Specialisation occurs when an individual focuses on a particular task. A  firm or nation specialises by devoting its resources to the production of a product or relatively few products. Specialisation is made possible by the division of labour.

Merits of specialisation

Increases output of goods
Each worker concentrates on a particular activity in production. Thus, many specialists or experts work together to produce a product. Output increases because they are faster and make fewer mistakes.

Concentration by a specialist  improves skills 
The continuous repetition of a task improves the skills and productivity of the worker. The consequence of having more skillful people at work is that the quality of products made is high. 

Expansion of market
Specialisation encourages exchange. Countries can trade with other countries to obtain the products they do not produce by themselves. They can also benefit from economies of scale as goods are produced on a large scale.

Lower cost per unit
Larger output results from the use of faster and more skilled workers who specialise in what they are good at. The cost of production will be spread over a larger output, thereby lowering the unit cost of production. Consumers may benefit in form of lower prices.

Less training is required
Workers do not have to be trained to acquire a range of skills since each worker is required to obtain skills in his area of specialisation alone. Therefore, the training cost for the firm is reduced. In addition, the time spent on different training programmes can be channelled towards production.

No wastage of time
Each worker does not need to move from one task to another. And there is no need to keep changing tools for the purpose of performing different productive activities. Therefore, time and energy are saved.

Job opportunities are created
A different person is needed for each part of the production process. So, it becomes imperative to hire people to handle the different stages involved in production. Therefore, specialisation creates employment opportunities.


Demerits of specialisation
Workers are demoralised
Workers’ morale becomes dampened because there is no variety in their work.  They perform repetitive tasks which lead to less output per worker.

Occupational immobility
Workers find it difficult to change to other jobs if the need arises because they are only suited for only specific tasks. They have not acquired a variety of skills to perform multiple tasks or work in many industries.

Increased interdependence
Workers depend on one another to complete the production process. Firms also rely on one another since each of them focuses on a specific operation or aspect of production. This causes production stoppage if a worker is absent or a firm is having a problem.

It is expensive to use specialised machinery
Specialised machines are used at each production stage. This may be expensive for the firm. The high cost of machinery may hurt the profitability of the firm.

Decline of craftsmanship
The use of machines by workers at each stage they have specialised in prevents them from using their skills in the production process. For example, hand-made products are few and expensive.