Social Sciences in China (Chinese Edition)

No.8, 2018

 

Systemic Innovation in the British Cotton Textile Industry during the Industrial Revolution

(Abstract)

 

Ma Ruiying and Yang Song

 

The cotton textile industry was crucial to British industrialization and a cornerstone of its socioeconomic prosperity. Systemic innovation was a key feature in the industry’s rise; its mutually reinforcing and interactive model of innovation represented a new combination of the factors of production, and the concerted effect of these innovations enabled the industry to maintain its competitive advantage. Technical innovation raised labor productivity; the new factories enabled large-scale production; innovations in credit financing solved the emerging industry’s capital problem; the global distribution of resources not only controlled the sources of raw cotton supply, but also opened up a series of new markets; and entrepreneurial innovation made possible new combinations of the factors of production and encouraged the synergy and integration of different elements. Systemic innovation was the key factor in the development of the British cotton textile industry.