Capital and Labour Intensive

• Labour intensive

  Production methods that make more use of labour relative to machinery
• Labour intensive production


  • Flexible
  • Minimum wage is low
  • Lower start up costs
  • People can problem solve but machinery cant
• Labour intensive production


  • Time consuming
  • Costly for wages
  • Unreliable – staff may be sick, unmotivated
  • Staff need breaks
  • High recruitment costs
• Capital intensive


  Production methods that make more use of machinery relative to labour
• Capital intensive production


  • Can work for longer – 24/7 = no breaks, no shortcuts = no defects = no wasted funds
  • Less people needed = easy to manage
  • Cost per unit is lower
  • Sell equipment to improve liquidity
  • Consistent
• Capital intensive production


  • Expensive to repair
  • No equipment = no production
  • Takes up scape
  • Inflexible