Specialisation, Productivity and Division of Labour

• specialisation: occurs when we concentrate on a particular task
• productivity: measures output per time, per input, per worker
• division of labour: where the production of a good is broken up into many separate tasks each preformed by one person
• division of labour increases productivity
• labour is becoming increasingly specialised as

  • competition increases
  • drive for profit increases
  • innovation increases
• productivity = output / no of employees
• % change = (new value - old value) / old value x 100
• historically the uk has a poor record on productivity, a productivity gap between the uk and other countries now exists
• factors behind the productivity gap:

  • skill shortages
  • productivity
  • red tape
  • lack of competition
  • lack of capital investment
• ways to increase productivity:

  • division of labour
  • automation
  • education
  • targets
  • incentives
  • less red tape
  • competition
• advantages of specialisation:

  • high productivity
  • lower costs
• disadvantages of specialisation:

  • boredom
  • break down in chain
• exchange: a means of swapping products and services