Specialization and Division of Labor
Specialization: it is concentrating on one task or process. It may take place in
a country, a factory, an office or regions within a country. It is achieved by
dividing up the production process into smaller tasks with people performing
the same tasks repeatedly. Specialization was preceded by barter and self-
sufficiency.
Comparative advantage: it is a concept that countries can benefit by
specializing in producing the goods and services that they are the most
efficient at. The countries will then trade goods that are surplus with other
countries to buy the goods they don’t produce themselves.
Division of labor: it is dividing a whole process into a number of smaller
tasks. Each task is under taken by one person again and again. This
encourages specialization.
Levels of specialization:
1. Regional specialization: specialization by number of countries within a
region. Example, golf states or South Africa.
2. National specialization: when a country has a comparative advantage in a
particular industry. For example, USA (weapons), Japan (electronics, cars).
3. Within a country: specialization either at a provincial (state) level or a city
level. Example, Sialkot (sporting good), Karachi (seafood), Wisconsin (dairy).
4. Firms: within an industry. One firm may specialize in one type of product.
Example, budget cars (Suzuki Pakistan).
5. Within a workplace/office: this is specialization achieved through division
of labor when one individual masters one task in a firm.
6. Occupation specialization: specialization through the development of
particular skills through training or education. Example, students in school.
Advantages of specialization to the manufacturer:
1. Taking advantage of division of labor.
2. It enables them to concentrate on one product.
3. It increases output using less inputs and time, hence more efficiency.
4. Greater use of machinery.
5. It reduces the need of more labor, hence lowering labor costs.
6. Easier to train workers, hence lowering training costs.
7. Less time is wasted by workers moving from one task to another.
8. Smaller tasks can often be done by unskilled workers for cheap.
9. This develops the skill of labor and allows the manufacturer to take advantage.
Disadvantages of specialization to the manufacturer:
1. Workers may feel bored and isolated, leading to mistakes.
2. Everyone relies on a particular individual for some given task. If a worker is
absent, the entire production process comes to a halt. If one task or process
is slowed, the entire production is also slowed.
Advantages of specialization to the worker:
1. Through specialization workers work faster and develop their skills. This
can lead to higher pay.
2. There can be a reduction in physical effort as more machinery is used.
3. Improves labor mobility.
4. Jobs take less time to learn, hence less time is needed for training.
Disadvantages of specialization to the worker:
1. Workers may feel bored and isolated which can lead to low motivation, low
output, low quality products and can arm workers morale.
2. Workers may become unemployed if their skill is no longer required,
making it harder to change jobs.
3. Workers may feel less important and valued since they only manage one
task, instead of the whole product.
standardized production means reduced costs, hence lower prices.
More goods are affordable, hence higher standard of living.
Advantages to the Consumer:
1. Standardized production means reduced costs, hence lower prices.
2. More goods are affordable, hence higher standard of living.
Disadvantages to the Consumer:
1. Output becomes standardized. No uniqueness.
2. Less variety and choice.
Limits to Specialization:
1. The type of target market.
2. Good infrastructure (for faster transport)
Q. Explain the link between specialization and comparative advantage? (4)
If a country specializes in one particular industry and becomes known for that
industry, it is using comparative advantage. It should be able to produce the
particular goods more cheaply and more efficiently that its competitors and so
will earn foreign currency to pay for what it cannot produce.
