Second, workers who specialize in certain tasks often learn to produce more quickly and with higher quality. This pattern holds true for many workers, including assembly-line laborers who build cars, stylists who cut hair, and doctors who perform heart surgery. In fact, specialized workers often know their jobs well enough to suggest innovative ways to do their work faster and better.
A similar pattern often operates within businesses. In many cases, a business that focuses on one or a few products is more successful than firms that try to make a wide range of products. Third, specialization allows businesses to take advantage of economies of scale , which means that, for many goods, as the level of production increases, the average cost of producing each individual unit declines. For example, if a factory produces only one hundred cars per year, each car will be quite expensive to make on average.
However, if a factory produces fifty thousand cars each year, then it can set up an assembly line with huge machines and workers performing specialized tasks, and the average cost of production per car will drop.
Economies of scale implies that production is becoming more efficient as the scale of production rises. The ultimate result of workers who can focus on their preferences and talents, learn to do their specialized jobs better, and work in larger organizations is that society as a whole can produce and consume far more than if each person tried to produce all of their own goods and services.
The division and specialization of labor has been a force against the problem of scarcity. Specialization only makes sense, though, if workers and other economic agents such as businesses and nations can use their income to purchase the other goods and services they need. In short, specialization requires trade.
You do not have to know anything about electronics or sound systems to play music—you just need a device e. Instead of trying to acquire all the knowledge and skills involved in producing all of the goods and services that you wish to consume, the market allows you to learn a specialized set of skills and then use the pay you receive to buy the goods and services you need or want.
Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Specialization , along with the complementary concept of the division of labor, occurs when the innate inequalities of human productive output are intensified along different skills.
An individual becomes economically specialized when he focuses his productive efforts on an increasingly narrow range of tasks. The most obvious economic impact of specialization can be seen in the tendency for individuals to choose different vocations that are more in line with their interests, skills, opportunities, and education.
Adam Smith , who is often referred to as the father of economics, believed that specialization and the division of labor were the most important causes of economic progress. Total output is increased when one worker specializes in one type of activity and trades with other specialized workers, said Smith. He pointed out that specialization could occur at the individual level, along different firms or even countries.
Economic actors that specialize in a task become more proficient at it. It's the same reason why professional athletes practice before a game or why children write their letters over and over again in preschool; repetition and muscle memory increase productivity. Rather than having every actor practice at producing all different kinds of goods or services, human beings naturally tend to specialize in narrow fields and then trade with one another.
This creates a division of labor. Even if someone were naturally better at producing every kind of good or service than everyone else — what economists call an " absolute advantage " in trade — it still makes sense to specialize in just one area and trade with those who are less productive. To illustrate why this is the case, consider the following example.
An attorney has a secretary in her law office. Suppose she can type faster, file faster, and use a computer faster than her secretary.
When it comes to doing secretarial work, her labor productivity is higher than that of her secretary. However, that isn't her most valuable work; her most valuable work is practicing law. Every hour that she spent doing secretarial work is an hour that she couldn't spend being a lawyer, so she trades with her secretary to maximize her earnings as an attorney. The aggregate impacts of specialization on the economy are massive.
As labor becomes more knowledge based and communications technology advances, the division of labor accelerates. The hyperspecialization of workers may be inevitable given the quality, speed, and cost advantages it offers employers—and the power it gives individuals to devote flexible hours to tasks of their choice.
This will force managers to master a new set of skills: dividing work into assignable micro tasks; attracting specialized workers to perform them; ensuring acceptable quality; and integrating many pieces into whole solutions. Much of the prosperity our world now enjoys comes from the productivity gains of dividing work into ever smaller tasks performed by ever more specialized workers. Today, thanks to the rise of knowledge work and communications technology, this subdivision of labor has advanced to a point where the next difference in degree will constitute a difference in kind.
We are entering an era of hyperspecialization—a very different, and not yet widely understood, world of work. But an aircraft is fundamentally a physical product. Consider how much more finely work can be diced when it produces intangible, knowledge-based goods and the information involved can be transported anywhere in the world nearly instantaneously and at almost no cost.
Even job titles of recent vintage will soon strike us as quaint. And that is the simplest scenario. When TopCoder, a start-up software firm based in Connecticut, gets involved, the same software may be touched by dozens of contributors. For instance, a project might begin with a contest to generate the best new software-product idea. TopCoder hosts a web forum that allows developers to query the client for more details, and all those questions and answers become visible to all competitors.
Further contests are launched to develop each of the pieces separately and then to integrate them into a working whole. Finally, still other programmers compete to find and correct bugs in the sundry parts of the system. Because the company aggregates demand for specific tasks, it enables a developer who is particularly good at, say, designing user interfaces to spend the bulk of his or her time doing just that.
Indeed, TopCoder developers are becoming increasingly specialized. Some focus on programming specific kinds of software such as small graphics modules. Some have discovered a talent for putting together software components that others have written. In the great tradition of the division of labor, this hyperspecialization pays off.
And it manages to do this while maintaining a satisfied, well-paid community of coders. But will its benefits be unalloyed?
To ensure that hyperspecialization is as welcome as it is likely, we must keep our eyes open to its possible dangers. Rather, it means breaking work previously done by one person into more-specialized pieces done by several people. Whether or not those pieces are outsourced or distributed, their separation often leads to improvements in quality, speed, and cost. Just like craft workers of the past, knowledge workers engage in myriad peripheral activities that could be done better or more cheaply by others particularly others who specialize in them.
Project managers, for example, spend untold hours preparing slide decks even though few of them have the software facility and design sensibilities to do that well. Some are able to delegate the task, which at least allows it to be accomplished less expensively.
But imagine a service like TopCoder that could offer instant access to a network of PowerPoint jockeys. Imagine further that some of those remote workers were brilliant chart producers, others were eagle-eyed proofreaders, and still others were content experts for different types of presentations. Some, for instance, might specialize in sales presentations for office supply products, and others in internal project review meetings for the pharmaceutical industry.
Quality improves when more of the work that goes into a final product is done by people who are good at it. The improvement is even greater when, as with TopCoder projects, people who are good at work compete with one another to get it. Full disclosure: Thomas W. For seekers, the appeal of InnoCentive lies mainly in the quality of the solutions it can yield. By casting the net so widely, it often pulls in solvers with very specialized experience who can make headway on problems that have stumped internal experts.
Forinstance, as the business writers Julian Birkinshaw and Stuart Crainer have described, the pharmaceutical company Roche wanted to find a better way of measuring the volume and quality of clinical specimens passing through its automated chemistry analyzers.
In it sponsored a contest on InnoCentive. After two months it had received proposals from solvers around the world. Tod Bedilion, then the director of technology management for Roche Diagnostics, was amazed to find among them a novel solution that had eluded Roche for 15 years. That example speaks to another major benefit of hyperspecialization: speed. More generally, hyperspecialization can reduce clock time by assigning related tasks to different people who then accomplish them in parallel rather than serially.
This can be as simple as many hands making fast work. A company called CastingWords, for example, produces transcriptions of audio files with incredible speed—sometimes in less time than the recording itself took to make. How is this possible?
Its quality-checking also reveals which workers can be trusted to do well on future assignments. In, like, a day. Like making a lady disappear. Consider the search for Jim Gray, a well-known computer scientist who disappeared at sea in his small sailboat in and was never found. Over the next few days near-real-time satellite images were relayed to thousands of Mechanical Turk workers and volunteers for close examination.
Increased speed is one of the reasons that hyperspecialization can reduce costs. And I would have gotten a few hundred sticky notes rather than an entire notebook with separate detailed proposals. For example, in any business-to-business sales process, accurate contact information about prospects must be assembled.
How much better to employ microspecialists—such as the workers recruited by Samasource, a nonprofit based in San Francisco. Samasource sends this kind of data-entry work to individuals in the developing world, who verify business web addresses, phone numbers, e-mail addresses, and DUNS Data Universal Numbering System numbers through a combination of web research and direct phone calls.
Hyperspecialization reduces costs most dramatically when a company can turn to an expert instead of having to reinvent the wheel. For example, consider how much expensive time junior law associates spend researching the same legal precedents again and again in firms across the United States. Contrast that with the value a firm could realize by tapping into a network of experts who each specialize in some tiny aspect of the law.
A firm might suddenly require knowledge of, say, the detailed rules and precedents associated with filing deadlines for U. It could pay a hyperspecialist five times the hourly rate of a junior associate and still come out well ahead on costs. In any given company, hyperspecialization might reshape the organization in many ways, from the macro to the micro level of task assignment. Some of the tasks of a certain role might be hived off, or entire job categories and processes might be upended.
Managers might focus on lower-value-added tasks, as the clients of Samasource do when they hand over data entry. Or they might see greater value in tapping world-class expertise for high-end tasks. For instance, Business Talent Group and YourEncore have networks of freelance experts who provide clients with short-term, high-priced, but ideally higher-value consultation. Regardless of task level, capitalizing on hyperspecialization will call for new managerial skills and focus.
First, managers will need to learn how best to divide knowledge work into discrete, assignable tasks. Second, specialized workers will have to be recruited and the terms of their contribution settled. Third, the quality of the work must be ensured. And finally, the pieces have to be integrated. Understanding how a knowledge-based job could be transformed by hyperspecialization begins with mapping the tasks currently done by people holding that job.
Such a map may immediately suggest tasks and subtasks that could be performed with higher quality, at greater speed, or at lower cost by a specialized resource. In the pharmaceutical giant Pfizer undertook to do just this in an initiative it called pfizerWorks. The company established a process that allowed these tasks to be off-loaded, first to a pair of Indian offshoring firms and then also to an Ohio-based company.
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