Specialization in Castaway

You think Economics is not entertainment? It might not be, but entertainment has incorporated various elements of economics. You have probably watched “Castaway”, but if you have not, think about “Robinson Crusoe”.

Below is a short video about the Economics of “Cast Away”. It unveils the hidden economic lesson embedded within the movie, the lesson about “Specialization”.

Specialization happens when an individual or a group focuses on the production of only one type of products or services. It brings efficiency, labour effectiveness, and eventually, better quality… which is not the case with Tom Hanks who got stranded on an island, alone, not until he met Wilson, the volley ball (really?). He pretty much had to do everything by himself, poorly. Why? Because all the tasks he engaged in on the island were not his specialties, and thus, it required a great amount of time invested for him to learn each and every of them (poorly), even making fire and catching fish.

Projecting this into real life, while technological advancement is arguably a major force that led to industrial revolution, it is also fair to say that it is the basic understanding of production, of specialization, that has brought us this far. First, it began with specialization on products, and then, processes. This was what gave birth to mass production. Think of producing a car. In large car manufacturing facilities, their workers are not involved in every single step of producing cars. Each group is only specialized in making possible a single step or component, say, producing seats or the steering wheels. Then all the components are put together by several other groups. This is how companies, like Toyota, can make ten of thousands of vehicles per day. We can also say that specialization is what allows the production of more sophisticated products, more efficiently and at lower cost, and thus, increasing its affordability. It also speeds up the rate of innovation with people getting better at what they are doing best.

This has further expanded to specialization at country level and even larger regional level. For example, some countries can produce clothes at cheaper cost, while some others can produce phone more efficiently. Those countries then trade with each other, and thus, augmenting standard of living of their citizens with more affordable and higher quality products. This is, in a sense, a part of the theory of “comparative advantage” developed by the famous British economist, David Ricardo.

The above shows that specialization is awesome! Thanks a lot specialization!