Reasons for National Specialisation (Cambridge (CIE) O Level Economics)
Revision Note
Written by: Steve Vorster
Reviewed by: Jenna Quinn
Reasons for National Specialisation
Specialisation occurs on several different levels
On an individual level where a worker specialises in a particular task
On a business level, e.g. one firm may only specialise in manufacturing drill bits for concrete work
On a regional level e.g. Silicon Valley has specialised in the tech industry
On a national level as countries seek to trade e.g. Bangladesh specialises in textiles and exports them to the world
The two main factors which allow a country to specialise are:
Superior resource availability: If the quality of the resource is relatively better than other nations, the country will be able to charge higher prices for it. Alternatively, if a country has a higher quantity of the resource then it may be able to lower prices and drive competitors out of business by specialising in its extraction and sale
Cheaper production methods: If the country has lower costs of production, then it is very likely that they will be able to lower selling prices and gain a lead in the international market share. Some countries are able to produce cheaply using machinery or technological innovation, whilst others do so by providing large labour force which can perform manual tasks very cheaply
Advantages and Disadvantages of National Specialisation
Pros and Cons of National Specialisation
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