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The private sector is the part of the
economy An economy (; ) is an area of the production Production may be: Economics and business * Production (economics) * Production, the act of manufacturing goods * Production, in the outline of industrial organization, the act of making products ( ...

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) Profit, in accounting Accounting or Accountancy is the measurement, processing, and communication of financial and non financial information about economic entity, economic en ...
or
non profit A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that op ...
, rather than being owned by the
government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Departmen ...

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 The International Finance Corporation (IFC) is an international financial institution An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject t ...

International Finance Corporation
(part of the
World Bank Group The World Bank Group (WBG) is a family of five international organization ''International Organization'' is a quarterly peer-reviewed academic journal that covers the entire field of international relations, international affairs. It was establ ...

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 of America The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

United States of America
, 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 . It is the world's , with a of more than 1.4 billion. China spans five geographical and 14 different countries, the in the world after . Covering an area of ap ...

China
, the public sector makes up most of the economy.


Regulation

States legally regulate the private sector.
Business Business is the activity of making one's living or making money by producing or buying and selling products (such as goods and services). Simply put, it is "any activity or enterprise entered into for profit." Having a business name A trad ...

Business
es operating within a country must comply with the laws in that country. In some cases, usually involving
multinational corporation A multinational company (MNC) is a corporate A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Nat ...
s 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 (or a labor union in American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the English language native to the United States. Cu ...
, 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
prison A prison, also known as a jail or gaol (dated, English language in England, standard English, Australian English, Australian, and Huron Historic Gaol, historically in Canada), penitentiary (American English and Canadian English), detention ...

prison
s 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 Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules t ...
*
Free enterprise In economics Economics () is the social science that studies how people interact with value; in particular, the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of good ...
*
Private enterprise A privately held company or private company is a company which does not offer or trade its company stock In finance, stock (also capital stock) consists of all of the shares In financial markets A financial market is a market in which ...
*
Private law Private law is that part of a civil law Civil law may refer to: * Civil law (common law) Civil law is a major branch of the law.Glanville Williams. ''Learning the Law''. Eleventh Edition. Stevens. 1982. p. 2. In common law legal systems such as E ...
*
Public economics Public economics (or economics of the public sector) is the study of government policy through the lens of economic efficiency In , economic efficiency is, roughly speaking, a situation in which nothing can be improved without something else being ...
*
Public sector The public sector (also called the state sector) is the part of the economy composed of both public service A public service is a service Service may refer to: Activities :''(See the Religion section for religious activities)'' * Administ ...
*
Three-sector model The three-sector model in economics divides Economy, economies into three Economic sector, sectors of activity: extraction of raw materials (Primary sector of the economy, primary), manufacturing (Secondary sector of the economy, secondary), ...


References

{{Reflist Economic sectors Capitalism