Industrialization broadly refers to the transformation of agrarian-rural societies to industrial-urban societies that are dominated by manufacturing and services. The beginning of this transformation, conventionally referred to as the industrial revolution, is typically traced to the late 18th century in England. Although the term has broader usage, “industry” is often equated with manufacturing, and industrialization specifically with the growth of manufacturing within the so-called factory system that began to proliferate at this time. The new factories featured mechanical power and the employment of specialized, waged labor to operate machines to supply large volumes of standardized goods to markets mediated by the price mechanism. In the UK, and subsequently in many other countries, the onset of industrialization featured the textile, iron and steel, machine tool, and coal industries. More generally, industrialization is seen as part of the Great Transformation that features the rise of market-based forms of exchange and rapid economic growth based on deepening divisions of labor and economic interdependencies across economic sectors. Indeed, industrialization has involved co-evolutionary changes in agriculture, energy, transportation, and service sectors, as well as in manufacturing. Globally, industrialization has been led and dominated by the capitalist or market economies of western Europe, their New World offshoots, and Japan. The Soviet Union, eastern Europe, and China emphasized industrialization within the framework of centrally planned economies during the mid-20th century; but they have since accepted market forces as the principal means of organizing the production and exchange of goods and services. Similarly, the recent rapid economic growth of newly industrializing economies (NIEs), especially in Asia, and the transitional economies of eastern Europe, has been led by the development of internationally competitive manufacturing sectors. Market-led industrialization is remarkably dynamic and both creative and destructive. While generating vast wealth and facilitating massive increases in human population, industrialization features structural crises and has imposed formidable problems of inequality, poverty, social cohesion, and environmental degradation. Indeed, on a global scale industrialized and rich (i.e., powerful) nations became synonymous with each other (along with poor, non-industrial nations). This connection between industrialization, broadly conceived, and economic growth is modified but not disrupted by the idea of post-industrial societies that are dominated by service sector jobs. Thus, these jobs are themselves highly specialized and many linked to goods-producing activities within increasingly globalized value chains. For 250 years industrialization has exerted massive impacts on society and economy that are now often discussed in the context of globalization. Moreover, the challenges of industrial transformation are incessant: leading countries and regions constantly search for new forms of growth, while laggards seek to transform agrarian-rural societies to an urban-industrial base and “catch-up” with the leaders. The generation of wealth needs to address issues of its distribution; and the imperatives of growth and efficiency cannot be divorced from social and environmental concerns. Over time and space these challenges are connected and different.
Urbanisation and the Onset of Modern Economic Growth