is occurs when an economic agent chooses to concentrate on producing a
particular good or service and then trade with others in order to survive.
can specialise, e.g.:
specialisation can also occur, e.g.:
specialise in certain goods or services, e.g.:
Specialisation by individuals is called the division
of Labour. Adam Smith described the effects of the division of labour on pin
workers in 1776. He stated that one worker might be able to make 20 pins a
day, but if division of labour occurred and 10 workers each specialised in a
different task he estimated they could make 48,000 pins.
This increase in labour productivity occurs for a
number of reasons:
allows workers to gain skills in a narrow range of tasks.
This means workers are far more productive then if they were a jack
of all trades.
- It makes it cost
effective to provide workers with specialist tools, e.g., it wouldn't make
sense to give every farm worker a tractor, but it's possible to provide a
group of workers a tractor they can share.
- Time is saved as
workers don't constantly have to change tasks, e.g. moving from one
workstation to another.
- Workers are able to
specialise in tasks they are best suited to.
division of labour does have limitations. Jobs that are very narrow can
become tedious and boring. Workers will do everything possible to avoid work,
e.g. calling in sick, long break, frequent visits to the toilet. This will
result in a drop in productivity as output per worker falls.
size of the market might limit the degree of specialisation. A chemist or
post office might open in a small village, but finds that he has to sell
other products in order to survive.
specialisation has disadvantages. African countries are often dependant on
only one crop. If the price falls or crop fails, it can be a disaster for the
economy and workforce.
north of England has suffered greatly due its dependence on heavy
manufacturing. Shipyard, steel and textile workers paid a heavy price for
specialisation when demand for their skills fell.