Final answer:
The division of labor is the process of breaking down the manufacturing process into distinct tasks and assigning them to specific individuals or groups, leading to increased manufacturing efficiency. In the global economy, this involves splitting up the value chain across international borders to specialize in certain production stages or components, which enhances innovation and economic gains.
Step-by-step explanation:
The process being described is known as the division of labor. This method involves breaking down the manufacturing process into distinct tasks and assigning each task to a specific individual or unit within the production line. Notable historical examples of this concept include the assembly lines that were perfected by Ford in the early 20th century for the production of the Model T automobile. Each worker would perform a highly specialized task, contributing to a level of efficiency that revolutionized manufacturing.
In today's global economy, the division of labor extends beyond single factories and reaches across international borders. This evolution has been facilitated by advances in communication technology, transportation, and global trade agreements. A modern example is the production of the iPhone, which involves design and engineering in the United States, part manufacturing in Korea, assembly in China, and marketing back in the United States. This splitting up of the value chain allows firms to gain economic advantages by specializing in particular stages of production or specific components, leading to improved innovation and productivity. Specialization and division of labor lead to economic gains in trade by enabling a focus on particular sectors of the value chain. It allows international trade to be characterized more by the exchange of specialized components or parts rather than complete finished products. This results in intra-industry trade between countries that can both learn and innovate, leading to a more efficient and robust international economy.