Specialization

Specialization is when countries focus on producing particular goods or services rather than trying to produce a wide array of products. It is closely linked with the principle of comparative advantage, as it also allows countries to focus their resources on areas they are efficient in.

On paper, specialization is supposed to increase productivity and efficiency, allowing labor to dive and develop specialized skills and knowledge. It also empowers economies of scale, where high output gradually lowers the cost of production.