In this class we are going to be looking at Types Of specialisation: Meaning, and exchange in commerce.
Table Of Contents
- Definition of specialisation.
- types of Specialisation.
- Meaning of Exchange.
- Interrelationship among production, specialization and exchange.
Definition of specialisation
Definition: Specialization is defined as the concentration of the productive effort of an individual, a firm or country in a given aspect of economic activity or on a particular line of production in which it has the greatest advantage over others. Specialization is a performance of a single job or economic activity in which an individual, firm or a country has comparative advantage.
Division of labour is one aspect of specialization. Specialization is a result of division of labour.
Types of specialisation
- Specialization by process: This is the types of sterilisation in which a production process is divided into different operations or stages and each worker, or firm or country now concentrate on only one operation or stage. For example a firm___ a printing company may concentrate on the printing stage or aspect of a publishing outfit.
- Specialization by sex: This is the type of Specialisation in which certain occupations are exclusively for either males or females as dictated by custom, tradition or by law. For example, men are mainly involved in driving of trailers while women may be involved in local weaving of traditional clothes called aso oke, in Yoruba land.
- Specialization by products: This is the types of Specialisation in which a producer (individuals, a firm or government) concentrate on the production of a particular commodity. For example, a firm may concentrate on the production of malt drink and an individual farmer can concentrate on the production of poultry eggs.
- Geographical or territorial specialization: This is the types of Specialisation in which certain geographical region or territory specialise in the production of a particular commodity. This Specialization is made possible in this region as a result of the types of climate and natural resources available in the area. For example the presence of petroleum in the Niger Delta region enables the area to specialize in the drilling of petroleum.
Inter-relation relationship among production, specialization and exchange
Exchanges often regarded as an outcome of specialization and production. They are related in the sense that production, which is the creation of goods and services, can be greatly enhance when the processes are broken into stages to be performed by different people. Division of labour and specialization lead to mass production. Since no individual is self-sufficient, i.e, capable of producing all his requirements, then there is need for exchange. To obtain what other people produce, one’s own product must be exchanged. Specialization therefore facilitate production and trade. It increases interdependence among individuals and firms, e.g, a designer of cloth will exchange is product for food.
Revision Questions
- Define specialization.
- List the types of specialisation.
- Discuss the inter-relationship among production, specialisation and exchange.