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1 - Britain, the Industrial Revolution, and Modern Economic Growth

from Part I - Regional Developments

Published online by Cambridge University Press:  03 June 2021

By
Stephen Broadberry
Edited by
Stephen Broadberry  and
Kyoji Fukao
Stephen Broadberry
Affiliation:
University of Oxford
Kyoji Fukao
Affiliation:
Hitotsubashi University, Tokyo
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Summary

The British Industrial Revolution marked the beginning of modern economic growth. This breakthrough built upon earlier episodes of GDP per head growth with the economy remaining on a plateau between these episodes. Growth was accompanied by structural change, with the declining share of agriculture matched by the rise of services as well as industry. As a result, Britain improved its position relative to the rest of Europe (the Little Divergence) and also improved its position relative to the leading Asian economies (the Great Divergence). The chapter examines the proximate sources behind economic growth in Britain during 1700–1870, including investment, growth in the number of workers, and accumulation of human capital. Together, these factors accounted for about two-thirds of the increase in output growth, leaving the other third to be explained by total factor productivity growth. However, the ultimate sources of Britain’s growth lay deeper in geography and institutions. The chapter also examines the effects of the Industrial Revolution on living standards and the impact of trade and empire.

Keywords

Industrial Revolutionmodern economic growthLittle DivergenceGreat Divergencestandard of livingempire
Type
Chapter
Information
The Cambridge Economic History of the Modern World , pp. 21 - 44
Publisher: Cambridge University Press
Print publication year: 2021

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