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The Difference Between the Private and Public Sector

Last updated on April 16, 2022

It is important to understand the difference between the private sector and public sector because your privacy rights will differ depending on the legislation that an organization is governed under. In essence, the private sector is composed of businesses that are privately owned, while the public sector is composed of businesses that are publicly owned. The main difference between the two sectors is who owns and controls them. The private sector is controlled by shareholders, who have a vested interest in making sure that their company makes a profit. The public sector is controlled by the government, which means that its primary goal is to serve the public good rather than make a profit.

The Private Sector

The private sector is usually composed of organizations that are privately owned and not part of the government. These usually includes corporations (both profit and non-profit) and partnerships.

An easier way to think of the private sector is by thinking of organizations that are not owned or operated by the government. For example, retail stores, credit unions, and local businesses will operate in the private sector.

Read more about the Private Sector

The Public Sector

public sector

The public sector is usually composed of organizations that are owned and operated by the government. This includes federal, provincial, state, or municipal governments, depending on where you live. Privacy legislation usually calls organizations in the public sector a public body or a public authority. A public sector organization is not to be confused with a public company – which is a company that is traded on a stock exchange. Examples of public companies are Microsoft, Facebook, and Coca-Cola.

Some examples of public bodies in Canada and the United Kingdom are educational bodies, health care bodies, police and prison services, and local and central government bodies and their departments.

Read more about the Public Sector

Video Comparison

Watch this video to learn more about the differences between both sectors:

What are the benefits of the private sector?

The main benefit of the private sector is that it is driven by profits, which means that businesses are constantly innovating and trying to find new ways to make money. This profit motive also means that businesses are more efficient than the public sector, as they are always looking for ways to cut costs and increase revenues. Additionally, the private sector provides more jobs than the public sector, as businesses are always expanding and hiring new employees.

What are the benefits of the public sector?

The main benefit of the public sector is that it is not driven by profits, which means that it can provide services that are not profitable but are still essential to the public good. For example, the government provides police and fire protection, even though these services do not make a profit. Additionally, the public sector is more stable than the private sector, as businesses can go bankrupt if they are not profitable, but the government will always be there to provide services.

Which one is more efficient?

The private sector is usually more efficient than the public sector, as businesses are always looking for ways to cut costs and increase revenues. The public sector is often less efficient because it is not driven by profits and does not have the same incentive to cut costs and increase revenues.

How do they impact economic growth?

The private sector is the main driver of economic growth, as businesses are constantly innovating and expanding. The public sector also contributes to economic growth, but its impact is not as great as the private sector.

What is the role of government in each sector?

The government plays a different role in each sector. In the private sector, the government regulates businesses to ensure that they are operating legally and fairly. In the public sector, the government provides services that are essential to the public good but may not be profitable.

Do they have different goals?

The private sector is driven by profits, while the public sector is not. This means that the two sectors have different goals. The private sector’s goal is to make money, while the public sector’s goal is to serve the public good.

What happens when there is a mix of both public and private ownership?

When there is a mix of both public and private ownership, it is called a mixed economy. A mixed economy typically leads to increased efficiency and stability, as the public sector can provide services that are essential to the public good while the private sector drives economic growth.

17 Comments

  1. Renee Hunter Renee Hunter December 23, 2021

    Thank you for sharing such a creative post as per your interest. It’s nice.

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  2. Lucia Lucia March 26, 2019

    How does public sector compliment private sector

  3. Marcella Mansaray Marcella Mansaray June 6, 2018

    This is very useful information more informed for any indivisual

  4. Joseph Joseph February 17, 2018

    Wage wise shouldn’t be lower in grades of work and some pay like government wages for all population in the public private sector ln all country ,?

  5. sabari sabari January 31, 2018

    i need simply meaning for Public Sector Co. Government Or Private

  6. Anonymous Anonymous December 1, 2017

    anyone know the author of the article ?

  7. Desire Desire May 22, 2017

    Brilliant piece f information and well presentd kip t up

  8. Abdulsamiu Abdulsamiu February 27, 2017

    That’s amazing

  9. Ananda Mondal Ananda Mondal January 28, 2017

    Easy and effective.

  10. Anoymous Anoymous September 13, 2016

    We can say that there is poor service in public sector but this doesn’t mean you disregard it. You don’t even have permanent job in private sector.

  11. mina mina July 20, 2016

    really help ful

  12. RheddWynter RheddWynter April 7, 2016

    This is useful information
    Thank you, Roy Malone for the true comment (2thumbs)

  13. ritu ritu March 12, 2016

    this is very useful information

  14. roy malone roy malone March 11, 2016

    if the public really knew how much power we have than we could go far in this lifetime

  15. Aiman Aiman December 14, 2015

    This is really very good info

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