What is the Public Sector?

The public sector consists of organizations owned and operated by the government. It provides services deemed necessary for society’s welfare. Most services offered through the public sector are typically for free or at a reduced cost. The public sector does not include organizations that are voluntary or private.

Public Sector vs Private Sector

You’ve probably heard the terms “public sector” and “private sector” used together. But what exactly are the public and private sectors and how do they differ?

Ownership

When it comes to ownership, organizations in the public sector are owned and operated by either the U.S. government, state government, government bodies or ministries. On the contrary, organizations in the private sector are owned and operated by private individuals and companies. 

Purpose

Organizations in the public sector are motivated by their purpose of providing services to the public at a reasonable cost. In contrast, organizations in the private sector are driven by profit. 

Funding

Funding for public services is usually raised through taxes, fees or grants from other levels of government, whereas private investment or shareholders are what fund private sector organizations.

Employment 

In terms of employment, the public sector receives pay and benefits under a different system than private sector employees. In the private sector, employers have more flexibility — meaning they can set their own employment rules as long as they follow federal and state employment laws.

Efficiency and productivity

Organizations within the private sector tend to focus more on making a profit. Because organizations in the private sector have profit in mind, they tend to be more competitive compared to the public sector. As for the public sector, they have no incentive to make a profit which can result in less efficiency. This does not mean the public sector doesn’t play an important role, in fact, the public sector is vital to a functioning society.

The Role of the Public Sector

As mentioned above, the public sector plays a critical role in any well-functioning society. It’s important to realize that what we do in our everyday lives is made possible because of the public sector. The public sector provides essential goods and services such as public transit, defense agencies, healthcare and public education. 

In addition to this, the public sector also plays an important role in fostering economic growth and stability. The public sector aids economic growth through infrastructure innovation and development – thus generating job opportunities. The public sector issues policies and regulations that support economic stability.

Depending on the country, the role of the public sector can vary. For example, in some countries, the government provides health and education services – to ensure that those services are and remain affordable. 

Types of Public Sector Organizations

There are three types of organizations in the public sector. 

1. Government Agencies and Departments

These consist of agencies and departments that work within and are funded by national, state or local branches of government. 

2. Public Program Agencies

These are organizations that provide goods and services, as well as public programs. They are separate organizations from government agencies and departments and are often governed by a commission or board of directors. 

3. Public Enterprises

Public or state-owned enterprises provide goods and services to the public but are independent of the government. They typically have other sources of revenue that do not just consist of public funding. 

Challenges Facing the Public Sector

The public sector faces several challenges, but below are three of the biggest. 

Budget Constraints

Because the public sector is controlled by the government, the services it provides are subjected to annual budget processes. This means certain services provided by the public sector can be sacrificed when budgetary constraints force cuts to be made. 

Lack of Efficiency

As mentioned earlier, compared to the private sector, the public sector tends to be less efficient. This is partly due to the public sector not being driven by profit and also partly due to lack of competition. 

Cyber attacks

Because public agencies collect and store sensitive data, cybercriminals have started to look at them as targets. One of the cyber attacks used in targeting the public sector is ransomware. Ransomware is a type of malware that encrypts a computer’s files and locks users out of the system. In order for the victim to get their files back and be allowed back into their system, they have to pay a ransom to the cybercriminal. Although ransomware attacks worldwide have been reportedly decreasing in recent months, several public sector organizations in the U.S. suffered attacks in June of this year. 

As cyber attacks in the public sector increase, it’s important for organizations to strengthen their ability to mitigate risk, simplify compliance and combat them. Keeper Security Government Cloud (KSGC) protects agencies against ransomware and cyber threats with zero-trust and zero-knowledge security.