One of the ways in which more goods and services can be produced is the economy is through the process of specialization. This refers to a situation where individuals and firms, regions and nations concentrate upon producing some goods and services rather than others. This can be clearly illustrated at the individual level. Within the family there may be some specialization in the performance of household tasks, with one person doing the ironing and gardening while another does the shopping and cooking. At the workplace, of course, the fact that some people are labourers or lorry drivers while others have office jobs is also a reflection of specialization. At this level, specialization allows individuals to concentrate upon what they are best at and thus more goods and services will be produced. With such specialization, however, although more is produced no-one is self-sufficent. It becomes necessary to exchange goods and services. As an individual specializes they will produce a surplus beyond their needs, which they can exchange for the surpluses of others.
With the expansion of trade and the development of markets, the benefits of region and national specialization became apparent. Surpluses produces by regions and countries were bought and sold, allowing world living standards to rise. Just as individuals concentrated on what they were best at, so did regions and countries.
Specialization has clearly resulted in a massive expansion in world living standard, but there are dangers in specialization. given the pace of technological change in modern society, there is always the possibility that the specialist skills and accumulated experience, which any individual has acquired, may become redundant as the economy develops. Individuals need to be flexible and multi-skilled and be able to move between occupations. At regional and national levels, changes, in consumers' wants can sometimes mean that the goods and services produced in a region or country are no longer required in the same quantity and unemployment can result. Policies then have to be adopted to deal with the economic and social problems that will arise.
The division of labour
With the technical advances of the last few hundred years, production of goods and services has taken place on a much bigger scale. The concentration of large numbers of workers within very large production units allowed the process of production to be broken down into a series of tasks. This is called the division of labour. For example, Adam Smith, showed how the production of pins would benefit from the application of the division of labour in a factory. He suggested that pin-making could be divided into 18 distinct operations and that, if each employee undertook only one of the operations, production would rise to 5,000 pins per employee per day. This was compared to this estimate that each employee would be able to produce only a few dozen each day if they produced pins individually.
Although the division of labour raised output, it often created dissatisfaction in the work force, who became bored with the monotonous nature of their task. The process was taken a stage further in the 1920s when conveyor belt production was introduced in the United State car industry by Henry Ford. Ford's method of car production provided the model for much of manufacturing production in the twentieth century. In more recent times the de-humanizing impact of production techniques, such as those using a conveyor belt, have been recognized and alternative methods of production have been introduced.
Source: As Level and A Level Economics, Colin Bamford, Keith
Brunskill, Gordon Cain, Sue Grant, Stephen Munday, Stephen Walton,
University of Cambridge, Cambridge University Press, 2002
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