NRI Papers
No.70   November 1, 2003
  Privatization of Public Services:Agenda and Expectations  
Keita KAWAGOE
       Public businesses (i.e., businesses that are created through privatization of tasks and services previously handled exclusively by public or nonprofit organizations) have recently come in for increased attention. While conventional public businesses are created when some simple tasks and services for citizens are outsourced, the scope of public businesses is likely to expand into new fields in the years to come, including the comprehensive management of public facilities as well as the in-house clerical work of administrative organizations. The types of public businesses that come into being are also expected to see greater diversification, ranging from traditional outsourcing of simple operations to the privatization of public bodies, the establishment of public-private joint ventures and business transfers.
       Three vital steps are necessary in order to enhance public businesses. These include: developing market mechanisms whereby a competitive environment leads to the selection of appropriate corporate suppliers; providing support to redundant personnel in improving or changing their careers; and introducing multi-year concession contracts in granting operating permits. In addition, it is necessary for administrative entities to not only to improve their abilities for designing, contracting and managing public businesses, but also to establish public business promotion schemes, such as setting aside special designated zones for public businesses. At the same time, private companies are generally required to create higher added value than that provided by public organizations, as well as to shoulder the burden of possible risks themselves. Accordingly, it is essential for administrative organizations, private corporations and the general public to enhance their awareness of public business activities.
Contents
I Expansion of Public Businesses
  1 What Are So-Called Public Businesses?
  2 Status Quo of Public Business Development
  3 Background of Public Business Expansion
II New Fields and the Advantages of Public Businesses
  1 Promising New Fields for Public Businesses
  2 Patterns Giving Rise to Public Businesses
  3 Advantages of Public Businesses
III Disincentives and Forward-Looking Agendas in Expanding Public Businesses
  1 Disincentives and Solutions in Expanding Public Businesses
  2 Forward-Looking Agendas in Promoting Public Businesses

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