1.
COR2201: Technology and World Change
Seminar 2
Dr Rajah Kumar
Email: rajahkumar@smu.edu.sg
By looking at my weekly slides you give me an undertaking that this is Strictly for your
personal knowledge and not for unauthorized copying, further circulation and sharing to
others and any uploading on the web. Strict action will be taken by SMU for violation.

2.
1. Revision of what we did in Week 1.
2. We will see these two videos on Guns, Germs and Steel
Guns Germs and Steel Part 1
https://www.youtube.com/watch?v=i885hopsw6E
Guns Germs and Steel Part 2
https://www.youtube.com/watch?v=dCBod2jFFyQ
3. The Renaissance, Scientific Revolution and Enlightenment and
the first two industrial revolutions and why UK? You may pre-
read any materials on web, but we will cover in class.
4. Why Silicon Valley is unique – can it be replicated in other
places? What about Singapore? Class seminar.
TWC Week 2A and 2B Lesson Plan

3.
Last week revision by class

4.
Course Assessment
1) Class participation (individual) 20%
2) Group presentation of world changing technologies
(no report) 10%
A) Ancient tech; B) Energy, ICT; C) Life sciences, biotech etc.
3) Final group project presentation and report 30%
4) Final Examination 40%

5.
Can you name some industry Segments?

6.
Is Footwear industry an attractive Industry
for stakeholders?
If Yes – Why?
If No - Why?

7.
How would you know if an industry
segment is attractive?
Porter’s Five Forces, is a recognized tool for
identifying and evaluating the five forces, that are
recognized to discover the competitive intensity
and attractiveness (or lack of it) and determine
whether a business can be profitable based on the
profiles of similar industry organizations.

8.
Porter’s Five Forces
L
L
L
L
L

9.
2016 2015 2014 2013 2012 2011 2010
Net Sales 32376 30601 27799 25313 24128 20862 19014
Cost Of Goods Sold 17405 16534 15353 14279 13657 11354 10213.6
Gross Profit 14971 14067 12446 11034 10471 9508 8800.4
R&D Expense - - - - - - -
Selling Expense 10469 9892 8766 7780 7431 6693 6326.4
EBITDA 4502 4175 3680 3254 3040 2815 2474
Depreciation Amortization
- - - - - - -
Non Operating Income 140 58 -136 18 -54 33 42.9
Interest Expense 19 28 - - 3 4 -
Pretax Income 4623 4205 3544 3272 2983 2844 2516.9
Provisionfor Income Taxes 863 932 851 808 760 711 610.2
Minority Interest - - - - - - -
Investment Gains Losses
- - - - - - -
Other Income - - - - - - -
Income Before Extraordinaries And Disc Operations
3760 3273 2693 2464 2223 2133 1906.7
Extraordinary Items And Discontinued Operations
- - - 21 - - -
Net Income 3760 3273 2693 2485 2223 2133 1906.7
Sales Growth 2011-2016 CAGR 9.19% ; Sales 2020 = 37.4Bn
and (2.5Bn); 2021= 44.5Bn (5.7BN)

10.
Founder 1
Bill Bowerman - a track and field coach - at the University of
Oregon – exploring ways to give his athletes a competitive
advantage.
Experimented with different track surfaces, re-hydration drinks
and – most importantly – innovations, in running shoes.
But the established footwear manufacturers in 1950s, ignored
him - he began cobbling shoes for his runners.

11.
Founder 2
Phil Knight - talented middle-distance runner . Enrolled at
Oregon in 1955 and got a place in Bowerman’s track program.
MBA from Stanford. Class project hypothesis: “if Japan can
make good and cheap cameras to compete with Germany, they
can make good shoes”.
His letters to manufacturers in Japan and Asia went
unanswered. He started to work for Coopers and Lybrand.

12.
Nike and Onitsuka
Phil on his business trip to Japan called on Onitusaka -
Tiger shoes. Persuaded for distributorship for running shoes
in the US.
Phil sent several pairs to Bowerman, hoping to make a
sale.
 Bowerman stunned Knight by offering to become his
partner, and to provide his footwear design ideas to Tiger.

13.
Nike's Digital Transformation Efforts Continue
to Win Big.Nike’s Digital Transformation
Enters the Metaverse and Embraces Supply
Chain Automation.
https://www.intelligentautomation.network/transformation/articles/ni
kes-digital-transformation-efforts-continue-to-win-big

14.
Guns, Germs, and Steel

15.
Why GGS in this class?
 Human history before 1750 constitutes, 99% of the 5-
million-year history of our species
 If we start with stratified societies (e.g., post the
industrial revolution), we don’t fully explain why
societies are stratified or why some countries
industrialized first
 Hence, we must go back into history and pre-history, to
explain stratification

16.
Social Differentiation
The process by which different
statuses develop in any group,
organization, or society
Sports organization: players, owners,
managers, fans, cheerleaders, and
sponsors - all have a different status
within the organization.

17.
Social Stratification
A relatively fixed, hierarchical arrangement in society
by which, groups have different access to resources,
power, and perceived social worth.
In a sports organization:
Owners, control the resources of the teams.
Players, earn high salaries, yet do not control the
team resources.
Sponsors, provide the resources.
Fans, provide revenue.

18.
SOCIAL STRATIFICATION (SS) and SOCIAL INEQUALITY (SI)
 SS is the processes by which resources and
opportunities are distributed among various social
actors
 Bases for social stratification
 Social class, caste
 Race and ethnicity
 Sex and age
 Space and place
 Social inequality – the unequal sharing of scarce
resources and social rewards

19.
Social class – grouping of people with similar levels of
wealth, power, and prestige
Wealth – made up of assets (value of everything one
owns) and income (money earned through salaries,
investments, or capital gains
Power – the ability to control the behavior of others, with
or without their consent, based on force, possession of
special skills, knowledge, social status, personal
characteristics, custom/tradition
Dimensions of Social Stratification

20.
Prestige – respect, honor, recognition, or courtesy an
individual receives from other members of society
based on income, occupation , education, family,
residences, possessions, club memberships
Socioeconomic status – SES, rating that combines social
factors such as educational level, occupational prestige,
residence, income, used to determine an individual’s
relative position in the stratification system
Dimensions of Social Stratification cont.

21.
What do you see in GGS the two videos?
Discussion time

22.
Guns Germs and Steel part 1
https://www.youtube.com/watch?v=i885hopsw6E
Guns Germs And Steel Part 2
https://www.youtube.com/watch?v=dCBod2jFFyQ
Guns Germs And Steel part 3 – We skip not for exam
https://www.youtube.com/watch?v=aJ9espgY-Po

23.
The Old Stone Age
When people used simple stone tools - called the Old
Stone Age or Paleolithic Era.
2.5 million to 8000 BCE (cave art, fire, hominids (earlier
human like creatures), stone tools, nomads, hunters
and gathers)
During the Old Stone Age, people also learned to make
fire.

24.
The New Stone Age
Period when people began to settle permanently in
one location - called the Neolithic Era, or the New
Stone Age.
8,000 BCE to 3,000 BCE (looms for weaving,
domesticate animals, agriculture, people shifted from
hunting and gathering to agriculture and herding)

25.
Human timeline
 Human evolution 1 million years
 Homo sapiens 120,000 years ago
 Paleolithic
 Old stone age
 Agricultural revolution
 10,000 years ago
 Neolithic
 New stone age
 Industrial revolution
 1750 CE.

26.
After the Ice Age
 Human societies began
to change 13,000 years
ago
 when the last ice age
melted

27.
After the Ice Age
 Different societies
resulted:
 Some literate
 industrial
 Some illiterate
 agricultural
 Some hunter gatherers
 retaining stone tools

28.
Inequality and Extermination
 “Historical inequalities
 have cast long shadows on the
modern world
 Because the literate societies
with metal tools
 Conquered or exterminated the
other societies

29.
Now let’s start with Guns, Germs and Steel
Objectives
Understand some basic questions on early technological
development (as part of human civilization)
Understand the differences between “proximate” and
“ultimate” causes in shaping the progress of human
history

30.
Spread of Humans from Africa
origins 7
million
BCE
by
500,000
BCE
by 1
million
BCE
by 20,000
BCE
By 40,000
BCE
33,000 BCE
1000 CE
1,200 BCE
500 CE
by 12,000
BCE
by 11,000
BCE
by 2,000
BCE
by 10,000
BCE

31.
Some questions ……
What shapes winners and losers in domination? JD
Why was balance of power so uneven? JD
Why Europeans colonized the rest of the World? JD
What about today, as leadership in technology and
power and, as an economy? What plays a crucial role?

32.
Where did it all start? The
Fertile Crescent

33.
1. According to Jared Diamond, what are the
three major elements that separate the world’s
“haves” from the “have nots”?
Answer: Guns, germs, and steel

34.
2. What is Yali’s question and what cargo he
was referring to?
 “Why is it that you white people
developed so much cargo and brought it to
New Guinea, but we black people had little
cargo of our own?”
What “cargo” was he referring to?

35.
2. Jared Diamond refers to the people of New Guinea as
“among the world’s most culturally diverse and adaptable
people in the world”, yet they have much less than modern
Americans.
Diamond has developed a theory about what has caused these
huge discrepancies among different countries, and he says it
boils down to, ‘geographic luck’.
Give some examples from the film to support Diamond’s
theory.

36.
Give some examples from the film to support
Diamond’s theory on ‘geographic luck’ .
A. People living in the Middle East (Fertile
Crescent) had all of their resources, compared
to the relatively small number of resources
provided by the jungle areas of New Guinea.

37.
B. Having more food resources and the ability
to store them, led people to become more
agrarian and less reliant on being hunter-
gatherers. This allowed societies to develop
specialists, who could improve and develop
technologies in a variety of areas.
Give some examples from the film to support
Diamond’s theory on ‘geographic luck’
continued….

38.
C. Societies that were not blessed with growing
conditions that support nutrient rich crops or
allow for their easy long-term storage, are simply
not as successful at farming, thus must continue
to rely on hunting and gathering to survive
Give some examples from the film to support
Diamond’s theory on ‘geographic luck’
continued….

39.
3. For thousands of years, people have been
cultivating crops. Describe the process used to
domesticate crops and create plants that yielded
bigger, tastier harvests.
Answer: By domesticating crops, people interfere
with what actually happens in nature, by planting
and harvesting at specific times, choosing only the
biggest, tastiest, easiest to harvest seeds from the
crops, and selecting individual plants for use in
breeding the next year’s crops to increase the
harvest.

40.
4. If you look at the animals for domestication is
Diamond’s theory about geographic luck holding
good?

41.
4. If you look at the animals for domestication is
Diamond’s theory about geographic luck holding
good?
Domesticated animals lead to greater productivity,
and the majority of these domesticable animals
were native to the temperate climates of the world,
where the most powerful civilizations developed.

42.
5. What is the argument for inability to
domesticate African Zebra for example?

43.
6. A. Do you agree with Jared Diamond when he
says, of a civilizations ability to gain power,
wealth, and strength, “...what’s far more
important is the hand that people have been
dealt, the raw materials they’ve had at their
disposal.”
What do you think, and does it hold to today?

44.
A huge part of a peoples' success is outside of their
control.
The geographic location of people, has an outstanding
effect on their success.
The people of the Fertile Crescent, are a fantastic
example of this. Their fortunate geographic positioning
led them developing specialization and other things vital
to civilization.
Think about China today and even our own Nation
Singapore

45.
7. At the time that the Spanish conquistadors
invaded the Inca Empire, they were armed with
state-of-the-art weaponry. They are:

46.
7. At the time when the Spanish conquistadors
invaded the Inca Empire, they were armed with
state-of-the-art weaponry.
Horses, that made them appear like God,
like half man, half beast warriors, body
armor, guns, and steel swords

47.
8. What is Jared Diamond’s explanation, for why the
Spanish had advanced steel swords while Inca’s
were still making tools and weapons from bronze?

48.
8. What is Jared Diamond’s explanation for why the
Spanish had advanced to steel swords while Inca’s
were still making tools and weapons from bronze?
Answer: Because Europe was geographically close
to the Fertile Crescent, they inherited the 7,000
years of metal technology that had been
developed there.
Because they had a diversified society that
allowed for specialization, the Spanish devoted
time and effort to producing the longest,
strongest, sharpest swords possible.

49.
9. How did the battle tactics used by the Spanish
conquistadors, help the small army defeat the Inca
army, that outnumbered it by the thousands?

50.
9. How did the battle tactics used by the Spanish
conquistadors help the small army defeat the Inca army
that outnumbered it by the thousands?
Answer: The Spaniards begin by surprising the
Incas, firing their guns and coming out of hiding on
horseback.
As they rode, the conquistadors used their swords
to hack, cut, and stab the Incas who were panicking
and fleeing rather than standing firm.
Had the Incas known more about this style of
fighting, they could have been victorious by sheer
numbers if they had stood their ground against the
cavalry

51.
10. According to Jared Diamond, what made the
Europeans “accidental conquerors”?

52.
10. According to Jared Diamond, what made the
Europeans “accidental conquerors”?
Answer: Because of their geographic location and
history, the Europeans were the first to acquire
guns, germs, and steel, therefore they could
conquer other lesser developed civilizations

53.
11. What is proximate and ultimate
causation

54.
11. What is proximate and ultimate
causation

55.
11. What is proximate and ultimate
causation
A Proximate Cause is an event which is closest,
or immediately responsible, for producing some
observed result.
This exists due to a higher-level ultimate cause
which is usually thought of as the "real reason"
something occurred.

56.
12. What resulted in Pizarro army’s win over
Atahuallpa as proximate causes?

57.
12. What resulted in Pizarro army’s win over
Atahuallpa as proximate causes?
Proximate causation/factors:
Military technology: guns, steel weapons
and horses
Germs: infectious diseases (endemic in
Eurasia)
Maritime technology (European)
Centralized political organization (of
European states)
Writing

58.
13. What resulted in Pizarro army’s win over
Atahuallpa, as ultimate causes?

59.
13. What resulted in Pizarro army’s win over
Atahuallpa as ultimate causes?
Ultimate causation:
East/west axis ->
Ease of species spreading + Many suitable
wild species ->
Many domesticated plant and animal
species ->
Food surpluses, food storage ->
Large, dense, sedentary, stratified
societies

60.
Development Diagram
Ultimate
Factors
Proximate
Factors
East/West
Axis
Ease of
species
spreading
Many suitable
wild species
Many domesticated plant
and animal species
Food surpluses, food
storage
Large, dense, sedentary,
stratified societies
technology
Epidemic
disease
Political
organization,
writing
Ocean-
going ships
Guns, steel
swords
horses

61.
The problem Diamond tried to solve
Why is this problem usually difficult to solve?
simultaneously changing variables: e.g.
 ancestral origin and environmental variables
This is commonly known as the identification
problem

62.
Background – The Identification Problem
Social scientists can seldom/ never carry out controlled
experiments, in the same way as natural scientists (e.g.,
physicists, biologists)
Available observations of market outcomes, are results of many
different behaviors and relations, which have mutually
interacted effects
Produces interdependence problems, i.e., difficulties in using
observed data to identify, estimate, and test the underlying
relations in an unambiguous way

63.
Example of Identification Problem
Simple demand & supply (Economics)
What happens when both demand and supply curves shift at
the same time?
Whenever the demand and supply curves both shift, either
quantity or price is in-determinant.

64.
How do we solve the identification
problem?
A cleverly conceived natural experiment is one way to
help solve the identification problem
Applicable in social sciences, economics, sociology,
management & organization, strategy, and other
disciplines…

65.
Solution to Diamond’s problem –A natural experiment of
history: Maori vs. Moriori
Maori and Moriori clash: Maori won due to more advanced
technology and weapon
Population origin, or environment, or both?
Origin of Moriori and Maori:
~1200 B.C. a group of farming, fishing, seafaring people from
Bismarck Archipelago (north of New Guinea) reached Polynesian
islands. Process largely completed by A.D. 500
Same founding population

66.
Environment?
But settled into different environments
Ancestral Maori who colonized Chathams -> crops could
not grow in cold climate, revert to being hunter-
gatherers -> small population, simple economy, simple
technology and weapon => became Moriori vs. those
Maori who remained in NZ with -> dense population ->
grow and store crop surpluses -> support craft specialists,
chiefs, and part-time soldiers. Developed tools and
buildings -> more advanced technology and weapons

67.
A Natural History Experiment
 1835
 Chatham Islands - discovered by
British Seal Hunting ship
 500 miles off coast of New
Zealand
 News told to native New
Zealanders
 Chatham Islands:
 Abundance of fish, food
 Inhabitants numerous
 Don’t know how to fight
 No weapons
http://www.laughtergenealogy.com/bin/histprof/images/ship.jpg

68.
Maori of New Zealand
 Nine hundred of the native
Maori people of New Zealand,
 armed with guns, arrived in
the Chatham Islands
announced that the
Chatham Islands people
(the Moriori)
 were now their slaves,
 and killed those who
objected.
Maori Warrior
http://www.iiirm.org/Events/Film%20Festivals/festival_films/filmography_photos/utu_275.jpg

69.
Natural History Experiment
 This is a natural
history experiment.
 Both the Maori and
Moriori
 descended from
the same
Polynesian
farmers who
settled New
Zealand.

70.
Moriori
 When the the Moriori moved
to the Chatham islands
 hundreds of years earlier
 could not farm due to the
cold climate, and
 became hunter/gatherers.
 They learned to live
peacefully
 because their resources
were so limited.
http://www.taiko.org.nz/Moroiri1.jpg

71.
Maori
 The New Zealand Maori
 continued farming
 dense populations
 more complex technology and
political organization
 ferocious wars:
 The difference was
 geography.
 Competing agricultural societies
 are prone to warfare
Maori Agriculture
http://www.nzetc.org/etexts/Bes02Maor/Bes02Maor368a(h280).jpg

72.
European domination at 1500 AD
Thus, genetic diversity + ease of spreading
domesticable species of plants & animals along the
continental axis allowed Europe specially to
develop large societies.
Biodiversity and proximity (and filth!) created
disease and immunities
Dense populations produced governments,
technology, and desire to explore for new worlds.
In the modern context - ambitions of China?

73.
Conquest of the New World
 "The biggest population
shift of modern times has
been the colonization of
the new World, by
Europeans, and the
resulting
 conquest,
 numerical reduction,
 or complete
disappearance of
most groups of Native
Americans".

74.
Questions…
Do you agree with Diamond’s analysis of history?
 Are current differences in economic development
simply due to “differences in real estate” (i.e.
geography)?
 Are there alternative explanations?
 How useful is this theory for modern times?

75.
Some criticisms
Eurasia has been having the largest population in the
last 3000 years. So at any particular time some where
here will be the most powerful and advanced
civilization
Explaining temporary dominance of particular
societies by permanent features such as geography -
permanent wrt historical time frames- but in
geological time frames where geography is not
permanent
William H McNeill Was Professor
Emeritus of History at the University of Chicago

76.
Diamond’s emphasis of east-west axis over north-
south is an oversimplification – parts of Eurasia with
similar latitudes have different climates.
The spread of useful crops and animals was
determined by human activities viz trade and migration
than just geographical factors.
William H McNeill

77.
Political fragmentation has been an disadvantage as much as we
see in West Africa. JD talks about Europe fragmented and it
helped.
For over 5000 years Egypt, had a complex society and huge
population, but it fortunes varied from one period to the other.
William H McNeill

78.
How can he claim that “over the hundreds of generations of post-Ice Age human
history, and over a large continent’s thousands of societies, cultural differences
become sifted to approach limits imposed by environmental constraints”?
Much more powerfully than any other species, we change the environment
around us; and have done so ever since our ancestors began to control fire and
to use tools. Learned behavior, channeled along innumerable different paths by
divergent cultures, is what allows us to do so.
 Human beings do indeed often “approach limits imposed by environmental
constraints” only to find a way to overcome and escape those constraints, as
the history of technology repeatedly illustrates.
I hasten to add that failures also figure largely in the historic record when
environmental constraints disrupted human schemes and drastic depopulation
and cultural collapse ensued.
William H McNeill

79.
People can alter their environments for the worse. For e.g.
Mesopotomia which JD calls as cradle of Western civilizations had
committed ecological suicide by using irrigation techniques that
caused the soil to become salty and infertile.
William H McNeill

80.
Recent studies show modern Japanese people are the
product of the agricultural expansion – an expansion of
Korean farmers, around 400B.C. into Southwestern Japan
and advancing northeast up to the Japanese archipelago.
They brought intensive rice agriculture and metal tools and
they mixed with original Japanese population to produce
modern Japanese – very similar to expanding fertile crescent
farmers mixed with Europe’s hunter/gatherers to produce
modern Europeans.
Let’s think how they were so economically advanced after US
before China caught up?

81.
CGS for exam
No need to remember dates, events, places and plants and
animals.
If you look at videos and grasp critical strategic points that
would be suffice for exam.
There will be very few questions in exam.

82.
Lesson 2B

83.
Let’s discuss
 The Scientific Revolution and Enlightenment
 The first two industrial revolutions (UK, (Germany), US)
 Why these periods of concentrated activity arose , where and the impacts
on society and economy (via technology)
 The core “technologies” involved
 The organizational form that facilitated these – Factories
 Where innovations came from

84.
Dark Ages/Medieval times
400 - 1200 AD
 Not much recorded history.
 Growth of mankind limited as people were bound
physically and mentally by their “place” in society.
 The church had become as powerful or more powerful
than the king and Government.

85.
Fast forward over most of the 10,000 years since
Diamond described it, to Europe
The Renaissance (14-16th century)
Scientific Revolution/Enlightenment (18th century)
Industrial Revolutions
First in UK (18th century)
Ended in the US – early 20th Century

86.
What do you know about Renaissance?
Formative period between the “early” civilizations and the “modern”
where the Enlightenment (scientific and otherwise) and industrial
revolutions took place.
Cultural movement began in Florence and spread to rest of Europe -
Wealthy patrons supported arts and education
Humanism (study of human values and concerns) spread throughout
Western Europe.

87.
Inventions in this Renaissance period
Mechanical clock
Hourglass
Printing press
Eyeglasses
Musket
Rudder
Flush toilet
Match
Submarine
Thermometer
Adding machine

88.
The Scientific Revolution and Enlightenment

89.
New Ideas
During the Middle Ages, scientific ideas were
largely based on religious beliefs
During the 17th and 18th Centuries, scholars
began relying on observation and mathematics
to transform the natural sciences
The “scientific revolution”

90.
A. The Scientific Revolution
challenged the traditional
way of understanding the
universe
B. These ideas were
controversial because they
challenged accepted
truths, respected ancient
scientists and the Roman
Catholic Church
The Scientific Revolution-

91.
Two Theories of the Universe
A. The Geocentric Theory
envisioned an earth-centered
universe
1. This idea was first proposed
by Aristotle
2. It was later supported by
Ptolemy

92.
B. The Heliocentric Theory
envisioned a sun-centered
universe
1. This idea was
proposed by a Polish
astronomer,
Nicoloaus
Copernicus, during
the Renaissance
2. It was supported
by the Italian
astronomer,
Galileo

93.
C. Galileo used the telescope (which he invented) to study the
movement of the planets and published works supporting
Copernicus’ Heliocentric Theory

94.
D. Scientific Discoveries Validate the
Heliocentric Theory
A. The later findings of Johannes
Kepler, a Danish mathematician, used
data to prove the Heliocentric Theory
1. He also discovered that planets
have elliptical (not circular) orbits
around the sun

95.
E. Sir Isaac Newton was the
pioneer of modern physics
He was an English scientist who
developed the law of gravity to
explain the movement of the
planets - further confirmed the
Heliocentric Theory

96.
The Scientific Method involves
the following steps:
1. Developing a question
2. Forming a hypothesis
3. Testing the hypothesis through
experiments
4. Analysis of data
5. Forming a conclusion
Scientific approach of Copernicus and Galileo eventually
turned into a new approach to science
called the “Scientific Method”

97.
What Does it all Mean?
Scientific Revolution as we saw challenged
traditional thinking
This set the stage for Enlightenment (Age of
Reason which involved, political theorists,
questioning traditional beliefs about government

98.
Industrial Revolution

99.
Conditions prior to the industrial
revolution in Britain
Common lands had low agricultural productivity
Aristocracy ruled (over what was formerly serfdom – sort of slavery)
Little value attached to knowledge, progress and individual gain
Before the industrial revolution, people “worked in their homes or in
fields or in attached workshops” (Mokyr) and it was craft production –
hand made

100.
Historical Significance of the Industrial
Revolution
 The Industrial Revolution changed human life
drastically
 More was created in the last 250+ years than in the
previous 2500+ years of known human history

101.
The Industrial Revolution
 Machines were invented -replaced human labor
 New energy sources were developed to power the
new machinery – water, steam, electricity, oil (gas,
kerosene)
 Increased use of metals and minerals
Aluminum, coal, copper, iron, etc.

102.
The industrial revolutions and the core
technology in each
First - Britain - mid-late 1700s
 Steam engine, textiles (first application), iron making
“Second” – a period involving
 Germany - chemicals industry, electricity, power
 US - Mass production (organization of work)
“Third” –US (following Britain earlier)

103.
Timeline – technology and economic
transformation

104.
In the words of Joel Mokyr an American
economic historian (Professor of Arts and
Sciences at NWU)
The Industrial Revolution (IR) was not the beginning of
“industrialization”
Nor the beginning of innovation
Nor the absolute beginning of economic growth as such Britain was
very prosperous.
The Industrial Revolution was in some sense a change in the degree
of change.

105.
Factors causing the industrial revolution (1760-1830)
Changes in 5 areas happened
 Technological change:
 Technologies were incrementally improved, with
occasional major advances (esp. energy, textiles, iron).
 Britain was a “technologically competent society”
 Economic changes – supportive institutions
 Government respected private property, and
 protected interests of inventors and entrepreneurs

106.
What factors caused it…
 Population changes
 Laws on land ownership led to agricultural
productivity improvement, so population
could “move off” the land and into cities (giving a
workforce)
 Social attitudes
 Cultural climate at the time supported idea that
to be “rich” through commercial and industrial
success - move towards capitalism
 Natural resources – their availability

107.
The first industrial revolution
 Industrial England, Early 19th Century
English entrepreneurs
established their factories,
not in the traditional
population centers such as
London, but out of town,
close to water power and
coal fields and with easy
access to markets.
Source: Pearson publishers

108.
The factory – the organizational form that
used technologies to make things
 In addition to the core technologies, there was
 the factory (Molkyr p. 6)
 Production take place in a large room in coordinated
fashion and under supervision
 Factories were needed
 To use new technologies, e.g. steam engines economies of
scale were needed
 Need for quality control

109.
 Economy-wide impacts “less than spectacular” with
growth in income per capita (Mokyr):
 1760-1800 ~ 0.2 percent/year
 1800-1830 ~ 0.5 percent
 Hard working conditions
 Factory work was very hard on workers
 Poor state of cities
 Loss of independent businesses
Extra: Other observations

110.
Bottom-line: The nature of technological change
during the industrial revolution
 How were technologies created? There are varying degrees of invention
(Mokyr): In addition to
 (1) the “heroic inventions”, also
 (2) occasional big advances, e.g. Watt’s specific
 improvements
 (3) Incremental changes
 Also networks and other organizations allowing inventors to
build on each others’ ideas
 This is cumulation
 Cumulation in the total stock of knowledge (as with science).

111.
… Bottom-line: The nature of
technological change
 The factory facilitated the new technologies’
applications
 Diffusion and impact came slowly
 via incremental variants of the same technology,
e.g. application of steam
 engines to various sectors, from mines to factories
to (rail) transportation

112.
Developments - summary
 Mass production of goods
 Increased numbers of goods
 Increased diversity of goods produced
 Development of factory system of production
 Rural-to-urban migration
 People left farms to work in cities
 Development of capitalism
 Financial capital for continued industrial growth
 Development and growth of new socio-economic classes
 Working class, bourgeoisie, and wealthy industrial class
 Commitment to research and development
 Investments in new technologies
 Industrial and governmental interest in promoting invention, the
sciences, and overall industrial growth

113.
Summary: Technological change
 In science and technology,
 Knowledge creation was by individuals, taking advantage of
informal networks
 Science advances, first based on scientific methods, then
cumulatively,
 Eventually, this spawns technology, which advances via inventive,
incremental, and combinative ways
 The factory emerged to take advantage of technologies
 The American form of mass production took the factory form to
its limit with key process innovations
 Illustrating a cumulation and combination of business
(process) innovations

114.
England’s Resources: Capital
 The Commercial Revolution made many English
merchants very wealthy
 These merchants had the capital to invest in the
factory system – money to buy buildings, machinery,
and raw materials

115.
England’s Resources: Colonies and Markets
 Wealth from the Commercial Revolution spread beyond the
merchant class
 England had more colonies than any other nation
 Its colonies gave England access to enormous markets
and vast amounts of raw materials
 Colonies had rich textile industries for centuries
 Many of the natural popular cloths were originally
created in India
 China had a silk industry and was a pioneer

116.
England’s own resources: Raw Materials
 England possessed the necessary raw materials to create the
means of production
 Coal – vast coal reserves powered steam engines
 Iron – basic building block of large machines, railroad tracks,
trains, and ships

117.
England’s Resources: Merchant Marine
 World’s largest merchant fleet
 Merchant marine built up from the Commercial
Revolution
 Vast numbers of ships could bring raw materials
and finished goods to and from England’s colonies
and possessions, as well as to and from other
countries

118.
England’s Resources: Geography
 England is the political center of GB an island
 GB did not suffer fighting on its land during the wars of the
18th century
 Island has excellent harbors and ports
 Damp climate benefited the textile industry (thread did not
dry out)
 Government stable
 No internal trade barriers

119.
“Necessity Is the Mother of Invention”
Spinning machine for
Yarn from cotton
Need to speed up
weaving
Power loom created for
weaving

120.
“Necessity Is the Mother of Invention”
Power loom for weaving
Increased demand for raw
cotton
Invention of the cotton gin
to septate cotton from seeds

121.
“Necessity Is the Mother of Invention”
Cotton gin to septate cotton from
seeds
Demands for stronger iron
Improvements in iron smelting and
the development of steel
(Bessemer process)

122.
“Necessity Is the Mother of Invention”
As more steam-
powered machines
were built, factories
needed more coal to
create this steam
Mining methods
improved to meet the
demand for more coal
 The process of inventing never ends
 One invention inevitably leads to improvements upon it and
to more inventions

123.
Modern Day Example
• An excellent example of this phenomenon is the cell
phone. Cell phones were initially used by professionals
who needed fast communications for business. The
everyday usefulness of cell phones was quickly apparent,
increasing demand. Cell phone towers were built around
the globe, and cell phone technology continues to grow
more complex. Compare the original “brick” cell phone to
the iPhone.

124.
Results of the Industrial Revolution
• Expansion of world trade
• Factory system
• Mass production of goods
• Industrial capitalism
• Increased standard of living
• Unemployment
Economic
Changes
• Decline of landed aristocracy
• Growth and expansion of democracy
• Increased government involvement in society
• Increased power of industrialized nations
• Nationalism and imperialism stimulated
• Rise to power of business people
Political
Changes
• Development and growth of cities
• Improved status and earning power of women
• Increase in leisure time
• Population increases
• Problems – economic insecurity, increased deadliness of war, urban slums, etc.
• Science and research stimulated
Social
Changes

125.
Economic Changes:
Increased Standard of Living?
 Mass production made manufactured goods less
expensive, so more people could afford them
 Standard of living wasn’t raised for everyone – factories
paid low wages, and many immigrants and rural-to-
urban migrants lived poorer lives than their parents and
grandparents had lived

126.
2nd Industrial Revolution
 A 2nd Industrial Revolution quickened the pace
of industrialization, forcing much more rapid
change in European society between 1870 and
World War I.
 Mechanized industry, powered by new forms
of energy, spread to all European states,
though not to every region within them; it
vastly increased the quality of goods available
to large segments of the population, and not
just to the wealthy.

127.
2nd Industrial Revolution
 By the end of the century, researchers had identified
the causes of several killer disease: typhoid,
tuberculosis, cholera, tetanus, diphtheria, and leprosy.
 Quarantines, immunizations, and vaccinations could
then be used.
 Population of India and China outstripped the food
supply.
 Population of Europe doubled between 1800 and
1900 and created overcrowding.

128.
Accelerated Urbanization
 Rapid industrial development urbanized northwestern
Europe and the United States.
 Cities became more numerous, much larger, and more
densely populated.
 For example, between 1866 and World War I, Berlin grew
from half a million to two million. At unification,
Germany had just 3 cities of more than 100,000 people;
by 1903, it had 15.
 During the same time span, Paris grew from 2 to 3
million.
 By the end of the century, most of western Europe and the
U.S. had taken some steps to provide sanitation, a public
water supply, policing, and public transport.

129.
Are China and India left behind in IR?
There may be some euro centricity when some argue about Asia
Some argue India and China were robbed
 “Without the destruction of India’s rich textile industry, without the
takeover of the spice trade, without the genocide of the native
American tribes, without African slavery, the Industrial Revolution
would not have resulted in new riches for Europe or North America.
It was this violent takeover of Third World resources and markets
that created wealth in the North and poverty in the South”.
Colony and Opium wars in China kept the Chinese busy with issues
of survival?

130.
Renaissance, Scientific and Industrial
Revolutions 1 and 2 for exam
I will skip to limit content for the sake of exam but it’s
important as a starting point to understand the present
and may be the future.