HIST363: Global Perspectives on Industrialization

The steam engine has still a central position in the economic history of the British industrial revolution. Today, it is generally recognized that traditional accounts of the industrialization process such as those of Rostow and Landes tended to conflate the economic significance of the steam engine with its early diffusion. In fact, the available shreds of evidence on the growth of steam power in the British economy in combination with data on the cost effectiveness of early steam engines indicate that steam power gave a only modest contribution to aggregate productivity growth until at least the 1830s.

However, it is important to stress that these revisionist accounts concern the timing of the economic effects of the diffusion of steam power technology and do not intend to question the fundamental role played by this technology for economic growth over the long-run. Thus, the views of Cipolla and Wrigley which regard steam power as a critical technological breakthrough that changed the energy budget of the British economy providing the opportunity for tapping into inorganic stocks of fossil fuels (coal) and thereby reaching a steeper growth trajectory (usually referred to as "modern economic growth") are not in principle in contrast with the findings of Crafts and von Tunzelmann. Recent developments in growth theory have actually pointed out a series of factors which can explain why the impact of a general purpose technology such as the steam engine on the rate of economic growth is going to be affected by long delays.

This cursory summary suggests that the broad contours of the relationship between the diffusion of steam power and economic growth have been probably successfully outlined. However, this concerns only the aggregate dimensions of the diffusion process. In fact, several contributions have actually argued that a proper understanding of the processes of economic change occurring during the British industrial revolution needs to be based on a regional perspective. These authors claim that industries exhibiting fast rates of output growth and extensive technical and organizational changes displayed a strong tendency towards regional concentration.¹ From these considerations, it is clear that, when accounting for the diffusion of a technology in this period, due attention must be paid to regional aspects.

Kanefsky and Kanefsky and Robey have assembled a comprehensive data-set on the adoption of steam power in Britain throughout the eighteenth century. On the basis of these data, they have provided a quantitative descriptive outline of the diffusion process. This paper serves a twofold purpose. The first aim is to expand on Kanefsky and Robey by providing a new quantitative characterization of the timing, the pace and the geographical extent of steam engine diffusion during the eighteenth century adopting a framework of inquiry based on the economics of technological diffusion. The second goal is to assess the factors influencing the adoption of steam engine technology in different locations. In particular, we want to test systematically the role played by the price of coal, which the studies of von Tunzelmann and Kanefsky have identified as the critical factor affecting steam engine usage. In this respect, it is worth noting that both the studies of von Tunzelmann and Kanefsky were based on estimates of the cost effectiveness of "representative" Newcomen and Watt engines at different level coal prices integrated by some anecdotal evidence, but they did not investigate systematically the existence of an actual correlation between coal prices and the number of engines installed at regional level.²

The rest of the paper is organised as follows. In the next section we present a brief overview of the development of the steam power technology in the course of the eighteenth century. Clearly the aim of this section is to provide the necessary background (from the history of technology point of veiw) to our diffusion study. In Sect. 3, we provide a broad outline of the geographical diffusion patterns of Newcomen and Watt engines. Section 4 examines the timing and pace of steam engine diffusion at the level of individual counties. In Sect. 5, by estimating "adoption equations" of various types of steam engines by county, we assess the relative role of a number of specific location factors. In the same section, we also attempt to interpret the results of our econometric analysis against the background of the existing historical accounts of the emergence of steam power technology. Section 6 draws conclusions.