Lecture - 02

# Industrial revolution
The Industrial Revolution marked a period of development in the latter half of the
18th century (1760-1840) that transformed largely rural, agrarian societies in
Europe and America into industrialized, urban ones.
Goods that had once been painstakingly crafted by hand started to be produced in
mass quantities by machines in factories, thanks to the introduction of new
machines and techniques in textiles, iron making and other industries. This
revolution included technology, energy, transport, consumer, demographic,
agricultural, commercial, financial revolution. The Industrial Revolution changed
how people worked, the technologies available to them, and often where they lived.
Production efficiency improved during the Industrial Revolution with inventions
such as the steam engine. The steam engine dramatically reduced the time it took to
manufacture products. More efficient production subsequently reduced prices for
products, primarily due to lower labor costs, opening the marketing doors to a new
level of customers.
Fuelled by the game-changing use of steam power, the Industrial Revolution began
in Britain and spread to the rest of the world, including the United States, by the
1830s and ‘40s. Modern historians often refer to this period as the First Industrial
Revolution, to set it apart from a second period of industrialization that took place
from the late 19th to early 20th centuries and saw rapid advances in the steel,
electric and automobile industries.

# How Steam Engine changed the World

The industrial and transportation revolutions are driven mainly by the development
of steam engines, these engines lay at the heart of many of the new machines and
equipment
Virtually every industry was affected and altered by the steam engine :
● The textile industry was among the first beneficiaries of steam power, as
engines were applied to driving great looms, tended by dozens of workers,
producing vast quantities of fabric.
 ● The steam locomotive changed the way things were made and delivered to
people all over the world. Rail lines crossed nations and soon, continents The
engine allowed for changes in manufacturing and transportation of people
and goods as well as jobs available to people in order to run the new
machinery. This changed the way of life for most people as the economy
diversified from being centered on agriculture.
● Steamships traveled the oceans far faster than sailing ships could. Some
models of early automobiles were steam-powered.
● Steam heat, used for centralized heating, became more common.

# Invention vs Innovation
Invention creates something new, innovation creates something that sells
What is Invention?
The term ‘invention’, is defined as the act of creating, designing or discovering a
device, method, process, that has not existed before. In finer terms, it is a novel
scientific idea conceived through research and experimentation that turns into a
tangible object. It can be a new process of producing a product or may be an
improvement upon a product or a new product. It is described as the creation of a
concept for doing something without first confirming that it works or is
commercially useful. Invention is impossible without creativity, but creativity alone
is insufficient to successfully create an idea.
What is Innovation?
While invention requires the creation of new ideas, processes or products,
innovation moves one step further and requires implementation of the inventive
act.Innovation connects the dots between inventions. Spotting potential for
improvement, it cleverly fills a gap in the market and combines inventions into
products that will attract customers and generate commercial success . Innovation
is not only about material/product. Innovation can be finance, labor etc. not only
product
Examples of Invention:
● Airplane by Wright Brothers
● Steam Turbine by Charles Parsons
● Light Bulb by Thomas Edison
● Electricity by Benjamin Franklin
 ● Alternating current machinery by Nikola Tesla
Examples of Innovation:
● Almond milk and oat milk
● Small electric cars
● Phones and other gadgets made by Apple Inc.
● LED screens by LG

# Revolution and evolution

The two nouns evolution and revolution both refer to a change. However, there is a
distinctive difference between the change implied by these two words.
Evolution refers to a slow and gradual change over a period whereas revolution
refers to ‘a turnaround’: a sudden, dramatic and complete change.
Examples :
● He studied the evolution of the English language in class.
● It is an important phase in the evolution of mobile phones
● The invention of the printing press caused a revolution in literature.
● This new discovery could cause a revolution in quantum physics.

# Urbanization
As the importance of the factory increased during the industrial revolution, cities
themselves increased in size as the population was drawn to work in the factories.
Urbanization, the process by which large numbers of people become permanently
concentrated in relatively small areas, forming cities.
One of the popular reasons for urbanization is a chance for gainful employment.
Generally, people want to go where they believe there are more opportunities for
good-paying work to help support themselves . Other reasons for urbanization are
Healthcare and Education .
# Proto Industrialization
Proto-industrialisation (PI) is considered to be a phase in the development of
modern industrial economies which preceded and paved the way for
industrialisation proper.
Proto-industrialisation is the phase of industrialisation that was not based on the
factory system. The proto-industrial phase was dominated by the spread of rural
domestic manufacturing which linked more and more families to the pulse of
national and international markets.
Production was organized in cottage workshops, and the primary unit of production
was the household.For Example - Merchants distributed raw materials like wool or
flax (for making linen) to peasants. Men and women would spin the raw material
into yarn, and merchants would then put the yarn out to weavers working looms in
their cottages to produce cloth. Merchants would then distribute the cloth to other
cottage workers for bleaching and dyeing and collect it a final time for sale to a
wholesaler in a near or distant city. The peasant workers were paid piece rates.
Like what Aarong does now. They purchase handcrafted products from rural people
and give them a percentage of the sale. Aarong does not produce its products in a
factory.

# Optimization
Optimization is of critical importance in engineering. Engineers constantly strive for
the best possible solutions, the most economical use of limited resources, and the
greatest efficiency . It is very important for engineering. Optimization means that
there will be no extra finance, extra labor, extra materials, extra time etc, Nothing
extra.

# Production
Production is the method of turning raw materials or inputs into finished goods or
products in a manufacturing process. In other words, it means the creation of
something from basic inputs.
Production = goods & services.

Factors of production:
● Material (raw materials , inputs)
● Capital (finance + capital machinery)
● Labor (human only)
● Entrepreneurship

# Antitrust law:
Antitrust laws are statutes developed by governments to protect consumers from
predatory business practices and ensure fair competition. These laws are applied to
a wide range of questionable business activities, including market allocation, bid
rigging, price fixing, and monopolies.

# Tax Holiday:
A tax holiday is a governmental incentive that temporarily (for months or years too)
reduces or eliminates taxes for consumers or businesses. The objective of a tax
holiday is to encourage economic activity and foster growth.
Tax holidays may also be offered to businesses as an investment incentive.
When a government wants to encourage consumer spending or business investment
it may offer a tax holiday—a temporary period during which certain taxes are
reduced or lifted altogether.

# Disruptive innovation:
Disruptive innovation refers to the process of creating / inventing an expensive or
highly sophisticated product, offering, or service into one that is simpler, more
affordable, and accessible to a broader population.
Amazon provides a clear example of disruptive innovation. Jeff Bezos, in 1995,
subscribing to the notion that the internet could significantly boost commerce,
launched Amazon to sell books to a growing, but largely ignored online shopping
community. In doing so, he forced many bookstores to go out of business.
Netflix is another prime example. After they disrupted the media industry, the
dominant player, Blockbuster, went from having 9,000+ brick-and-mortar stores to
1, which is now an Airbnb.
Normally start up companies create disruptive innovation .