In terms of ownership & control all business

fall into one of 2 sectors

Businesses in this sector are usually known as PUBLIC CORPORATIONS

These are businesses which government own and – usually – control.

Most of the time these will be businesses dealing with Goods and Services that the government deem strategically valuable.

Typical examples include Electricity, Health, Education.

The main objective of public business should be customer welfare

The public sector tends to be large in societies who believe the government should take an active role in controlling resources & allocation. They have a

poor record on efficiency. .

Businesses in this sector can take many different forms.

These are businesses which private individuals own and control.

The main objective of private business is usually profit

The private sector tends to be large in societies who believe that the pursuit of profit will create competition, which will create efficiency. They have a poor

record on even allocation of resources.

You can sometimes get a• Public-private partnership (PPP)

which describes a venture which is funded and operated through a partnership of government and one or more private sector companies.

•In other types capital investment is made by the private sector on the promise of a contract with the government to provide certain services

In some types of PPP, the government uses tax revenue to provide capital for investment, with operations run jointly with the private sector

There is a third way!

Discuss what you know about the dis/advantages of each

sector

What businesses are in what sector on ES – and why?