Explanation:
In this section I shall look at the way that technological innovations in previous eras, such as the invention of electricity in the early 1900s, radically affected the way society organised production and at how these changes spurred general economic growth. In many instances, the changes were so large that they defined an entire period, just as the rise of information technologies has led some to call the current era the ‘information age’.
The way that technological change can fundamentally alter society is best viewed through the lens of previous industrial revolutions. The term Industrial Revolution usually refers specifically to the series of technological changes that occurred in England between 1760 and 1850 (such as steam power). More generally, the term refers to eras when rapid and significant technological changes fundamentally alter the way that production is carried out in society, affecting not only how people work but also how they live their lives. Consider the impact that electricity in the Second Industrial Revolution had not only on factories but also on the lives of families in their homes. Thus an industrial revolution occurs when new technological inventions and innovations fundamentally transform the production processes of goods and services to such an extent that all society is affected.
For our purposes the words ‘invention’ and ‘innovation’ can be used interchangeably. More specifically, however, the term ‘invention’ refers to the discovery of new products or processes, while ‘innovation’ refers to the commercialisation (bringing to the market) of new products or processes. Furthermore, we can distinguish between product innovations and process innovations. Product innovations result in the production of a new product, such as the change from a three-wheel car to a four-wheel car, or the change from LP records to CDs. Process innovations increase the efficiency of the methods of production of existing products, for example the invention of the assembly-line technique.
The inventions and innovations that form industrial revolutions are those that open new doors and create new ways of doing things, not simply those that fill gaps in existing ways of doing things (Mokyr, 1997). The core of the First Industrial Revolution in the eighteenth century was a succession of technological changes that brought about material advances in three basic areas: (1) the substitution of mechanical devices (such as machines) for human labour; (2) the substitution of inanimate sources of power (such as steam) for animate sources of power (such as horse power); and (3) the substitution of mineral raw materials for vegetable or animal substances, and in general the use of new and more abundant raw materials (Landes, 1972).
