Specialists and Generalists: Equilibrium Skill Acquisition Decisions in Problem-solving Populations

TL;DR

This paper models the decision-making process behind individuals choosing to become specialists or generalists, revealing how problem complexity and barriers influence optimal skill acquisition and societal welfare.

Contribution

It introduces a theoretical framework analyzing conditions that favor specialization versus generalization, highlighting the impact of problem difficulty and organizational constraints.

Findings

Workers tend to specialize in single-dimensional problems with open disciplinary boundaries.

Barriers to cross-field work promote generalist strategies for simple problems.

Societal optimality favors maintaining some generalists despite individual incentives to specialize.

Abstract

Many organizations rely on the skills of innovative individuals to create value, including academic and government institutions, think tanks, and knowledge-based firms. Roughly speaking, workers in these fields can be divided into two categories: specialists, who have a deep knowledge of a single area, and generalists, who have knowledge in a wide variety of areas. In this paper, I examine an individual's choice to be a specialist or generalist. My model addresses two questions: first, under what conditions does it make sense for an individual to acquire skills in multiple areas, and second, are the decisions made by individuals optimal from an organizational perspective? I find that when problems are single-dimensional, and disciplinary boundaries are open, all workers will specialize. However, when there are barriers to working on problems in other fields, then there is a tradeoff between the depth of the specialist and the wider scope of problems the generalist has available. When problems are simple, having a wide variety of problems makes it is rational to be a generalist. As these problems become more difficult, though, depth wins out over scope, and workers again tend to specialize. However, that decision is not necessarily socially optimal--on a societal level, we would prefer that some workers remain generalists.