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Specialisation and the division of labour

Say what specialisation is and why it raises output

Key terms
Specialisation
Specialisation is when a person, firm, region or country concentrates on the tasks or products it is best suited to.
Division of labour
The division of labour is splitting the production of a good or service into separate tasks, each done by different workers.

Adam Smith counted eighteen tasks in making a pin

Adam Smith introduced the division of labour in the first chapter of The Wealth of Nations, published in 1776. In a pin factory he counted 18 distinct tasks: drawing out the wire, cutting it, straightening it, putting a head on one end and a point on the other, packaging, and more. One worker alone might make 20 pins in a day. A small business of 10 workers, some of them doing two or three of the 18 tasks, could make 48,000 pins in a day.