Chapter 27 – The Private Sector & the Public Good

What do we mean by the private sector?

The private sector includes businesses owned and operated by individuals, families, or groups—not by government or nonprofits. These companies create goods or offer services for customers and make their own decisions about how to operate. Private-sector organizations influence employment, investment, and the availability of products and services in communities.

When we talk about companies and businesses, we are usually referring to the same thing. A company or business is an organization that sells products or services, hires workers, and seeks to earn a profit. Businesses can take many forms: large corporations that operate internationally, firms that focus on a single region, or small shops owned by one person.

The private sector is different from the public sector, which includes government agencies funded by tax dollars, and the nonprofit sector, which includes organizations that use donations or grants to serve communities rather than earn profits.