| Economic sectors |
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| Three-sector model |
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| Additional sectors |
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| Theorists |
| Sectors by ownership |
Theprivate sector is the part of theeconomy which is owned by private groups, usually as a means of establishment forprofit ornon profit, rather than being owned by thegovernment.
The private sector employs most of theworkforce in some countries. In private sector, activities are guided by the motive to earn money, i.e. operate bycapitalist standards.
A 2013 study by theInternational Finance Corporation (part of theWorld Bank Group) identified that 90 percent of jobs indeveloping countries are in the private sector.[1]
In free enterprise countries, such as theUnited States, the private sector is wider, and the state places fewer constraints on firms. In countries with more government authority, such asChina, the public sector makes up most of the economy.[2]
States legallyregulate the private sector.Businesses operating within a country must comply with the laws in that country. In some cases, usually involvingmultinational 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 stronglabour unions, 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 chooseself-regulation by applying higher standards for dealing with their workers, customers, or the environment than the minimum that is legally required of them.[3]
There can be negative effects from the private sector. In the early 1980s, theCorrections Corporation of America pioneered the idea of runningprisons for a profit. Today, corporate-run prisons hold eight percent of America's inmates. Since it is from the private sector, their main priority is not rehabilitation, but profit. This has resulted in manyhuman rights violations across the United States.[4]
