The private sector is also known as the citizen sector of the capitalism marketplace. The reason for this is because this part of the economy is run by citizens. They are private people that started a business on their own. The private sector is not controlled by the state what so ever. It is totally independent from any state inputs. They are only bound by the constitution of South Africa. The main goal of the private sector is profit, as mentioned earlier. With that being said, it is not the only role they play in the economy.
One of the important roles of the private sector is to maintain economic freedom in South Africa. Without the private sector in a country’s economy, the state will be able to regulate all the business activities of a country. Therefore the role of the private sector is undoubtedly an important one.
Furthermore, the private sector also gives the individual the chance to be creative. This also promotes entrepreneurship through allowing people to pursue their own creativity. If everything were controlled by the state, there would be few to no businesses where you could really find creative ideas.
The private sector is also known to be of help when a sudden problem arises. One of the most resent tragedies that hit the world, especially West-Africa, is Ebola. This virus has been the cause of many deaths in Africa and some in other parts of the world. The private sector of South Africa came together and donated a whopping twelve million rand to the cause. Some of the doctors in the private sector also went into Africa to be of aid in treating the infected.
Not only do they donate to causes this big. The private sector can also be seen having an impact on their immediate communities. Some of the businesses aid in being involved in programs that uplift the community. Other will present classes for the community to improve their skills. Another way in which the private sector has been coming through is with providing bursaries to grade twelve’s that will enable them to get a degree and will ensure them of a career when they have finished their studies.
When entrepreneurs enter the private sector, they play a vital role in the upliftment of people that comes from previously disadvantage backgrounds. In doing this the, private sector also aids in decreasing poverty, which is a major issue in South Africa. The private sector also plays a role in the provision of quality products and services. They sometimes have to compete against other companies in the private sector and in some cases, against public businesses. This competition is to the advantage of the consumers. It will ensure that the private sector delivers products and services of a high quality at reasonable prices. Without the private sector, the state would have been able to control the price of everything. In essence, the private sector prevents this in being able to set their own prices.
Some people might argue that the private sector is only concerned about profit. What these people are not taking into account is that they use the execs profit and putting it back into the community. The role that the private sector plays should be made more public.