Having public sector is important for a country. Every country needs well-managed public-sector enterprises to ensure continuous operations of the country and common prosperity for its citizens. Because private sector alone cannot exist on its own due to its nature, there are several important reasons for public sector business activity.
First, government-owned business organizations can ensure that everyone in the society has access to basic services either for free or for very low price such as education in the form of public schools, health care and nursing services, public transportation such as buses, subways and trains, roads, public parks, public libraries, etc.
State-owned enterprises can also avoid wasteful competition as the government is able to achieve enormous economies of scale (cost savings from operating on a large national scale) in the provision of certain services. Some examples include postal services, national military services or basic set of vaccinations for new-born children.
Another crucial role of state-owned businesses is to provide protection for all of the citizens and companies through public safety services – the police (e.g. New York City Police Department), firefighting, emergency operators, etc. The courts that govern the law and order in the country as well as various national and local governmental buildings are also owned and managed by the public sector.
Public-sector businesses are very often large in scale to create sufficient employment in the whole country, e.g. governments tend to be a large employer of teachers, doctors, nurses, scientists, pilots and flight attendants, policemen, soldiers, etc.
The government can also bail out heavily-troubled companies (e.g. banks or airlines) by offering them financial help to stay in business in exchange for something else such as company stocks, stock warrants, product supplies at discounted price or other concessions.
Finally, during crisis situations, the governments can also stabilize the economy to prevent further economic turmoil by nationalizing (buying) struggling companies from the private sector in the strategic industries for the country such as electricity, gas or water suppliers, oil pipelines, railway companies or coal mines. Otherwise, bankrupt businesses that are important for the country could cause massive unemployment and operational disruptions during dire economic times.
