Division and specialisation of labour. How does it affect the efficiency of production? This article will explain the advantages and disadvantages of specialisation.
Welcome to Simply Economics. This article is the third in a series to explain economics to those who want to broaden their scope of the subject. Click here to find out more about the series.
DIVISION AND SPECIALISATION OF LABOUR
Specialisation is when a person, business or country focuses on the production of a small range of goods. There are many advantages to specialisation. For example:
- It increases productivity.
- Living standards across the globe rise.
However, specialisation comes with disadvantages:
- When demand for a good falls, it leads to structural unemployment. This is when people become unemployed because their skills are no longer of use. This may happen because the industry they worked in has collapsed.
- Countries who specialise in the production of minerals (such as gold and silver etc) may run into trouble when said minerals run out.
DIVISION OF LABOUR
When individuals specialise in the production of a certain good it is called the division of labour. Production of a good is broken down into a set of different tasks and each task is carried out by different workers. For example, when a house is built its production is split up into many smaller jobs like plastering, tiling, joinery and so on.
It was Adam Smith who first came up with the idea of the division of labour by explaining it through a pin factory. He explained that if the production of a pin was broken down into 18 different tasks, and each task was carried out by different workers, the output of pins would increase by 2000% compared to if one worker made one pin.
ADVANTAGES OF THE DIVISION OF LABOUR.
- Workers become highly skilled.
- There is more time efficiency.
- Machinery can be used all the time in production.
- More choice of jobs for workers and they can specialise into a job that suits them well.
DISADVANTAGES OF the division of LABOUR
- Repetition of the same job causes boredom. This would cause a high turnover of staff leading to higher recruitment costs.
- When a firm breaks down the production into different tasks, it makes it easier for machines/robots to replace workers. For example, motor vehicle workers can be replaced by robotic arms that weld the car together.
- It can cause interdependence in production. This means that if one section of production slows downs or stops so does the rest of the production.
To summarise, specialisation occurs when a person or firm decide to focus on the production of a particular good. Division of labour is a form of specialisation where production a good is split into many tasks, each carried out by different workers. This idea was proposed by Adam Smith and drastically increases efficiency.