Revolution in Energy, Transport, and Industry
New Energy Sources
Two new energy sources managed to dethrone coal, oil, and electricity use. Electricity changed the location of businesses and their internal organization, which entailed both the declining price of energy, leading to increased productivity, and numerous applications: communications, lighting, transportation, and leisure. Oil was used for illumination, but progress in its distillation made it possible to extend its use.
New Means of Transport
The new energy revolution fueled new transport, which was an essential element of economic growth. Electricity allowed innovations in urban transport through trams and underground railways. Steam navigation shortened the duration of transoceanic travel. The opening of new channels, such as the Suez Canal (1869) and Panama Canal (1914), had a significant impact. The invention of the pedal and tire made possible the emergence of the bicycle, one of the most important basins. What really revolutionized transport was the autobicicleta (early motorcycle/automobile).
New Inventions, New Industries
The industrial drive was directly linked to technological innovation and development through a closer relationship between business and research. Technological progress became the result of the cooperation of a large number of experts, grouped in research laboratories. As a result of these investigations, new products such as glass, artificial fibers, rubber, chemical dyes, chemical fertilizers, and aluminum were discovered. The steel industry experienced a major expansion thanks to the production of steel and aluminum. The metals industry expanded its horizons with the new car industry and electrical appliances. The power industry found countless applications in lighting. The chemical industry had a major boost with the creation of new products and the development of the pharmaceutical industry.
The New Organization of Capital and Labor
During the 1st Industrial Revolution, most of the production was carried out in family businesses. However, the acceleration of growth and the implementation of recent inventions prompted the development of new business models and innovative production systems.
Business Concentration
The large investments needed to finance technological innovations were not available to small or family businesses and resulted in a rapid process of concentration.
- Horizontal concentration: Organized by companies working in the same production chain.
- Vertical concentration:
- Cartel: Association of companies to restrict or eliminate competition.
- Trust: Merger of several companies into a new one.
- Holding: Financial holding company that owns various miscellaneous capital firms to control their activities.
- Monopoly: A manufacturer or distributor has exclusive control over a product and imposes control over its price.
Mass Production
Taylorism is a method of industrial organization designed to increase productivity by eliminating unnecessary movements of labor and optimizing the time spent, in order to reduce costs. Production is organized in series through an assembly line. The most innovative application of Taylorism came from Henry Ford, who adapted his Detroit factory assembly line to automobile production, making a large number of cars at low cost. He used innovative machinery and skilled workers.