There are many many valid answers to this question. It could be the basis of a thesis. However, one of the most significant differences has to do with the sources of funds (profits versus taxes) and the incentive to take part in economic development. The private sector is for-profit. Economically this is not a bad thing, but the economic incentive is to produce goods and services when there is demand. In terms of economic development, the innovations that occur in the private sector help with economic development. The public sector exists because the private sector fails in certain areas once you look at things such as externalities, public goods, lack of symmetric information, etc. The public sector role will not have innovation and profit as its primary motive; however, it still has to be funded, which is through our tax system.
