
]
See also
*
Company law
*
Free enterprise
In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ...
*
Private enterprise
A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...
*
Private law
Private law is that part of a civil law legal system which is part of the ''jus commune'' that involves relationships between individuals, such as the law of contracts and torts (as it is called in the common law), and the law of obligations ( ...
*
Public economics
*
Public sector
*
Three-sector model
References
{{Reflist
Economic sectors
Capitalism