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LLaabboouurr 
IInntteennssiivvee 
vvss CCaappiittaall 
IInntteennssiivvee 
PPrroodduuccttiioonn
LLaabboouurr IInntteennssiivvee 
 SSoommee bbuussiinneesssseess wwiillll rreellyy hheeaavviillyy oonn 
tthhee llaabboouurr ffoorrccee ttoo pprroodduuccee pprroodduuccttss 
rraatthheerr tthhaann ddeeppeennddiinngg oonn mmaacchhiinneerryy..
AAddvvaannttaaggeess 
– LLaabboouurr iiss cchheeaappeerr ttoo hhiirree tthhaann tthhee iinniittiiaall 
ppuurrcchhaassee ooff mmaacchhiinneerryy.. 
– TThhee pprroodduucctt mmaayy rreeqquuiirree ccrraaffttssmmaannsshhiipp oorr 
ssppeecciiaall eexxppeerrttiissee.. 
– TThhee bbuussiinneessss iiss ssmmaallll aanndd ccaann nnoott ffiinnaannccee 
eexxppeennssiivvee mmaacchhiinneerryy..
DDiissaaddvvaannttaaggeess 
– AA sskkiilllleedd ffoorrccee ccaann bbee eexxppeennssiivvee ttoo ppaayy 
aanndd ttrraaiinn.. 
– IItt mmaayy lliimmiitt tthhee ccoommppaannyy ttoo ssmmaallll ssccaallee 
pprroodduuccttiioonn.. 
– IIff aa mmeemmbbeerr ooff ssttaaffff iiss iillll iitt ccaann ccaauussee aa 
hhaalltt iinn tthhee pprroodduuccttiioonn pprroocceessss..
CCaappiittaall IInntteennssiivvee 
 OOtthheerr bbuussiinneesssseess wwiillll rreellyy hheeaavviillyy oonn 
mmaacchhiinneerryy aanndd aauuttoommaattiioonn ttoo pprroodduuccee 
pprroodduuccttss rraatthheerr tthhaann ddeeppeennddiinngg 
hheeaavviillyy oonn tthhee llaabboouurr ffoorrccee..
AAddvvaannttaaggeess 
– IItt mmeeaannss aa ssttaannddaarrdd pprroodduucctt wwiillll bbee bbeeiinngg 
pprroodduucceedd wwiitthh ssttaannddaarrdd ooppeerraattiioonnss.. 
– AAlllloowwss ccoommppaanniieess ttoo ttaakkee aaddvvaannttaaggee ooff 
eeccoonnoommiieess ooff ssccaallee.. 
– AAlllloowwss ccoommppaanniieess ttoo hhaavvee ccoonnttiinnuuoouuss 
pprroodduuccttiioonn..
DDiissaaddvvaannttaaggeess 
– SSeett uupp ccoossttss ooff mmaacchhiinneerryy ccaann bbee hhiigghhllyy 
eexxppeennssiivvee.. 
– IInnddiivviidduuaall ccuussttoommeerr rreeqquuiirreemmeennttss ccaannnnoott 
bbee mmeett.. 
– WWoorrkkeerrss ccaann bbeeccoommee ddee--mmoottiivvaatteedd dduuee ttoo 
tthhee nnaattuurree ooff rreeppeettiittiivvee wwoorrkk..

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37. Labour Intensive v Capital Intensive Production

  • 1. LLaabboouurr IInntteennssiivvee vvss CCaappiittaall IInntteennssiivvee PPrroodduuccttiioonn
  • 2. LLaabboouurr IInntteennssiivvee  SSoommee bbuussiinneesssseess wwiillll rreellyy hheeaavviillyy oonn tthhee llaabboouurr ffoorrccee ttoo pprroodduuccee pprroodduuccttss rraatthheerr tthhaann ddeeppeennddiinngg oonn mmaacchhiinneerryy..
  • 3. AAddvvaannttaaggeess – LLaabboouurr iiss cchheeaappeerr ttoo hhiirree tthhaann tthhee iinniittiiaall ppuurrcchhaassee ooff mmaacchhiinneerryy.. – TThhee pprroodduucctt mmaayy rreeqquuiirree ccrraaffttssmmaannsshhiipp oorr ssppeecciiaall eexxppeerrttiissee.. – TThhee bbuussiinneessss iiss ssmmaallll aanndd ccaann nnoott ffiinnaannccee eexxppeennssiivvee mmaacchhiinneerryy..
  • 4. DDiissaaddvvaannttaaggeess – AA sskkiilllleedd ffoorrccee ccaann bbee eexxppeennssiivvee ttoo ppaayy aanndd ttrraaiinn.. – IItt mmaayy lliimmiitt tthhee ccoommppaannyy ttoo ssmmaallll ssccaallee pprroodduuccttiioonn.. – IIff aa mmeemmbbeerr ooff ssttaaffff iiss iillll iitt ccaann ccaauussee aa hhaalltt iinn tthhee pprroodduuccttiioonn pprroocceessss..
  • 5. CCaappiittaall IInntteennssiivvee  OOtthheerr bbuussiinneesssseess wwiillll rreellyy hheeaavviillyy oonn mmaacchhiinneerryy aanndd aauuttoommaattiioonn ttoo pprroodduuccee pprroodduuccttss rraatthheerr tthhaann ddeeppeennddiinngg hheeaavviillyy oonn tthhee llaabboouurr ffoorrccee..
  • 6. AAddvvaannttaaggeess – IItt mmeeaannss aa ssttaannddaarrdd pprroodduucctt wwiillll bbee bbeeiinngg pprroodduucceedd wwiitthh ssttaannddaarrdd ooppeerraattiioonnss.. – AAlllloowwss ccoommppaanniieess ttoo ttaakkee aaddvvaannttaaggee ooff eeccoonnoommiieess ooff ssccaallee.. – AAlllloowwss ccoommppaanniieess ttoo hhaavvee ccoonnttiinnuuoouuss pprroodduuccttiioonn..
  • 7. DDiissaaddvvaannttaaggeess – SSeett uupp ccoossttss ooff mmaacchhiinneerryy ccaann bbee hhiigghhllyy eexxppeennssiivvee.. – IInnddiivviidduuaall ccuussttoommeerr rreeqquuiirreemmeennttss ccaannnnoott bbee mmeett.. – WWoorrkkeerrss ccaann bbeeccoommee ddee--mmoottiivvaatteedd dduuee ttoo tthhee nnaattuurree ooff rreeppeettiittiivvee wwoorrkk..