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Collective Invention as the engine of Great Britain's economic growth during the First Industrial Revolution

Collective Invention as the engine of Great Britain's economic growth during the First Industrial Revolution

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Published by Carlo Santagiustina

This paper deals with the clusters of innovations and micro improvements that first took place in Great Britain between the 17th and the 19th century, as core prerequisites and determinant factors for the emergence of the First Industrial Revolution.

This paper deals with the clusters of innovations and micro improvements that first took place in Great Britain between the 17th and the 19th century, as core prerequisites and determinant factors for the emergence of the First Industrial Revolution.

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Published by: Carlo Santagiustina on Jan 28, 2013
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 Università Ca' Foscari di VeneziaCourse: Global History, A.Y. 2011/2012, Term 1
Collective invention as the engine of Great Britain’s economic growth during theFirst Industrial Revolution
Santagiustina Carlo R. M. A.carlosantagiustina@msn.com
 ABSTRACT 
This paper deals with the clusters of innovations (CoIs) and micro improvements (MI) that first took place in Great Britain (GB) between the 18
th
and the 19
th
century, as core prerequisites and determinant factors for the emergence of the 1st Industrial Revolution(IR). Economic progress during the IR in Great Britain (GB), is the fruit of such a wide andintricate web of causes, that to stand under the flag of only one of them would certainly be amisleading interpretative path, especially given our purpose of building a logically coherentand cohesive overview of the links between the major economic transformations that took place during the IR in GB. The reading key of this paper is based on the notion of collectiveinvention, as a post-malthusian socio-economical process of network-generated clusters of innovations that strongly characterizes economic growth during the 1st IR. As we will see, inthe British society, collective invention was based on non-institutionalized and thus non- formalized diffusion, contagion and adaptation mechanisms for technical andtechnological innovations, amongst industrial sectors in a weekly-connected industrialsocial community, mostly composed of manual workers, inventors and entrepreneurs thatwere not scientists. We acknowledge that this representation of the IR, based oninnovation/imitation clusters, will probably not be shared by everyone. Moreover, if analyzing the IR from a micro-economic perspective, many of our arguments and reasoning would probably lose much of their relevance, which emerges only when adopting anorganicistic (systemistic) approach, this approach to economic development wishes to be thespecificity of this paper, and will thus also be its limit.
Keywords
:
Technology, progress, clusters, innovation, growth, industrial revolution, welfare,knowledge diffusion, productivity, mechanization, applied science, networks, invention, investment,R&D;
INTRODUCTION 
 At all times in History economic development has drawn its major impetus from non-economichappenings and transformations within society. However, “change, even when socially beneficial, isresisted by social groups that stand to lose economic rents or political power. Consequently, theprocess change involves significant conflict between different groups”
(Acemoglu D. et al., 2005)
.Between the Renaissance and the Enlightenment Europe lived a climate of cultural re-evolution.Through collective questioning and uprising, people progressively replaced most of the ideologicalballast used to protect old privileges and hereditary positions of exploitation, that were previouslypassed off as tradition, culture or religious dogmas. Pre-industrial dominant aristocratic class hadbound the majority of people to poverty and ignorance, and hampered economic growth bydiscouraging or restraining middle and lower classes access to erudition, private venture, propertyownership and free enterprise.
 
During the seventeenth and eighteenth century, all around Europe, emerging middle class became athreat to the maintenance of the political and military power of lords. In GB, thanks to the middleclass’s entrepreneurial awareness there was a fertile ground for novelties. Innovations could rapidlyspread within a wide and proactive community of craftsmen, industrialists and merchants in search of success, who had little to do with our modern and professional scientists (e.g. the first Britishprofessional society of mechanical engineers was formed in only in 1847). As we will see, mechanicinventions enabled a deep social and technological transformation, supporting progress and growth;redefining power and richness equilibriums within society.Emerging power and richness equilibriums relied on new dominant ideologies, first mercantilism andthen capitalism, which through their legal and institutional formalization redefined rights andobligations upon resources. New rights and obligations influenced the structure of relative prices of factors of production. Consequently, through laws and institutions a new series of economic incentivesfor production factors substitution were generated. For example, as we will explain in detail later on,in textile manufacture, the new structure of incentives for factors substitution (labor substituted withcapital and energy) had a particular significance for the gradual mechanization of the Britishindustry. Relative costs for the exploitation of productive resources are thus the key to understand theimplementation of new ways of organizing production, i.e. the technology. Therefore, we will try todetermine why and how new technologies, new products and new ways of preparing individuals forwork, find their “reason d’être” in the newly defined societies values that through their institutionalformalization generate a new structure of prices and incentives, which determines the forthcomingrole occupied by the differently professionalized categories of individuals within society, as well as thecapital and labor intensity in British industries between the eighteenth and nineteenth century.From the fall of the Roman Empire until the first IR, European Countries were scientifically backlogin respect to Asian and Arabian empires (
Rich E. E., Wilson C. H., 1977 
). Thus, the capacity tomilitary and economically compete with those foreign powers resided in the ability of making thegreatest gain from the adoption, unconventional application and micro-improvement of foreignknowledge and technology, acquired through trade-driven or war-driven interactions with moreadvanced extra-European countries, like the Middle-East and North African Caliphates during theIslamic Golden Age (750-1258 CE), and the Chinese Empire during the middle ages and renaissance(i.e. “European used the Chinese inventions of gunpowder, paper and printing, and the magneticcompass in ways undreamed of by the Chinese themselves”;
 Bin Wong R., 2004 
). Yet, between the 18
th
 and the 19
th
century GB recovered and modernized, economically and technologically, bypassingeastern powers. The emerging British society was progressively shifting towards its modern economicand social organization model, the capitalistic one. The latter, as we will make evident, had:
 
Increasingly mechanized productive structures: thus less labor intensive and more capitalintensive;
 
Increasingly standardized productive processes: thus less apprenticeship dependent;
 
Increasingly diffused education and welfare systems: thus less discriminatory and tacitknowledge dependent;
 
Increasingly wide and specialized middle class laborers: capable of generating micro-improvements in productive processes, accrual innovations and inventions, and perform morecomplex procedures at work and more lucid investments and outgoings within the household;However, the IR in GB was not an autopoietic economic phenomenon, as
 Ashton T. S. (1997)
fittinglystates "changes were not merely 'industrial', but also social and intellectual. The word 'revolution'
 
implies a suddenness of change that is not, in fact, characteristic of economic processes. The system of human relationships that is sometimes called capitalism had its origins long before 1760, and attainedits full development long after 1830: there is danger of overlooking the essential fact of continuity”. Wewill therefore investigate about the abovementioned enabling factors of capitalism, the irregular butincreasingly frequent technological progresses and consequent variability of the technologicalenvironment of production.
 
In the first part, we will explain how during the IR, useful knowledge and technical experience wasdeveloped in urban and industrial milieus and then transmitted by means of ideas transmission,between workers and members of the industrial business community. Furthermore, we will explainhow during the 18
th
and 19
th
century the scientific method and new market institutions contributed toBritish creativeness and inventiveness.In the second part, we analyze the role of incentives
for
factor substitution and entrepreneurship in theinnovation and industrialization process; giving particular attention to the role of high wages andcheap coal in the mechanization of the British economy. Furthermore, we explain why
 Acemoglu D. etal. (2005 
) as others, affirm that during the IR “the differential growth of Western Europe is accountedfor largely by the growth of Atlantic trade”, trying to discern why Atlantic Trade and Colonialism arethe cause, and not only the consequence, of the British industrialization process.In the third part, we describe the mechanisms of diffusion, improvement and imitation of innovationsduring the IR. Subsequently, we explain why in connected constellations of small businesses andindustries, CoIs and collective inventions are self-enforcing and self-expanding. Subsequently, weidentify some important CoIs and collective inventions of the British IR, and recognize interrelationsand reciprocities between them.In the fourth and final part we clarify how CoIs, collective inventions and the mechanization of production processes determined the growth of productivity per worker, markets, foreign trade andleast but not last welfare within GB.
 DEVELOPMENT 
 As observed by
Von Tunzelmann G. N. (1997)
, the peculiarity of an industrial revolution is that“technological change permeates all functions undertaken by firms and by the economies that containthem. The very complexity that emerges defies any straightforward application of covering laws orgeneral principles of economic development … In the British case, the contribution of explicit scientificfindings to technology was minimal: what instead the scientific revolution provided was theexperimental method, i.e. a procedure for logical investigation, together with some of the instrumentsthat allowed such analysis. The major scientific advances that carried direct implications fortechnology, like the discoveries of the laws of thermodynamics, were more likely to be the result of technology than the cause”. Accordingly, during the British IR, the link between useful knowledge(science) and technology was bidirectional and the process of innovation was more erratic, looping andcomplex than as described in the classical models of innovation (e.g. Linear Model of Innovation).

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