Private Sector
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ScribdTranslationsPrivate Sector
Uploaded by
ScribdTranslationsPrivate sector
In economics, the private sector, which contrasts with the public sector, is that part of
theeconomywhich seeks profit in its activity and that is not controlled by the
State. In contrast, thecompaniesthat belong to theStateare part of thepublic sector.
Non-profit private organizations are included as part of thesector
volunteer.
Legal structure
The legal form in which the private sector can develop is very varied and goes
from the individual exercise by a person of a business activity, to the use
of a wide variety of legal forms depending on each country.
The role of the private sector in economic activity
The private sector is allowed to establish and develop any type of activity.
except for some public sector. The private sector is expected to diversify the
industrial production and to make large investments, its role is also to attract the
investment and technology from abroad. Its role is also to contribute to
development and job creation.
But they can also be made up of small companies, it can be as small as a stall.
ambulant or a small business because there they work for themselves and alone for their
own account and all income is personal and for his profit.
Relationship between both sectors
The private sector also integrates into the activity of the public sector, through the
concession and subcontracting of services to the private sector.
The movement of an activity from the public sector to the private sector is called
Privatization.
The process by which companies integrate into the public sector comes from the
private activity is referred tonationalization.
Historical evolution
In the period of the global economy following theWorld War II, the
governments of many countries promoted public sector participation in
to the detriment of the private sector. In the countries of the communist area, significant
nationalization processes and practically all economic activity developed
was produced through the public sector.
Since 1980, the weight of the public sector within economic activity has been
decaying in favor of the private sector, including a set of privatizations that
it lasted during the nineties and the early years of the twenty-first century.
Currently, even the countries that maintain communist regimes, such asChina,
CubayVietnamthey have a more or less significant weight of the private sector within the
production.