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RK Lesson 2 Student Slides

  1. 1. COR2201: Technology and World Change Seminar 2 Dr Rajah Kumar Email: 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. 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 Guns Germs and Steel Part 2 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. 3. Last week revision by class
  4. 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. 5. Can you name some industry Segments?
  6. 6. Is Footwear industry an attractive Industry for stakeholders? If Yes – Why? If No - Why?
  7. 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. 8. Porter’s Five Forces L L L L L
  9. 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. 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. 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. 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. 13. Nike's Digital Transformation Efforts Continue to Win Big.Nike’s Digital Transformation Enters the Metaverse and Embraces Supply Chain Automation. kes-digital-transformation-efforts-continue-to-win-big
  14. 14. Guns, Germs, and Steel
  15. 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. 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. 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. 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. 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. 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. 21. What do you see in GGS the two videos? Discussion time
  22. 22. Guns Germs and Steel part 1 Guns Germs And Steel Part 2 Guns Germs And Steel part 3 – We skip not for exam
  23. 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. 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. 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. 26. After the Ice Age  Human societies began to change 13,000 years ago  when the last ice age melted
  27. 27. After the Ice Age  Different societies resulted:  Some literate  industrial  Some illiterate  agricultural  Some hunter gatherers  retaining stone tools
  28. 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. 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. 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. 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. 32. Where did it all start? The Fertile Crescent
  33. 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. 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. 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. 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. 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. 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. 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. 40. 4. If you look at the animals for domestication is Diamond’s theory about geographic luck holding good?
  41. 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. 42. 5. What is the argument for inability to domesticate African Zebra for example?
  43. 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. 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. 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. 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. 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. 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. 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. 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. 51. 10. According to Jared Diamond, what made the Europeans “accidental conquerors”?
  52. 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. 53. 11. What is proximate and ultimate causation
  54. 54. 11. What is proximate and ultimate causation
  55. 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. 56. 12. What resulted in Pizarro army’s win over Atahuallpa as proximate causes?
  57. 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. 58. 13. What resulted in Pizarro army’s win over Atahuallpa, as ultimate causes?
  59. 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. 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. 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. 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. 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. 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. 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. 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. 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
  68. 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
  69. 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. 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.
  71. 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
  72. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 82. Lesson 2B
  83. 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. 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. 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. 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. 87. Inventions in this Renaissance period Mechanical clock Hourglass Printing press Eyeglasses Musket Rudder Flush toilet Match Submarine Thermometer Adding machine
  88. 88. The Scientific Revolution and Enlightenment
  89. 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. 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. 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. 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. 93. C. Galileo used the telescope (which he invented) to study the movement of the planets and published works supporting Copernicus’ Heliocentric Theory
  94. 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. 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. 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. 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. 98. Industrial Revolution
  99. 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. 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. 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. 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. 103. Timeline – technology and economic transformation
  104. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 119. “Necessity Is the Mother of Invention” Spinning machine for Yarn from cotton Need to speed up weaving Power loom created for weaving
  120. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.