In contrast, if each person concentrates on just a few activities, economies of scale and the development of specialized skills allow production to become much more efficient.
Thus, if each of us focuses our efforts on just a few types of production and then trades our output with others, we can enjoy a far more varied and abundant supply of goods and services than we could if each person remained an isolated economic unit.2 Moreover, specialization tends to encourage innovation and hence promotes dynamism and growth as well as efficiency.