PRODUCTION

What is production?

Production is the making of goods and provision of services to satisfy people’s needs and
wants.

OR

It is the process of transforming natural resources into useable goods and services to satisfy
human needs and wants.

GOODS are physical products that can be seen or touched e.g. bread, chair, books, car etc.

SERVICES are intangible activities that meet people’s needs and [Link] trading, teaching,
nursing transportation, banking, advertising etc.

NEEDS are things that are essential for human beings to survive e.g. food, clothing, shelter and
water.

WANTS are things that make human life easier and comfortable that is, people can live without
them.

MATERIAL WANTS

 Jewellery
 Cell phone
 Television
 Car
 Furniture

NON MATERIAL WANTS

 Entertainment
 Education
 Electricity
 Security
 Love

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RELATIONSHIP BETWEEN PRODUCTION AND DEVELOPMENT

There is a very strong positive relationship between production and development:

 Development emphasizes the satisfaction of people’s needs and wants and the
production process ensures that goods and services are made to satisfy people’s needs
and wants.
 Development requires money for it to take place and these money is generated by
production activities such as mining industry, agriculture etc.
 Production creates wealth to fuel development
 The higher the level of production, the higher the level of development.

WEALTH is the riches that a country possesses which may be in the form of money or property.
The wealth of the country is measured by GDP and GNP.

SCARCITY, CHOICE AND OPPORTUNITY COSTS

SCARCITY is the inadequacy of resources.

Resources have to be used in order for development to occur.

Resource can be in the form of:

 Human resources- knowledge, expertise and skills provided by the people

 Economic resources-capital in the form of machines and money
 Natural resources- e.g. Soil, water, vegetation

CHOICE means making priorities.

Given the scarcity/insufficiency of resources, people are unable to have all the things they
desire. People are therefore forced to choose what to spend the available resources on, for
example whether to spend it on needs or wants.

Countries also have to make similar choices on how best to use limited resources, for example
whether to spend more money on industrial development or social development.

OPPORTUNITY COST is what people give up in order to obtain something e.g. a country can
choose to spend more money on buying weapons and neglect other sectors.

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PRODUCTION IN THE HUNTING AND GATHERING SOCIETIES

Labour

 Division of labour was gender based

Land

 Communally owned
 All the resources belong to the group

Capital

 They used simple technology

Entrepreneurship

 Hunter-gatherers use traditional knowledge and skills

 Decisions are done communally

CHANGES IN THE LIFE STYLE OF HUNTING AND GATHERING SOCIETIES IN BOTSWANA

The Basarwa were now abandoning the nomadic, hunting and gathering as a way of life for a
more settled life because of the following factors:

 Provision of water by the government

 Overgrazing that has depleted edible plants
 Construction of cordon fences which disrupted routes of wild animals
 Increased population that has reduced the land available for nomadic life
 Poaching laws that prevent Basarwa from hunting
 Increasing level of education amongst Basarwa

FACTORS OF PRODUCTION

LAND refers to the whole earth surface and the natural resources on it e.g. soil, minerals,
vegetation and wildlife.

 CHARACTERISTICS OF LAND
 It is fixed or limited in supply
 It is found everywhere
 It has value i.e. It can be bought or sold
 It varies in qualities from place to place e.g. climate, fertility, vegetation, minerals

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LAND OWNERSHIP

TYPES OF LAND OWNERSHIP

PUBLIC/STATE OWNERSHIP/COMMUNIAL OWNERSHIP

 The land belong to the government

 The land cannot be bought or sold
 It is allocated to people by land board
 Everyone has the right to own the land
 The land is given for free

PRIVATE OWNERSHIP OF LAND/FREE HOLD

 This is when the land is owned and controlled by individuals or companies.

 The land has tittle deeds or certificate of ownership
 The land can be bought or sold

ADVANTAGES OF PRIVATE LAND OWNERSHIP

 Land can be used as security for loans

 It can be sold to raise capital
 Land is carefully looked after by the owner
 Anybody can buy land as long as he/she has money

DISADVANTAGES OF PRIVATE LAND OWNERSHIP

 Only the rich can own land

 Landlessness and poverty among the poor
 May lead to land speculation ie people buying large tracts of land in order to sell it for
profit in future.

LEASEHOLD

Leasehold is when the land owners rent out their land to tenants. Tenants use the land for
commercial production

ADVANTAGES OF LEASEHOLD

 Land is used productively because the tenant has to pay rent

DISADVANTAGES OF LEASEHOLD

 Rent has to be paid whether there has been production or loss

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  The tenant can misuse the land
 The land can only be used for the purpose it has been assigned for

COLLECTIVE OWNERSHIP

Collective ownership is when people in the local community own and use the land together.

They combine their capital and labour and share the profit equally

SHARE CROPPING

Share cropping is when people without land are allowed by those who own the land to
cultivate a piece of land and pay with part of the harvest.

LANDLESSNESS

Landlessness is when people own no land

Landless people cannot produce or rent for themselves leading to poverty

CAUSES OF LANDLESSNESS

 People being too poor to buy their own land

 Limited land for existing population/rapid population growth
 Unfair distribution of land

LABOUR

LABOUR refers to the work done by people to make goods and provide services

OR

It is the human effort that is directed at the production of goods and provision of services.

SPECIALISATION OF LABOUR

What is specialization?

Specialization is when people concentrate in one job that they are trained for eg teaching,
nursing, engineering etc.

DIVISION OF LABOUR

What is division of labour?

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Division of labour is the breaking of the production process in to small parts so that each
worker concentrates on a single task.

ADVANTAGESOF SPECIALISATION/DIVISION OF LABOUR

 Workers become experts at their particular jobs

 Production becomes faster
 It saves time
 Quality goods are produced
 Workers are easily trained for a single task
 Create employment opportunities
 It leads to mass production

DISADVANTAGES OF SPECIALISATION/DIVISION OF LABOUR

 The job may become boring

 If a worker is trained to do one job, it is difficult to change to do another job
 Increased dependency easily leads to disruption of production
 Loss of craftsmanship because of the increased use of machinery

FORMS OF SPECIALISATION

There are four forms of specialization:

Specialization by individual: is when each worker concentrates on a specific task

Specialization by product: is when a company concentrates on the production of one

commodity/service

Specialization by country: is when a country concentrates on the production of a specific

product/service

Specialization by region: is when countries in the same area concentrate on the production of a
specific product/service

TYPES OF LABOUR

1. SPECIALISED LABOUR
 These are people who are experts or highly skilled at their work.
 They have high education levels.
 They have spent ling time training

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  They are paid high wages/salaries
 They are also known as professionals e.g. doctors, teachers, lawyers etc.

2. SKILLED LABOUR
 These are people who are highly trained in practical work e.g. Electricians, surveyors,
atomachanics.
 They know how to design and make things

3. SEMI SKILLED LABOUR

 These are people who are trained on the job for specific tasks mostly found in industry.
 They usually obtain no paper qualifications but gain enough experience to perform the
job proficiently.

4. UNSKILLED LABOUR
 These are workers who have no training at all.
 Mostly used as manual labourers e.g. Farm workers, cleaners etc
 They are paid low wages that is, the minimum wage.

CONDITIONS THAT PROMOTE THE EFFIENCY OF LABOUR

What is labour efficiency?

Labour efficiency is the ability of workers to be highly productive.

The conditions that promote the efficiency of labour are:

 Training of workers to acquire the needed skills

 Using advanced technology
 Good working conditions
 Workers must have a peace of mind for them to be productive, this can be aided by
giving workers medical aid, housing, funeral assistance, pension schemes etc
 Motivation of workers

HOW CONDITIONS IN BOTSWANA FACILITATE THE EFFICIENCY OF LABOUR

 Provision of free education and training for all to improve knowledge and skills
 There are labour laws that protect the workers from exploitation
 There are pension schemes
 The acquisition of complex technology that help to increase productivity
 Improved infrastructure

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  Availability of the welfare services such as pension, housing, medical aid etc
 Improved health care
 Conducive working conditions
 Availability of market

CONDITIONS THAT MILITATE AGAINGST THE EFFICIENCY OF LABOUR IN BOTSWANA

 Lack of skills; most of the people are unskilled

 Poor infrastructure
 Poor telephone coverage
 Poor working conditions
 Poor technology
 Poor work ethics
 Lack of incentives
 Low salaries

CAPITAL

What is capital?

Capital refers to money and machinery used in business.

Capital is divided in to two:

 Money capital
 Machineries/capital goods

WAYS OF RAISING CAPITAL

 Through savings
 Buying or selling shares
 Borrowing loans
 Selling assets
 Assistance from friends/relatives
 Renting assets e.g. buildings

TECHNOLOGY

What is technology?

Technology is the combination of skills, tools and machineries that a society employees to
make goods and provide services

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TYPES OF TECHNOLOGY

1. SIMPLE TECHNOLOGY

This is the use of hand tools to make goods and provide services e.g. hoes for weeding, knives
for cutting etc

ADVANTAGES OF SIMPLE TECHNOLOGY

 It is cheap to buy and to maintain

 It is easy to use
 It creates a lot of employment
 It improves craftsmanship
 It is friendly to the environment
 Low labour costs because it uses unskilled labour

DISADVANTAGES OF SIMPLE TECHNOLOGY

 It is very slow
 Produce poor quality goods
 It is strenuous to use
 It leads to low production

2. INTERMIDIATE TECHNOLOGY

This is the use of simple machines to produce goods and provide services eg. Hand sewing
machines, animal drawn ploughs, donkey carts etc.

ADVANTAGES OF INTERMIDIATE TECHNOLOGY

 It is faster compared to simple technology

 It is cheap to buy and to maintain
 It creates employment opportunities
 It is friendly to the environment
 It improves craftsmanship
 Low labour costs since it needs unskilled labour

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DISADVANTAGES OF INTERMEDIATE TECHNOLOGY

 It is strenuous to use
 It produces poor quality goods
 It is very slow
 Ii leads to low production

3. COMPLEX TECHNOLOGY/ADVANCED TECHNOLOGY

This is the use of sophisticated machines to produce goods and provide services.

ADVANTAGES OF COMPLEX TECHNOLOGY

 High quality goods are produced

 It is very fast
 It leads to mass production of goods making them to be cheap
 It leads to the acquisition of skills
 It leads to the development of infrastructure

DISADVANTAGES OF COMPLEX TECHNOLOGY

 It is expensive to buy and to maintain

 It increases dependency on developed countries
 It pollutes the environment
 It leads to high unemployment
 It leads to loss of craftsmanship
 High labour costs since it needs skilled labour

APPROPRIATE TECHNOLOGY

What is appropriate technology?

Appropriate technology refers to tools, skills and machineries that are best suited/relevant for a
particular society.

FACTORS THAT DETERMINE APPRORIATE TECHNOLOGY

 Availability of skills
 Availability of capital
 The level of development
 The level of production
 Availability of opportunities e.g. creation of employment

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  Sustainability of the technology
 Availability of raw materials at the local level
 Flexibility of the technology; relevant technology should be of low risk to the users,
should be able to do a variety of things
 The technology should be friendly to the environment

ADVANTAGES OF APPROPRIATE TECHNOLOGY

 It creates employment opportunities

 It is friendly to the environment
 It is cheap to buy and maintain
 It produces relevant goods and services
 It promotes local development

METHODS OF PRODUCTION

1. LABOUR INTENSIVE PRODUCTION

What is labour intensive production?

Labour intensive production is the making of goods and provision of services which relies
heavily on the use of simple technology.

CHARACTERISTICS OF LABOUR INTENSIVE

 Production is on small scale

 It uses unskilled labour
 It uses simple technology
 It needs more labour

ADVANTAGES OF LABOUR INTENSIVE

 It creates a lot of employment opportunities

 it improves craftsmanship
 The technology used is friendly to the environment
 Low labour costs
 The technology used is cheap to buy and to maintain

DISADVANTAGES OF LABOUR INTENSIVE

 Poor quality goods are produced

 It is a slow method of production

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  The work is strenuous

2. CAPITAL INTENSIVE PRODUCTION

What is capital intensive production?

Capital intensive production is the making of goods and provision of services which relies
heavily on the use of complex technology.

CHARACTERISTICS OF CAPITAL INTENSIVE

 It uses skilled labour

 It uses advanced technology
 It relies heavily on the use of machineries
 Production is on large scale

ADVANTAGES OF CAPITAL INTENSIVE

 Production is done very fast

 High quality goods are produced
 Leads to mass production of goods that makes them cheaper
 Work becomes lighter and enjoyable
 It creates a lot of skilled manpower
 It improves the country’s infrastructure
 Greater opportunity for technological advancement

DISADVANTAGES OF CAPITAL INTENSIVE

 Machines used are expensive to buy and to maintain

 High labour costs since it employs skilled manpower
 High unemployment because most of the work is done by machines
 It pollutes the environment
 It leads to the dependency on the developed countries
 It leads to loss of craftsmanship

ENTREPRENEURSHIP

What is an entrepreneur?

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An entrepreneur is the person who takes the risk of starting a business.

What is an entrepreneurship?

An entrepreneurship is the organization of land, labour, capital in production.

ROLES PLAYED BY AN ENTREPRENEUR

 Organizes land, labour and capital to produce goods and provide services
 Makes decisions on what to produce, how to produce and where to produce
 Manages the day to day running of the business
 Steers the business to be a success

SECTORS OF PRODUCTION/STAGES OF PRODUCTION

There are four stages of production

1. PRIMARY PRODUCTION

What is primary production?

Primary production is the extraction of natural resources from the earth surface

The process does not change the physical appearance of the product e.g.

 Mining-the extraction of minerals from the earth/ground

 Fishing-catching fish in water
 Forestry-the growing and cutting of trees for timber

The products of the primary production are:

 Raw, that is they are in their natural state

 Unusable directly by people since they need some processing
 Have low prices on the commodity market

DISADVANTAGES OF DEPENDING ON THE PRIMARY SECTOR OF PRODUCTION

 Lack of skilled manpower in the country

 Poor technology
 Primary products can easily be replaced
 Country earns less foreign exchange
 High unemployment in the country
 Poor infrastructure

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 2. SECONDARY PRODUCTION

It is the transformation of raw materials into semi finished and finished goods.

There are three levels of secondary production

 PROCESSING:

The transformation of raw materials into more useable goods for example cattle into beef,
hides into leather, maize into mealie meal etc

 MANUFACTURING

It involves the transformation of raw materials into more specific and useable goods. These can
be used directly by the consumer for example leather into shoes, jackets etc, cloth into clothes,
and steel into door frames.

 CONSTRUCTION

The building of houses, dams, roads, bridges etc.

ADVANTAGES OF DEPENDING ON THE SECONDARY SECTOR OF PRODUCTION

 Creation of more employment opportunities

 Country earns more foreign exchange
 Improvement of technology and the acquisition of skills
 Improvement of infrastructure
 Value added products are produced

3. TERTIARY PRODUCTION

It is the provision of services that help in the transfer of finished products from the factory to
the consumer e.g. warehousing, advertising, transportation etc.

4. QUATENARY SERVICES

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This is the last stage of production. It is the most advanced stage of production where
computers are mostly used for example, where there is no direct contact between the producer
and the consumer.

ECONOMIC SYSTEMS

There are three economic systems:

 Capitalism/market economy
 Socialism/planned economy
 Mixed economy

CAPITALISM/MARKET ECONOMY

What is capitalism?

Capitalism is a system whereby the means of production are owned and controlled by
individuals or the private sector.

FEATURES/CHARACTERISTICS OF CAPITALISM/MARKET ECONOMY

 Individuals have the right to own and control means of production i.e. land, labour and
capital
 People are free to use the resources as they see fit
 People are free to start businesses of their own choices
 People are motivated by the need to make profits for themselves
 Businesses compete against each other
 The prices of goods and services are determined by the law of supply and demand
 There is less government interference in the running of the economy

ADVANTAGES OF CAPITALISM/MARKET ECONOMY

 The economy responds quickly to the people’s needs and wants

 There is efficient use of resources
 High quality goods and services are produced because of stiff competition
 The need to make profit encourages entrepreneurs to make their businesses successful
 Anyone has the chance to become rich provided he/she has business skills

DISADVANTAGES OF CAPITALISM/MARKET ECONOMY

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  Businesses overcharge because of lack of government
 Pollution of the environment
 Widens the gap between the rich and the poor
 Workers are exploited by the employer

SOCIALISM/PLANNED ECONOMY

What is socialism?

Socialism is a system whereby the means of production are owned and controlled by the
state/government.

FEATURES/CHARACTERISTICS OF SOCIALISM

 All means of production belongs to the state

 The government is the only entrepreneur that is allowed to operate
 All people are expected to work for the common good of the society
 Competition between entrepreneurs is prohibited
 All prices are set and controlled by the state
 Decision on what and how to produce is made by the government

ADVANTAGES OF SOCIALISM/PLANNED ECONOMY

 It satisfies all the people’s basic needs

 Benefits of production are distributed equally
 Everyone has the right to work
 Goods and services are sold at a low price

DISADVANTAGES OF SOCIALISM/PLANNED ECONOMY

 It is difficult to plan for the whole country and these results in a lot of mistakes
 It suppresses individual freedom to think and act
 State appointed managers are ineffient because they are political appointees rather
than entrepreneurs
 Technologically inefficient because managers are not allowed to come up with new
ideas or make changes
 Very few luxury goods are produced hence people’s lives are uncomfortable
 Limited choices for consumers since all goods and services are produced by the state
 Low productivity levels because of over-employment and low morale of workers

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MIXED ECONOMY

What is mixed economy?

Mixed economy is a system whereby there is both private and state ownership of means of
production.

FEATURES/CHARACTERISTICS OF MIXED ECONOMY

 There is both private and public ownership of means of production

 There is freedom of enterprises
 The government interferes in the running of the economy
 Government provides essential services

ADVANTAGES OF MIXED ECONOMY

 It re-distributes the benefits of production through the taxing of businesses

 Helps the poor through the welfare system
 The government protects workers from exploitation
 The government protects the environment from destruction
 The government provides essential services at a low price

DISADVANTAGES OF MIXED ECONOMY

 The government may discourage investment through tough laws and heavy taxations
 Government ends up in debts because of public expenditure
 The welfare system encourages people to be lazy and irresponsible
 State enterprises are inefficient and a drain to the economy

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