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Private Sector |
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21st-Century
Governance: Private Sector
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The
private sector is the economic engine of society. It produces
the jobs, markets, financial, and intellectual exchanges that
enable the conversion of raw commodities and ideas into useful,
value-added products and services that meet individual needs.
The private sector, however, is much maligned by voices in the
public sector and persistently targeted by the journalistic
world because its severely competitive nature. Unlike the other
two sectors, the private sector operates under a harsh system
of accountability. Businesses that deliver value-added products
or services, if properly staffed and managed, can make a profit
and remain in competition while those which do not, cease to
exist.
Unfortunately, the atmosphere of the private sector occasionally
breeds deviant behavior in an attempt to remain competitive.
The recent accounting scandals among some prominent US corporations
are a prime example.
The efficiency and productivity, however, created by the harsh
atmosphere of competition yields results. The public sector
is not bound by the private sector's system of accountability
making results and outcomes less important than expenditures
and output. For instance, if a firm in the private sector implements
a change and does not produce a better result because of that
change, the firm has wasted money. Therefore, the firm's profit
will decrease, and it will suffer.
The fundamental difference between the public and private sectors
is accountability. The public sector does not face the same
accountability requirements that are naturally found in the
private sector. Therefore, change is often implemented without
regard for the result. Public officials waste valuable resources
and no visible change occurs.
At the turn of the 20th Century, in the United States, business
did not deliver health care, pensions, education, or any other
social services. Due to the government's inability to adequately
provide social services, US citizens directed, enticed or otherwise
engaged the private sector in the delivery of social-sector
objectives. Now, private-sector organizations provide day care,
health care, education, and even personal-change programs to
combat chemical abuses or educational deficiencies. In this
circumstance the private sector is more efficient than the public
sector at translating change into results.
All societies are faced with the same strategic question of
balancing the three sectors of society, even if they do not
consciously acknowledge the tension among them. Those that opt
to devote larger amounts of GDP to the public sector invariably
see reduced rates of overall private-sector economic growth.
Unfettered capitalism, however, has also produced a string of
failures. In addition, societies that overpay the social sector,
in church-run states for example, invariably fail to change
at the pace of the real world and fall behind. The three sectors
cannot exist independently and they must cooperate cohesively
with each other. |
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