What is the Business Sector?
Business sector is a labor term that refers to a type of economic sector, or a part of a domestic economy. It is considered to be one of four parts of an economy when the economy is measured using an ownership-based system. The business sector includes the part of the economy that operates for profit. It does not include economic factors in private households, in the government, or in organizations operating as non-profits. Other ownership-based economic sectors include the private sector, the community sector, and the public sector.
In common use, most frequently by the Bureau of Labor Statistics (BLS) in the United States, the term business sector often refers to business interests observed in contrast with interests from organizations classified in other sectors. Determining how to classify businesses within economic sectors can seem complicated, but it is actually fairly simple. Organizations working within the business sector are run to make a profit and are not owned by the government. The private sector includes the part of the economy concerned with private households, like a family with one, two, or no employed parents. Government organizations, like driver licensing departments and the mail service, are considered to be in the public sector, which is sometimes called the state sector.
When organizations are classified by ownership sectors, they are not always classified by industry. Companies can offer the same type of service while being classified within different ownership-based sectors. For example, though the United States Post Office (USPS) handles package and document delivery like the United Parcel Service (UPS), the USPS is considered to be public or state sector while UPS is measured within the business part of the economy.
Points of interest for economic experts studying the business sector include the cost of labor and employment versus unemployment. Other important data in this economic sector involves money measurements like profits, costs and losses. Overall, when an economists examine the business sector, they seek to understand the state of the business part of an economic system. Understanding the business sector can help analysts predict future trends in the business economy and observe how changes in the business part of an economy affect the economy overall.
Sectors within an economy can be measured using several schools of thought. Ownership-based sectors like the business sector make up just one way to describe parts of a country's economy. Another way to use economic sectors when discussing a domestic economy is to refer to individual types of industries that operate within a company's economy. These sectors are commonly considered to be part of a larger industrial sector.
Discuss this Article
Post your comments