What is the role of public enterprise?


Quick Answer

The Encyclopedia Britannica states that the role of a public enterprise is to provide services, such as utilities, telecommunications, broadcasting and transport. A public enterprise is controlled by a public authority, and it is wholly or partly owned by the state.

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Full Answer

In the United States, there are few public enterprises. They are intended to be operated on behalf of the public's interest. For ideological reasons, industries like banking, insurance, steel, coal mining and railways have been nationalized in some countries. In less developed and newly independent countries, the public enterprise sector is large. Most forms of finance, commerce and production belong to the state in communist countries.

According to the Management Study Guide, public enterprises play a vital economic, developmental and political role in a country. They are important in promoting national development. Governments use them to guide and command the economy. Governments also own the strategic industries and sometimes fill the inadequacies of the private sector by operating in areas that need large investments beyond the capacity of private enterprises. Public enterprises are also used to provide employment, prevent unrest and maintain political stability. The Management Study Guide notes that with public enterprises, developing countries are able to become less dependent on other nations and become more self-sufficient.

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