Capital Intensive & Labour Intensive Production
- Labour-intensive production predominantly uses physical labour in the production of goods/services
- The delivery of services is usually more labour-intensive than manufacturing
- In countries where labour costs are low (e.g. Bangladesh) labour-intensive production is common
- Small-scale production is likely to be labour-intensive
- E.g. UK schools are labour-intensive operations as teachers plan and deliver lessons and provide pastoral support
- Capital-intensive production predominately uses machinery and technology in the production of goods/services
- Large-scale production of standardised products is likely to be capital-intensive
- Manufacturing in developed countries where labour costs are relatively high is likely to be capital intensive
- E.g. Automative manufacturers such as Ford use robots and other production technology to manufacture vehicles with supervisors overseeing the quality of output
The Advantages & Disadvantages of Labour Intensive and Capital Intensive Production
Type of Production |
Advantages |
Disadvantages |
|
Capital Intensive |
|
|
|
Labour Intensive |
|
|
Exam Tip
Make sure that you can define both of these key terms clearly. 'Define' questions are worth 2 marks so make sure that your definitions have two elements.
Example
Capital-intensive production predominately uses machinery and technology [1] rather than labour [1] in the manufacture of products
