Economics
Study Notes
Specialisation
- Level:
- AS, A Level
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 26 Jan 2019
Specialisation is when we concentrate on a product or task

Real-world examples of industries that make extensive use of division of labour:
- Vehicle assembly
- Construction industry
- Smartphone assembly
Advantages from specialisation (division) of labour:
- Higher productivity and efficiency – e.g. rising output per person hour
- Lower unit costs leading to higher profits
- Encourages investment in specific capital – economies of scale
Disadvantages from specialisation (division) of labour:
- Risk of worker alienation
- Risk of disruptions to production process
- Risk of structural unemployment due to occupational immobility
Advantages for a country specializing in goods and services to trade
- Allows a country to make full use of their economic resources
- Increases the scale of production – leads to lower costs and prices
- Surplus can be exported, an injection into the circular flow of income
Disadvantages for a country specializing in goods and services to trade
- World prices for a product might fall leading to declining revenues
- Risk of over-specializing and structural unemployment
- Might lead to over-extraction of a country’s natural resources
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