Industrialization

Historical Insights

The historical perspective deals with experiences in terms of prototypes of industrialization. Main study objects are the first and second industrial revolutions. The first industrial revolution began after 1750 in Great Britain, where it involved the invention of machines, the use of steam power as a nonhuman energy source, and the factory system, which implied machinery production and a division of labor. At the political and legal levels, the first industrial revolution benefited from the abolition of the feudal system, which had tied serfs to the land as vassals. The second industrial revolution began around 1870 and included the broadening of previous areas of industrial mass production, above all the steel industry (for railroads) and subsequently the chemical, electrical, and automotive industries. It also brought about a shift in technological leadership from Great Britain to the United States and Germany. Economic historians continue to study both industrial revolutions.

Preconditions

This perspective defines preconditions that are important to successful industrialization. It goes beyond the basic requirements, such as the availability of large-scale energy, metallurgy, and technological innovation. Thus, it applies a development perspective to industrialization. The place for this debate is mainly in development economics. Walt Rostow's (1916–2003) early “take-off” theory indicated a similar development path for all countries, depending only on when certain preconditions occurred. It embraced processes of industrialization in terms of development laws.

Fundamentally, Alexander Gerschenkron's (1904–1978) “relative backwardness” theory dismissed this model, projecting that the development path of late-industrializing countries would differ from that of industrialized countries. However, assuming the overall importance of technology absorption, it also indicated that late-industrializing nations could progress by imitating technological knowledge of the industrialized countries. The latest attempts to explain processes of industrialization criticize this view for ignoring the complexities of technology absorption, thus talking about adaptation rather than imitation. They are “catching-up” models. Stress is on the knowledge-intensive nature of technology adaptation.

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