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Specialisation and the division of labour

Specialisation and the division of labour 

Specialisation is concentration on a product/task in order to produce it/carry it out more efficiently. It is a system of organisation where economic units such as households or nations are not self-sufficient but concentrate on producing certain goods and services and trading the surplus with others. This is in contrast to autarky/self-sufficiency. 

The division of labour is a process that allows specialisation to occur - the production procedure is broken down into a sequence of stages or tasks and workers are assigned to a particular stage. This allows for greater efficiency as each individual becomes more skilled at their particular task, more so than they ever would have been had they been doing multiple tasks. Efficiency = greater output for a given input. 

Advantages to DoL: 
As workers' skills and focus improve, they are able to produce more in a given time so productivity increases. 
Transition times are minimised as each individual is not changing from job to job. Tasks that used to have to be done in sequence can now be done simultaneously (e.g Formula 1 pitstop) 
Training time and cost decreases because workers only need to be taught a small task rather than a whole process. 

Disadvantages to DoL: 
> Worker morale and retention may decrease from doing such a repetitive job (e.g Ford had to increase wages as assembly line jobs were so boring) 
> Less satisfying work leads to boredom/alienation - may impact mental health. 
> Skills often aren't transferrable - workers lack flexibility, so may find it hard to find another job with such a limited skillset. 
> Absences/strikes can be disastrous as workers lack knowledge about tasks outside their own. Similarly there is a potential for bottleneck - one person failing at their task can ruin the whole product. 

For countries: 
> Lack of flexibility again which leads to difficulties dealing with external shocks (e.g war, product going out of fashion, etc) 
> This can lead to regions becoming deserted as factories close. 

Specialisation and trade 

Absolute advantage - a country is able to produce a good more cheaply in absolute terms than another country, so with the same factor inputs (e.g UK can produce 20 T-shirts, US can produce 30). 

Comparative advantage - a country is able to produce a good more cheaply relative to other goods produced domestically than another country (i.e the opportunity cost associated with producing the good is lower). Here it still makes sense to trade with a country that doesn't produce as much output as you because it minimises your opportunity cost. 

When two PPFs are parallel there is no comparative advantage. 
  
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