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What are the Different Types of Businesses in the Public Sector?

By Keith Koons
Updated May 16, 2024
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The different types of businesses in the public sector are basically government-owned undertakings which are involved in the production and delivery of goods and services to people. These units differ from their private sector counterparts in the sense that they may or may not be profit-oriented, with their primary function typically being that of a catalyst in promoting commercial growth. Public sector undertakings are meant to include any type of business ranging from retail selling to utility services like electricity and education as long as the entity conforms to the guidelines specified by the government.

When the government owns a minimum of 51 percent in a retail firm, the stores of that business operate in accordance with the tax patterns and regulations applicable to all other businesses in the public sector. Retail outlets like department stores, discount stores and supermarkets are usually classified by the products they sell. This branch is meant to generate work within the public sector and spur the economic growth by providing incentives to individuals as well as organizations.

One of the major businesses in the public sector is manufacturing, which involves the large-scale conversion of raw materials into finished products. The universal importance of manufacturing lies in the fact that most societies are dependent on the supply of finished goods for their survival and that it is the efficiency of industrial production which determines economic strength. It is through manufacturing that the government creates hordes of public sector jobs, and when combined with private sector employment, this can result in a contribution towards growth. Without these types of businesses in the public sector, countries would often have to rely largely on imported goods while sending a large portion of their tax revenues overseas.

Among the various businesses in the public sector, it is the service industries in form of hospitality, repair, health care and education which are the most widespread. Services businesses differ from the other types of employment in the public sector due to the intangible nature of the services provided in place of a visible product. These types of positions employ educated workers that help shape various forms of government, the way children are taught, and how tax revenue is spent. Other businesses in the public sector would include hospitals, libraries, and even non-profit organizations.

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