Cambridge International as and a level Economics Ebook

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. Th
e 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. Th
is is called the 
division of 
labour
. For example, Adam Smith, writing at the end of 
the eighteenth century, showed how the production of 
pins would benefi t 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. 
Specialisation: 
the process by which individuals, firms 
and economies concentrate on producing those goods and 
services where they have an advantage over others.
KEY TERM
Division of labour: 
where a manufacturing process is split 
into a sequence of individual tasks.
KEY TERM
19
Chapter 1: Basic economic ideas and resource allocation

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Th
is was compared to his estimate that each employee 
would be able to produce only a few dozen each day if they 
produced pins individually.
Modern manufacturing processes are usually split up 
into a number of tasks. A typical example is in a garment 
factory where each operative produces one part of an item 
of clothing such as a shirt sleeve or button holes. Th
is 
division of labour is usually quicker and cheaper than 
having one person complete each garment on their own. 
It also allows workers to become more specialised and can 
lead to an increase in productivity and an improvement in 
the quality of the fi nished product.
In the United States the division of labour was taken 
a stage further in the 1920s when Henry Ford introduced 
conveyor belt production into the car industry. Ford’s 
method of car production provided the model for much 
of manufacturing production in the twentieth century 
with ‘Just in Time’ processes being widely applied in many 
types of business. With relevant planning, it is possible to 
keep production underway with minimal levels of parts 
or stock.
Although the division of labour raises output, it oft en 
creates dissatisfaction among the workforce as they become 
deskilled and bored with the monotonous nature of their 
work. In modern developed economies the dehumanising 
impact of production techniques, such as using a conveyor 
belt and robots, has been acknowledged and procedures 
introduced to counteract boredom such as multi-skilling 
and moving workers around the production plant.