Private and State-owned Enterprises

After the Second World War, many European governments transformed particular enterprises into state-owned enterprises (SOEs) or created new ones (with complete or partial ownership), making them, by far, the largest single employer in the domestic economy. These state-owned enterprises make up a large part of the modern-day hard and soft infrastructure, and are often formed where there are natural monopolies, or where the enterprises are politically sensitive or strategic.

Natural resource extraction, energy production and/or distribution, transport networks, the military, broadcasting, and healthcare are just some of the typical examples of SOEs within infrastructure. These government activities also extend, in some cases, into the value chain, with full or partial state ownership of strategic industries - such as automobile companies ('Integrated Firms' or 'Lead Firms'), and steel works (‘Chemical & Material Suppliers'): - Strategic in the sense that the goods and technologies produced from these sectors can bring many accumulative benefits across industry as a whole, and/or potential payback may be too long or too risky for the private sector to take the initiative for instance.

In other cases, government often bears financial responsibility in some enterprises that are classed as 'public goods' (i.e., lighthouses, flood defences, bridges, roads, and emergency services); in-which the usage/access can not be restricted just to those people who have paid for it (i.e., blocking the light from the lighthouse for those who didn't pay and contribute to its construction and running costs), and so for a private enterprise, it can be difficult to finance. Here, government's normally tax (socialise the cost to) all users (generally everyone in the economy), and use the income to provide the service or pay someone else to provide it.

Transport or communications SOEs and public good SOEs, in particular (i.e., roads, high-speed Internet...), can both increase productivity of industry, increase public services, and create jobs during construction and through their management. Except for the majority of public goods, these enterprises, briefly mentioned above, can be state-owned or run privately; it is really a political choice; hence the many difference stances taken by countries, states, political parties, academics and the public.


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