Reasons for National Specialisation | Economics for GCSE/IGCSE - Year 11 PDF Download

Reasons for National Specialisation

• Specialisation occurs on various levels:
  • Individual Level: This is when a worker focuses on a specific task. For instance, a chef specializing in baking pastries.
  • Business Level: Companies may specialize in a particular product or service. For example, a company exclusively manufacturing smartphones.
  • Regional Level: Regions like Silicon Valley are known for specializing in the technology sector, fostering innovation and growth.
  • National Level: Countries engage in specialization to trade efficiently. For instance, Bangladesh focuses on textile production for global export.
• Countries specialize due to two primary factors:
  • Superior Resource Availability: Countries can specialize if they possess resources of higher quality or quantity, enabling them to either charge premium prices or lower prices to outcompete others.
  • Examples:
    • A nation with abundant high-quality oil reserves can command higher prices in the global market.
    • Conversely, a country with a large labor force can offer manual services at lower costs, driving specialization in labor-intensive industries.
  • Cheaper Production Methods: Nations with lower production costs can reduce selling prices, gaining a competitive edge in international markets.
  • Examples:
    • Some countries leverage machinery or technology to lower production costs.
    • Others rely on a large pool of inexpensive labor to perform tasks affordably.

Advantages & Disadvantages of National Specialisation

Pros & Cons of National Specialisation