What we can learn from the Industrial Revolution about managing disruption

Technology is driving the way in which we are shaping our cities. But while the technology progresses at warp speed, regulators, consumers and businesses are still scratching their heads about how to harness that technology for good. Concerns about technological progress are not isolated to job loss, but greater issues exist around data collection, privacy and protection of human rights.

So while bracing ourselves for the Data Revolution, what can we learn from history about how to best manage economic disruption and, more importantly, how do we ensure positive outcomes for the people impacted by it?

The first Industrial Revolution, which lastly from roughly 1760 to 1850, was about the introduction of machines, often powered with water or steam. The second Industrial Revolution (roughly 1850 to 1910) used more advanced technologies, such as electricity and the internal combustion engine.

While the Industrial Revolution ultimately led to big increases in wealth, progress was unsteady, and for much of the period, the average person was not reaping the benefits of economic change. Historians agree that the industrial revolution was one of the most important events in history but they disagree vehemently about many aspects of the event, predominantly, how the industrial revolution affected ordinary people.

The Industrial Revolution led to big increases in wealth but the average person was not reaping the benefits 

What historians will most commonly look to, in measuring that impact, is the ‘standard of living’. For some, this refers to people’s overall happiness – something which is impossible to measure – but more often real wages or real income that can equate the standard of living with monetary measures are considered. The problem with ‘real income’ is that it only considers money income adjusted for the cost of living, but not for effects of things such as health, longevity, unemployment, pollution, the condition of women and children, urban crowding, or the amount of leisure time. Other measures are therefore considered.

Biological measures, such as people’s height are useful measures. Height can indicates how well someone is nourished, and people who do less manual labour or who are less afflicted by disease, are likely to be taller. Interestingly, however, during the first Industrial Revolution, research shows that the height of English soldiers from 1730 to 1850 declined. But why? Some people believe it was due to the explosion of diseases in cities. Others think that unsteady economic growth led to increases in the frequency of unemployment, which then affected nutrition. Agricultural growth may have also lagged behind economic growth, which meant that the relative price of nutrients increased.

Rapid economic change can have mixed effects for people

Needless to say, rapid economic change can have mixed effects for people. The Industrial Revolution marked dramatically changed every aspect of human life and lifestyles. From human development, health and life longevity, public health, sanitation, social improvements, and energy usage to the impact on natural resources, the effects were profound. However, the full the impact on the world’s psyche would not begin to register until the 1960s, some 200 years after its beginnings. So the standard-of-living debate seems to less about whether the industrial revolution made people better off, but rather about when that happened. While we now have very advanced ways of measuring quality of life, sophisticated, quantitative measurements alone do not capture the experience of living through rapid change.

Economic history is not just about hard economics but also about how people experience economic change. And as we look to the future, and the way in which technology is changing our lives, it is the people who use that technology that should be at the forefront of how we manage change and ensure positive outcomes for those impacted by it – right now and in another 200 years.

Economic history is not just about hard economics but also about how people experience economic change.


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