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The New Industrial Revolution: Consumers, Globalization and the End of Mass Production

Overview

The rapid emergence of China and India as prime locations for low-cost manufacturing has led some analysts to conclude that manufacturers in the "old economies"—the U.S., U.K., Germany, and Japan—are being edged out of a profitable future. But if countries that historically have been at the forefront of events in manufacturing can adapt adroitly, opportunities are by no means over, says the author of this timely book. Peter Marsh explores 250 years in the history of manufacturing, then examines the ...

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Overview

The rapid emergence of China and India as prime locations for low-cost manufacturing has led some analysts to conclude that manufacturers in the "old economies"—the U.S., U.K., Germany, and Japan—are being edged out of a profitable future. But if countries that historically have been at the forefront of events in manufacturing can adapt adroitly, opportunities are by no means over, says the author of this timely book. Peter Marsh explores 250 years in the history of manufacturing, then examines the characteristics of the industrial revolution that is taking place right now.

The driving forces that influence what types of goods are made and who makes them are little understood, Marsh observes. He discusses the key changes in what is happening in manufacturing today, including advances in technology, a greater focus on tailor-made goods aimed at specific individuals and industry users, participation of many more countries in world manufacturing, and the growing importance of sustainable forms of production. With broad historical sweep and dozens of engaging examples, Marsh explains these changes and their import both for consumers making purchase choices and for manufacturers assessing how to participate successfully in the new industrial era.

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Editorial Reviews

Bryan Betts - Engineering and Technology
"Highly readable and engaging, liberally peppered with anecdotes that convey both Marsh's knowledge of the very human nature of industry… The New Industrial Revolution will be a valuable read for anyone who wants to understand the role of manufacturing." —Bryan Betts, Engineering and Technology
Global Journal
"Marsh's book takes us back to basics, and looks at the challenges raised by re-industrialisation… A must-read."—Global Journal
Financial Times - Evan Davis
"What is so useful about Marsh's contribution in the New Industrial Revolution is that he has made an objective assessment of the evidence. And there are few people in Britain who are better equipped to do so."—Evan Davis, Financial Times
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Product Details

  • ISBN-13: 9780300197235
  • Publisher: Yale University Press
  • Publication date: 10/8/2013
  • Edition description: Reprint
  • Pages: 320
  • Sales rank: 983,520
  • Product dimensions: 5.00 (w) x 7.70 (h) x 1.00 (d)

Meet the Author

Peter Marsh is former manufacturing editor for the Financial Times. He lives in London.

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Read an Excerpt

THE NEW INDUSTRIAL REVOLUTION

CONSUMERS, GLOBALIZATION AND THE END OF MASS PRODUCTION
By PETER MARSH

YALE UNIVERSITY PRESS

Copyright © 2012 Peter Marsh
All right reserved.

ISBN: 978-0-300-11777-6


Chapter One

The growth machine

In the beginning

    'Gold is for the mistress – silver for the maid –
    Copper for the craftsman cunning at his trade.'
    'Good!' said the Baron, sitting in his hall,
    'But Iron – Cold Iron – is master of them all.'

So wrote Rudyard Kipling, the celebrated English writer who – for much of his life – lived in the home of a seventeenth-century ironmaster. Kipling's words are as true today as they were when he was at the peak of his fame in the early 1900s and became the youngest ever person to receive the Nobel Prize for Literature. Since the beginning of civilization to 2011, the human race has created goods containing about 43 billion tonnes of iron. Of this huge amount of metal, which has ended up in products from nuclear reactors to children's toys, almost half has been made since 1990. Most iron now used reaches its final form as steel, a tougher and stronger form of the metal containing traces of carbon.

Of the earth's mass of some 6,000 billion billion tonnes, about a third – so scientists estimate – is iron. Most of it is too deeply buried to be accessible. Even so, there is enough iron available fairly close to the surface to keep the world's steel plants fed with raw materials for the next billion years, assuming 2011 rates of output. Iron is almost always found as a compound. The most common are iron oxides, found in minerals such as hematite and magnetite. In these materials, iron and oxygen are linked in different combinations. To make iron from iron oxide requires a process called smelting. Smelting is what happens when minerals containing oxide-based ores are heated in a furnace with charcoal. In a chemical process called reduction, the charcoal combines with oxygen in the ore, producing carbon dioxide, and leaving the metal in a close to pure state.

Smelting has been known about for 5,000 years. It was originally useful in making copper and tin, the constituents of bronze. But it was a long time before anyone used smelting to make iron in large quantities. The reason for this lies in iron's chemical and physical characteristics. The temperature required for a smelting reaction is related to the melting point of the metal. Iron melts at 1,530 degrees centigrade, much higher than the equivalent temperature for copper or tin. Also, removing impurities, resulting from the presence in the ore of extraneous substances such as assorted clays and minerals, is more difficult in the case of iron than for other metals.

A breakthrough was made around 1200 BCE, probably either in or close to Mesopotamia – the name then for the region loosely centred on modern Iraq. Methods were devised to keep furnaces hot enough – probably at about 1,200 degrees centigrade – to make the iron smelting process work. Furthermore, better processes were developed for separating out the impurities – called 'slag' – through pounding with a hammer. The developments were quickly replicated in many areas around the eastern Mediterranean. As iron became easier to make, more of it became available. This led to its price falling, by about 97 per cent in the 400 years to 1000 BCE.

Steel was discovered at around the same time. It is a 'Goldilocks' material – the amount of carbon and other elements in the mix for a specific use has to be neither too much, nor too little, but just right. It was found that iron mixed with too little carbon gave a material that was quite soft, but could be shaped fairly easily. If the carbon concentration was too high, the metal was harder but brittle. In current terminology, iron with a small proportion of carbon (below 0.5 per cent) is called wrought iron. When the amount of carbon is fairly high (above about 1.5 per cent), the result is pig (or cast) iron. Steel is not a single alloy but a range of variants on iron, with properties dependent on its chemistry. In steelworks today, adding small, specified quantities of elements such as vanadium, chromium and nickel is very important. Such switches in composition change the properties of the steel, for instance making it more corrosion-resistant, or better at conducting electricity. The period that started in around 1200 BCE is called the Iron Age. Historians generally regard it as having run its course after about 1,300 years. In truth, however, the Iron Age has never really ended.

In early times, to define the composition of steel accurately was close to impossible. For all aspects of iron- and steel-making, progress was slow and empirical. However, for more than 1,000 years, one country – China – stood out as the leader in steel-making. China was well ahead in producing so-called blast furnaces – which employed bellows to blow in the air needed for smelting, using pistons driven by water power. The country knew how to build blast furnaces as early as 200 BCE, or 1,600 years ahead of Europe. For most of the Middle Ages, China's iron production was well ahead of Europe's, both in total output and on a per capita basis. But by the late seventeenth century, Britain was emerging as the place where the key events in iron- and steel-making would occur.

Forging ahead

At the centre of the changes was Sheffield, a city in northern England. It had the benefit of proximity to three sets of natural resources. The hills of the Pennines provided convenient sources of iron ore. The River Don flowing through the city provided a source of water power for blast furnaces. The city was also adjacent to large coalfields. Coal had by now replaced charcoal as the vital reducing agent for smelting.

Benjamin Huntsman was a locksmith and clockmaker, originally from Doncaster, who moved to Handsworth, a village near Sheffield, in 1740. He was initially less interested in making iron and steel than in using it in his products. But after becoming dissatisfied with the quality of the steel then available, he decided to try to find a new way to make the metal. Huntsman tackled the two critical issues that had confronted the iron-makers of Mesopotamia: increasing the temperature, and influencing the composition of an iron/carbon/slag mix.

Huntsman's advance was built around the design of special clay pots or crucibles capable of being heated to about 1,600 degrees centigrade without cracking or losing shape. A hot iron/carbon mixture, from a blast furnace, was poured into the crucible, together with small amounts of other materials – including some fragments of good-quality so-called blister steel. Impurities could be drained out through holes in the base of the crucible. The rate at which different substances were added or removed controlled the rate of formation of steel, and also its properties. Huntsman started using this 'crucible process' in about 1742. There were some drawbacks. The technology made steel in small quantities, suitable for such items as tools, cutlery and components for watches and clocks. It was a 'secondary' process: it relied on some small amounts of previously made blister steel if it was to work. Yet the procedure was repeatable: it followed a prescribed route that could be operated many times. Huntsman's was one of the first such techniques used in any industry. Even though it took more than a century for anyone to effect a real improvement on Huntsman's ideas by combining product quality with high speed, the technique pointed the way forward.

Huntsman's advance came when Britain had only a small share of world manufacturing. In 1750, the leader in global manufacturing was China, responsible for a third of output, followed by India, with a quarter. The leading country in Europe was Russia, with 5 per cent of the world total, followed by France. The share for Britain and Ireland of 1.9 per cent resulted in a lowly tenth position in the league table. But change was on the way. In 1769, the Scottish engineer James Watt patented another 'big idea', not in materials but in providing power. Improving on earlier designs, Watt invented a steam engine, useful both for pumping water from mines and for driving machinery. The steam engine is now regarded as one of the best examples of a 'general purpose technology': a specific technology capable of extremely wide application, plus the ability to be improved on. The advent of Watt's engine fitted in with other key events that influenced industrial progress. 'About 1760, a wave of gadgets swept over England' was how one historian described the changes. The manufacturing-related 'gadgets' included new machines for use in textiles and metals production. Meanwhile, the advances in technology coincided with other changes more connected to society and economics. They included the first efforts to organize factories on a large scale; an increasing population, which was also healthier and better educated; the opening up of world trade; and the birth of joint stock companies that helped to encourage entrepreneurship.

As a result of these changes, between 1700 and 1890 the proportion of the British workforce employed in industry rose from 22 per cent to 43 per cent, while the comparable figure for agriculture declined from 56 per cent to 16 per cent. In Britain and Ireland, manufacturing output per person rose eightfold between 1750 and 1860, four times as much as in France and Germany, and six times as much as in Italy and Russia. In China and India, manufacturing output per person fell. In 1800, Britain accounted for just over 4 per cent of world manufacturing production, making it the world's fourth biggest industrial power, behind China, India and Russia. But by 1860 it had become the largest in manufacturing output, accounting for almost 20 per cent of the world total, just ahead of China. The United States was in third place, with nearly 15 per cent.

In Britain, manufacturing became part of the language. The word is derived from the Latin manus meaning 'hand', and facio, meaning 'to do'. While it was first recorded in around 1560, its use was rare. Shakespeare, who died in 1616, used neither 'manufacturing' nor 'factory' in any of his plays. But from around 1800 the word became commonplace. The seven decades of change from roughly 1780 to 1850 added up to the first age of manufacturing organized on a large scale, and was concentrated in Britain. It came to be known as the first industrial revolution, usually called the Industrial Revolution. Of all the events that shaped the world in the final 500 years of the second millennium, the Industrial Revolution was the most important.

Bridges to the future

Charles Babbage was a child of this period of change. Born in London in 1791, Babbage spent much of his childhood in Totnes, a small town in Devon. After studying mathematics at Cambridge University, he became a fellow of the Royal Society at the age of 24. In a paper in 1822, Babbage described a calculating machine called a difference engine. The design of the machine involved several mechanical columns that could each move a series of wheels. Through a system of levers and gears, the wheels and columns could be manipulated so as to perform calculations. Babbage tried to build a working version of the machine but such was its complexity that he found the task beyond him. Undaunted, he began the development of an even more advanced calculating machine that he called the analytical engine. Since the analytical engine was intended to be a 'universal computing device', capable of performing an extremely wide range of tasks depending on how it was programmed, the machine is often considered the forerunner of the modern computer. But like the difference engine, the analytical engine was not built in Babbage's lifetime. Both machines were too complicated for the engineering capabilities of the day. Babbage also found time to write one of the first treatises on manufacturing. In On the Economy of Machinery and Manufactures, published in 1832, he commented that behind every successful manufactured item was 'a series of failures, which have gradually led the way to excellence'.

Sir Henry Bessemer would have agreed with this observation. But due to his greater practical skills, Bessemer was more likely than Babbage to make a success of theoretical ideas, by getting the engineering right. Born in a village near London in 1813, Bessemer followed the career of an inventor, working on novel printing systems, fraud-proof dies for stamping government documents, and processes to make high-value velvet for the textiles industry. He wrote of his approach: 'I had no fixed ideas, derived from long-established practice, to control and bias my mind, and did not suffer from the general belief that whatever is, is right.'

Bessemer's biggest challenge came in the 1850s, the time of the Crimean War. He had been encouraged by Napoleon III, an ally of Britain at the time, to work on new types of cannon. Military engineers had found they could control the trajectory of shells more easily by 'spinning' them in the barrels of guns. But the spiralling motion of the projectiles added extra stresses, which were likely to make the gun shatter as it was fired. Iron needed replacing with a higher-strength material. Steel was the obvious choice. However, if it was to be used, Bessemer realized he would have to find an improved method of manufacturing the metal.

Since Huntsman's day, Britain had become the world leader in steelmaking. Out of the 70,000 tonnes made in 1850, Britain was responsible for 70 per cent, with Sheffield alone making half the global total. Most of this steel was produced by a laborious process called 'puddling' – invented in 1768 by Henry Cort, a Hampshire ironmonger. This involved converting pig iron into wrought iron by removing carbon from a hot mix of metal, carbon and various impurities. It required a skilled, and strong, worker who had to continually stir the mixture with a metal rod. Then more carbon had to be added in the form of charcoal to create the correct form of steel alloy. Puddling was in a sense a side-step from the Huntsman technique. It was a way to make steel in larger quantities than the crucible method – albeit no more than about 30 kilograms at a time – but it had many shortcomings. As Bessemer wrote in his autobiography, 'at that date [the early 1850s] there was no steel suitable for structural purposes [capable of being made into large sections] ... The process was long and costly.'

Bessemer set out to make steel from pig iron in a single step. He did this by blowing cool air into the molten pig iron. The oxygen in the air mopped up some (but not all) of the carbon atoms present in the pig iron, by converting them into carbon dioxide, leaving behind steel. Because the reaction produced heat, the temperature rose as more air was blown in, so adding to the efficiency of the process. In 1856, Bessemer published the details in a paper given to the British Association. The new process used 'powerful machinery whereby a great deal of labour will be saved, and the [steelmaking] process [will] be greatly expedited'. He added that the Bessemer process would bring about a 'perfect revolution ... in every iron-making district in the world'.

In 1859, Bessemer chose Sheffield for the world's first steelworks based on 'converter' technology. The plant was a success. He licensed his ideas to metals entrepreneurs in both Britain and other countries. Bessemer's ideas were also improved on. The Siemens-Martin 'open hearth' process, introduced in 1865, led to closer control of the steel-making reactions, leading to a better-quality product. Andrew Carnegie, the Scottish-born US industrialist, was among those influenced by Bessemer's thinking. After emigrating to the US in 1848 when he was 13, Carnegie immediately gained work as a 'bobbin boy' – bringing raw material to the production line in a cotton works. After deciding to go into business for himself, Carnegie started manufacturing bridges, locomotives and rails, an activity that took him into steel-making. Having met Bessemer on a visit to England in 1868, Carnegie introduced Bessemer converter technology into the US soon afterwards. By 1899, his Pittsburgh-based Carnegie Steel was the biggest steel producer in the world, with an output in that year of 2.6 million tonnes. (Two years later, Carnegie sold his company to J. P. Morgan for $400 million, creating US Steel, and making him the world's richest person.) Because Bessemer's technology, aided by complementary advances, made it possible to produce steel more quickly and easily, its price fell by 86 per cent in the 40 years to 1900. In 1900, world output of steel was 28.3 million tonnes, 400 times higher than half a century earlier.

Global manufacturing production expanded considerably faster in the final 20 years of the nineteenth century, when the benefits of cheap steel were being fully felt, than in earlier periods. World industrial output climbed 67 per cent between 1880 and 1900, as compared to 42 per cent in the two decades prior to this, and just 22 per cent in the 1830–60 period. One consequence of the rate of global expansion was that the UK lost its position as the world's leading manufacturer. By 1900, the US took over, with nearly 24 per cent of world output, compared to the UK with 18.5 per cent, and Germany with 13.2 per cent. Britain's role as the 'workshop of the world' had lasted for only 40 years. (By the end of the nineteenth century, the UK had also fallen from being the biggest steel-maker to number three, behind the US and Germany.)

Among the factors behind the wider economic changes, one of the most important was cheap steel. It made possible new and improved products, from cars and farm equipment to steel-framed buildings. Machinery made from steel enabled higher output of other products such as chemicals, textiles and paper. In a final effect, use of all these products boosted growth in other, non-manufacturing parts of the economy, such as retailing, travel, banking and agriculture. In this way, cheap steel acted as a 'growth catalyst' for the world economy.

(Continues...)



Excerpted from THE NEW INDUSTRIAL REVOLUTION by PETER MARSH Copyright © 2012 by Peter Marsh. Excerpted by permission of YALE UNIVERSITY PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

List of figures vi

Preface vii

1 The growth machine 1

2 The power of technology 21

3 The spice of life 42

4 Free association 64

5 Niche thinking 92

6 The environmental imperative 119

7 China rising 143

8 Crowd collusion 164

9 Future factories 188

10 The new industrial revolution 214

Notes 248

Bibliography 278

Index 295

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