From Wikipedia, the free encyclopedia

In economics, the private sector is that part of the economy which is both run for profit and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector; private, non-profit organizations are regarded as part of the voluntary sector.

A variety of legal structures exist for private sector business organizations, depending on the jurisdiction in which they have their legal domicile. Individuals can conduct business without necessarily being part of any organization.

Even in countries where the private sector is regulated or even forbidden, some types of private business continue to operate within the underground economy.^{[citation needed]}

The private sector is allowed to set up and grow any industries excluding of a few public sectors. Almost all the consumer goods industries and majority of capital goods are open for private sector. The private sector is expected to diversify industrial output and make extensive investment in industries. It is expected to enter into contacts of Foreign Direct Investment, foreign capital and advanced technology. It is also expected to increase the contribution of private sector to the country's output and employment.

The private sector employs the majority of the workforce in some countries.^{[citation needed]} In some countries such as the People's Republic of China, the public sector employs most of the workers. ^[1]

The private sector is also integrated into the workings of the public sector, with the use of outsourcing or government contracts.

The moving of businesses from the public sector to the private is called Privatization. Privatization is praised by neo-liberals and has occurred in Latin America.

The moving of enterprises from the private sector to the public is called Nationalisation. Communist countries such as the USSR, Cuba, and the PRC generally nationalized all industries.

Businesses also move from non-profit sector to the private sector. Microcredit was originally non-profit, but as it was realized that it could actually make money, private businesses have entered the field.

• Eurostat
• United Nations Statistics Division - [1]
• UNESCO Institute for Statistics - [2]
• OECD Statistics Division - [3]
• PARIS21 [4]
• International Association for Official Statistics (IAOS) [5], a section of the ISI [6]
• Worldwide statistical sources

• Free enterprise
• Private law
• Company law

1. ^ Joe Zhang. China’s private sector in shadow of the state. ft.com. Retrieved on 2007-07-06.