Private Sector

The private sector is a part of an economy that consists of for-profit businesses and enterprises that are owned and operated by individuals or companies rather than the government. These entities are driven by market forces and aim to generate profit for their owners and shareholders. In free market capitalist societies, the private sector usually represents the largest portion of the economy, encompassing a wide range of industries and services. For example, in the U.S., not-for-profit organizations and charities are excluded from the private sector and instead belong to the “voluntary sector.”

Some may confuse publicly listed companies with the public sector, but this is not the case. Publicly listed companies are founded by individuals and are owned by shareholders, who can be members of the public or other businesses, through the purchase of stocks. These ‘public’ companies operate within the private sector, driven by profit motives and market forces, unlike the public sector, which is managed by the government.