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Home , Interchangeable parts, Invention, Mass Production, Production line, Samuel Slater

Technology and , Vol. 18, pp. 257-265, 2017 ISSN 1949-8241 • E-ISSN 1949-825X Printed in the USA. All rights reserved. http://dx.doi.org/10.21300/18.4.2017.257 Copyright © 2017 National Academy of Inventors. www.technologyandinnovation.org

INVENTION, INNOVATION SYSTEMS, AND THE FOURTH

Arthur Daemmrich

Lemelson Center for the Study of and Innovation, Smithsonian Institution, Washington, DC, USA

This article reviews the interplay of major and changes to innovation systems during three historical industrial revolutions as the basis for understanding whether a new era is underway at present. The periods start with widespread use of steam power and using from the 1850s onwards; , synthetic materials, and beginning in 1900; digital computing and electronic starting in the 1960s; and a potentially emerging fourth revolution of arti- ficial intelligence and distributed small-scale manufacturing. Specific inventions, changes to national innovation systems, shifts in workplaces and the organization of labor, and evolving styles of consumption are considered for each of the discrete industrial eras. The article con- cludes with lessons about spillovers from innovation that underpin industrial revolutions and offers perspective on contemporary debates concerning the rate of change. It also suggests that organizational and institutional structures that support inventors and ensure returns to corporate innovation in the will need to adjust if a fourth industrial revolution has begun.

Key words: Invention; Industrial revolution; Innovation system; Labor; Consumption

INTRODUCTION arising from new methods of producing and shipping A fourth industrial revolution has started accord- goods or for generating and transmitting information ing to recent essays by technology entrepreneurs, (3). Industrial revolutions are profound because they policy reports issued by the World Economic Forum, are periods in which key lead to new and organizers of numerous high-profile conferences ways of doing things, not just efficiencies or increased (1,2). Defining and dating industrial revolutions— production at lower prices. More recently, a debate periods during which technology, manufacturing, and emerged in the 1990s about the significance of rela- change rapidly and in synchronicity— tionships among , technology, and industry for can be contentious among historians of technology, industrial revolutions and the sometimes awkward fit business, and . Yet, ever since Joseph of the chemical and pharmaceutical industries with Schumpeter’s groundbreaking Business Cycles was traditional divisions of steam power as the source of published in 1939, historians, economists, and others the first, as core to the second, and com- have delineated epochs to explain systemic changes puting and communications as the foundation of ______

Accepted November 30, 2016. Address correspondence to Arthur Daemmrich, Director, Lemelson Center for the Study of Invention and Innovation Smithsonian (NMAH), Lemelson Center, MRC 604, P.O. Box 37012, Washington, DC, 20013-7012, USA. Tel: +1 (202) 633-6396; E-mail: daemmricha@ si.edu

257 258 DAEMMRICH a third industrial revolution (4,5). Other historical foretells rising , longer lifespans, and even studies have contested the very existence of industrial a transhuman merging of people with computers revolutions, with some scholars arguing instead for (8,9). Other forecasters, including Sun Microsystems gradualist or evolutionary interpretations (6,7). founder Bill Joy, warn that a near-term future dom- Rather than being only gradual or always revo- inated by artificial intelligence has no place for or lutionary and accelerating, this article suggests that need of humans (10). Historical perspective from past change over time exhibits features of punctuated periods of rapid and profound change suggests that equilibrium. Sometimes technology and social sys- even revolutionary innovation in technology does not tems undergo incremental adjustments, but at other eliminate or make humans unnecessary (11). Of historical periods, which can last for three or four equal importance, and largely missed by proponents decades, rapid and profound changes occur. Each of a fourth industrial revolution, technology does not of the industrial revolutions analyzed here involved change through its own agency. Revolutionary peri- changes in widely used , innovation ods inevitably bring significant changes to work and systems (ways of organizing and financing innova- consumption as methods and means of production tion), the organization of labor (places and ways of are transformed. However, these changes emerge working), and methods and means of consumption. through a dynamic push and pull relationship among These four aspects only rarely change rapidly together. inventors, business entrepreneurs, and consumers, When they do, the impacts are significant, conse- and not from human adaptation to the imperatives quential, and ultimately global in scope. of new technology. This article describes the key components of three widely recognized industrial revolutions in the United THE AMERICAN INDUSTRIAL REVOLUTION States and offers an initial assessment of whether a Originating in England toward the end of the 18th fourth is underway. The first industrial revolution century, the first industrial revolution took hold in began in Britain with the introduction of steam the United States starting in the mid-19th power; of agriculture, manufactur- century. In ing, and transportation; and shifts to work. It his magisterial study of the United Kingdom, Paul manifested later in the United States with the inven- Mantoux defined it succinctly: “The industrial revo- tion of precision tooling and interchangeable parts. lution consists in the invention and use of processes The second industrial revolution originated in the which make it possible to speed up and constantly to United States with the electrification of the country, increase production” (12). Mantoux and subsequent scaling of mass-production via assembly lines, and the historians analyzed the first industrial revolution as invention and mass production of synthetic more than a one-time change in technology or as and other new materials. The third industrial revo- resulting inexorably from innovations in steam power. lution also began in the United States thanks to the Instead, they argued that the industrial revolution invention of semiconductors, widespread adoption of involved the emergence of a completely new approach computers, and new systems for information storage to production, work, and consumption, a process and processing. A fourth industrial revolution may be that took over a century to fully unfold in England. about to begin thanks to a convergence of advances People moved from rural villages to urban centers as in artificial intelligence, reduced barriers to entrepre- work was centralized in . Consumption also neurship, and the spread of technologies that enable shifted, as goods increasingly were produced not just rapid prototyping and niche market sales. In each of for royal families, but also for a broader, albeit still these revolutionary periods, new inventions and new exclusive, capitalist class. approaches to organizing innovation led to anxieties Entrepreneurs in the United States rapidly bor- about the deskilling of labor and fears of disruptions rowed new ways of generating and using energy from to existing political and social order. England, and trained craftsmen, such as , The present historical moment is characterized by a brought knowledge of new and weaving prac- high degree of anxiety around technology change and tices to North America (13). A transformative and disruptive innovation. To technological utopians, a revolutionary moment came for the United States convergence of computing power and bioengineering with the invention of precision milling, first for guns INVENTION AND THE 4TH INDUSTRIAL REVOLUTION 259 and soon thereafter for bicycles, sewing , and other components and to demonstrate the supe- and other consumer goods. Pioneered at the Harper’s riority of their materials (19). From the bespoke Ferry Armory in West Virginia, lathes designed for manufacture of goods for royal families and wealthy greater precision and built to follow repeated pat- merchants in Europe in the 16th and 17th centuries, terns for making metal parts ushered in a specifically the industrial revolution had made it possible by 1900 American contribution to the long wave of the first for an emerging middle class to own a household full industrial revolution (14). The resulting “uniformity of consumer products and to travel by themselves to principle” of interchangeable parts made it possible to neighboring towns, setting the stage for tremendous hire fewer skilled laborers for factory work, a critical demand for the automobile. factor in light of mid- labor shortages in the United States. Craftsmen at Harpers Ferry ELECTRIFICATION AND MASS PRODUCTION consequently spurned the new technology, viewing A second industrial revolution took hold firmly it as a threat. Yet, it soon caught on elsewhere, start- in the 1910s as American cities installed electrical ing with the Springfield Armory in , systems, opened the first continuously which developed systems and controls that made the moving , and synthetic chemicals new technology efficient and manageable (15). Other entered mass production. While Edison had demon- transfers and spillovers followed; for example, the strated power distribution from the famous Pearl machinist Christian Sharps brought skills learned at Street Station in New York City in 1882, it took addi- Harpers Ferry to the Colt factory in Hartford, Con- tional advances in generation and distribution via necticut, and then started making sewing machines. alternating current to make the system viable. Yet, by Other entrepreneurs built bicycles, household appli- 1930, over 70 percent of American households had ances, typewriters, and early automobiles using the electricity, and a wave of new consumer products same core approach (16,17). had entered people’s lives (20). Drawing on consis- The innovation system underlying the American tent electrical power and building on the concept of industrial revolution relied on individual inventors, system-builders for and rail, and ready access rapid production enabled by precision machinery and to speculative capital. U.S. government demand for interchangeable parts in the first industrial revolution, weapons produced to uniform standards was key to Ford’s played a significant role in an the initial innovations underpinning interchangeable exponential increase in manufacturing output. Other parts, but their spillover to other areas happened factories sprang up around the country to supply largely through individual or the vacuum cleaners, kitchen appliances, and thousands hiring of skilled machinists by competitors. Neither of other new “conveniences” that quickly came to be corporations, nor universities, nor the federal gov- seen as essential to modern life (21). Many of these ernment were engaged in systematic and sustained were made using new materials, starting with Bake- research as would emerge in the . How- lite’s commercial production in 1910, then polyvinyl ever, a thirty-year period beginning with the end of chloride (PVC) in 1920, neoprene in 1930, and nylon the Civil War did witness a remarkable growth of in the mid-1940s. patenting (18). An age of invention was underway, Like the first industrial revolution, the second also growing from some 6,099 issued in 1865 to involved major reconfigurations of the extraction over 24,000 in 1900. and use of natural resources and remarkable shifts Alongside advances in manufacturing and indus- in people’s daily lives within a single generation. To trial production, the first industrial revolution in the generate and transmit electricity across the vastness United States also saw mass-market demand and of the United States, huge power stations were built, consumption bubbles. For example, in 1887, some 300 with concurrent demand for and natural gas manufacturers produced over one million bicycles in production. As Ford’s assembly line reduced the time the United States. Bicycle manufacturers developed required to make one Model T from 12.5 hours to new promotional techniques, including sponsoring 93 minutes within the first year, a rigorous regime racing teams and obtaining celebrity endorsements, of work oversight was put in place, extending to and invested in research to create new hubs, wheels, managing the timing of the arrival and processing 260 DAEMMRICH of parts. In turn, Ford’s system all but demanded a operations (29,30) Governments worldwide actively vertically integrated firm that could ensure timely sought to promote national models of innovation, procurement of raw materials not just domestically including creating both policies to advance domestic but from overseas as well. By the time the Model T firms and barriers to protect natural resources and was discontinued in 1927, its price had fallen below other sources of competitive advantage (31). $300, and the company could produce one every 24 Even as the United States became a global seconds (22). Across numerous industrial sectors, industrial powerhouse, and the public was told by a large domestic market and new uses for natural conglomerates to “conform,” Americans forged a new resources of oil, gas, and ore underpinned large- consumer identity and began to demand broader scale, continuous flow manufacturing (23). choices. Innovations in the retail sector, including Daily production schedules featured scheduling catalog-based shopping, reached people across the systems that dictated use of different tools country and began to distinguish among narrower and forced employees to produce the same items by demographic price points (32). A distinctive con- the same process in the same unit of time (24). The sumption style emerged based on discretionary second industrial revolution thus led to new demands income, a need to “keep up with the Joneses,” along on the government to provide roads and other infra- with distinctive socio-economic markers based on structure. At the same time, unions expanded to clothing, , and other specific tiers of household represent the millions of workers engaged in fac- purchases (33). While the consumer economy gener- tory employment. Total employment shifted toward ated market pull for greater diversity, manufacturers manufacturing; thus, in 1916, on the eve of the United were strongly influenced by then-progressive notions States entering World War I, one-third of Americans of efficiency, , and simplification worked in agriculture, one-third in manufacturing, advanced by industrial Frederick Taylor and one-third held technical, clerical, service, and and home economist Lillian Gilbreth (34). other professional jobs. During this second industrial revolution, a distinc- INFORMATION TECHNOLOGY tive innovation system emerged as corporations began to invest systematically in research and new product A third industrial revolution, which has mani- development. Between 1900 and 1931, over 1,600 fested largely as an information revolution, began to companies established industrial research laboratories take form in the 1960s as semiconductor technology in the United States (25). Firms would no longer be underwent an exponential inversion of comput- dependent on outside sources for new technology, and ing speed relative to cost. With the introduction they came to see innovation in materials, products, of personal computers in the late 1970s, the third and eventually services as fundamental to their ability revolution spread as firms and consumers began to to compete with peers (26). In the same timeframe, innovate new uses for computing technology. Under university-based and at technical the imperative of Moore’s Law—a doubling of the colleges found new opportunities for collaborations number of transistors on integrated circuits every and consulting that connected their laboratory work eighteen months—the price of calculations and data to applications in industrial settings (27). Yet, a clear sharing declined precipitously to the point where hierarchy of knowledge and behaviors tended to dom- any additional calculation or data processing step inate most thinking and writing about invention and was essentially free (35). Digital technology spread the innovation system, exemplified concisely in the to countless devices in factories, offices, and house- motto of the 1933 Chicago world’s fair: “Science finds, holds, with particularly significant scale impacts for industry applies, man conforms” (28). Innovation was automated manufacturing, data storage and retrieval, organized around a linear pipeline from basic research and entertainment media creation and distribution. to industrial or business application to consumer In 1970, office work was done by clerks using elec- acceptance (whether or not by choice, as signaled by tric typewriters with limited ability to cut-and-paste “man conforms”). Although independent inventors text, and calculations in fields like or continued to work and sometimes thrive, they were accounting involved work by hand on electronic cal- increasingly marginal relative to industrial research culators. Within thirty years, every workplace used INVENTION AND THE 4TH INDUSTRIAL REVOLUTION 261 -linked computers, had access to vast pools of Overall, employment in the United States under- information via the internet, and employed compu- went a steady change toward office work, retail, and a tation taking considerably less time than data entry. diverse mix of services. At the start of the information Aligned to information imperatives of the third technology era in the late 1960s, some 30 percent of industrial revolution, the innovation system shifted to Americans worked in manufacturing and 15 per- greater collaboration across government, university, cent in agriculture, while 55 percent of the employed and corporate research labs. Starting in the 1980s, worked in professional and service positions. By 2015, universities could discoveries and inventions fewer than 9 percent of Americans worked in man- even when supported by federal funds, sparking a race ufacturing and less than 2 percent in agriculture. to make priority claims. Contrary to predictions for Consumption patterns shifted gradually but inex- intensified disputes over intellectual , new orably toward services in the United States and other models of open innovation emerged that fostered developed economies as the cost of , clothing, greater exchanges and collaborations (36). At the and household goods held constant or even dropped same time, previously “wet” laboratory research in in real terms. Unlike the first two industrial revolu- chemistry and biology increasingly shifted to work on tions, the third did not feature a significant change in models and simulations using computational meth- transportation, although air travel became far more ods (37). Multinational firms seeking to invent new accessible as a leisure purchase. Notably, advances in medicines or innovate in chemistry, , communications technology and the ability to convert or myriad other fields began to manage research music, movies, and other goods into digital formats teams on two or three continents that shared dig- aligned to significant increases in media purchases. ital files with test results or tweaks to models. Even By contrast, healthcare services saw fewer transforma- as countries competed with national research and tive changes and next to no price efficiencies related development (R&D) investments, successful innova- to advances in information technology. As a result, tion began to involve collaborations across national consumer spending on pharmaceuticals, hospital borders (38). care, and pet care outpaced other areas (39). In some domains, independent inventors had great success in the third industrial revolution. For exam- A FOURTH INDUSTRIAL REVOLUTION? ple, few of the people who coded the first generation of video games in the 1960s and 1970s or the first apps A recent wave of essays, books, and techno-opti- for cell phones and digital tablets in the 2000s worked mistic TED talks has coalesced around the concept for large companies. Inventors of toys, games, kitchen that a fourth industrial revolution is underway. gadgets, and myriad household goods also were able According to leading proponents, three key features to use technologies of the third industrial revolution will characterize this next phase. First, the fourth to their benefit. Yet, the scale of work necessary to industrial revolution will see lower barriers between bring many inventions to market—including proto- inventors and markets thanks to and typing, product safety testing, and manufacturing at other new technologies for prototyping (40). Costs low cost—meant changes for technology inventors for people with new ideas to create small companies as the third industrial revolution progressed. They will drop further, reducing barriers to start-up for- could patent but then typically licensed or sold their mation. In addition, products can prosper based on ideas to firms able to manufacture and market goods niche markets thanks to the emergence of “long tail” using global supply chains. Looking at patent data, strategies under which firms like Amazon stock and the percentage of all patents issued by the U.S. sell inventories massively larger than any physical Patent and Trademark Office the United States that store (41). were held by individual inventors, and not assigned Second, forecasters are predicting a far more active to a corporation or university, declined gradually role for artificial intelligence (AI) and robotics in from 15 percent in 1998 to just over 6 percent in coming years. Artificial systems that rationally solve 2015. The information technology age has not been complex problems or take actions to achieve goals characterized by a large number of successful inde- in a diverse set of real world circumstances pose a pendent inventors. threat to many kinds of employment but also offer 262 DAEMMRICH new avenues to and will create than sometimes portrayed. Across the industrialized new types of work that are difficult to predict (42). world, policies to retrain workers for large-scale tech- For example, driverless cars may modestly displace nology and economic change have had mixed results taxi and Uber drivers, but autonomous trucks would (49). In each of the revolutionary periods described potentially radically transform shipping with far fewer here, technology breakthroughs and new ways of jobs for truck drivers, but more positions in logistics organizing production saw some degree of automa- and planning. In other cases, a mix of professional tion of work previously done by humans. Overall barriers, skills impossible to fully automate, and reg- employment, however, was not destroyed; instead, ulations will lead to AI serving in advisory capacities total employment grew considerably in each period, for skilled professions, such as doctors and surgeons, including as women were brought into formal work- and as colleagues for many kinds of office work (43). places. Similarly, neither a dystopian future of mass Third, innovation systems in the fourth industrial nor a utopian life of pure leisure and revolution will integrate across different scientific and artistic expression are likely under a fourth industrial technical disciplines and incorporate other domains revolution. such as education rather than looking to hand off Nevertheless, a fourth industrial revolution also findings from one area to the next. Innovation will will involve changes to consumption behavior and to be supported through crowdsourcing of funds rather the ways in which people forge individual and group than exclusively government or corporate R&D fund- identities to make sense of their changing world. ing (44). Perhaps most significantly, these key forces Consumption is shifting at present, notably with the will come together in a “fusion of technologies that is growth of spending on travel, concerts, sports, and blurring the lines between the physical, digital, and other events in contrast to goods or services (50). biological spheres,” as suggested by the economist and Consulting reports now point to the need for firms founder of the World Economic Forum, Klaus Schwab to create “experiential value” for customers, and both (45). McKinsey Consulting’s in-house think-tank the young (millennial generation) and growing ranks similarly has reported that a convergence of forces is of the retired value experiences above goods (51). leading to changes “happening ten times faster and Individual and group identity are likewise evolv- at 300 times the scale, or roughly 3,000 times the ing to focus on a variety of hubs and activity-based impact” of the first industrial revolution (46). centers—whether for start-up businesses, social Yet, some critics have also noted that the third entrepreneurship, or other forums for interaction— industrial revolution was already limited in its effects that differ from the commercial and governmental on people’s lives compared to the second or first, locations that dominated the first three revolutionary which more radically transformed households, ways periods. of working, transportation, , and consumption. Analyzing productivity growth rates CONCLUSION since the mid-19th century, the economist Robert Gordon has argued that the was Reviewing the three major industrial revolutions more limited than is widely believed and that no that first brought the United States into a position technology-driven revolution is on the horizon that of technological and economic leadership is reveal- will impact the public more generally (47). Similarly, ing on several fronts. First, a roughly 30-year time social critic Jeremy Rifkin has argued, “the Third period of especially intensive change characterized Industrial Revolution—the digital revolution—has each of the past industrial revolutions. Precision mill- yet to reach its vast potential, making it far too early ing and interchangeable parts were diffusing by the to declare it over and done” (48). mid-1850s, and their impact on the production of Looking across the first three industrial revolutions guns, bicycles, sewing machines, and other equip- identified here, it is striking that employment can ment unfolded through the mid-1880s. Likewise, change in a single generation (from farms to facto- electrification of the United States and impacts of the ries, and then from factories to knowledge work), Ford assembly line and industrial chemistry spread but within any one period, change is more gradual across a time period roughly occurring between 1910 INVENTION AND THE 4TH INDUSTRIAL REVOLUTION 263 and 1940. The information technology revolution is ACKNOWLEDGMENTS associated with a concentrated wave of innovations The author gratefully acknowledges comments that had profound impacts between the mid-1970s from Art Molella and two anonymous reviewers on and mid-2000s. On that basis alone, the time for a a previous version of this article. fourth revolution may be nearing though it would be flawed to treat periods of industrial and technological REFERENCES change as laws of nature. 1. Rose G. The fourth industrial revolution: a Davos Second, major applications of breakthrough tech- reader. Washington (DC): Council on Foreign nologies typically emerge only after a technology has Relations; 2016. been put into use and then undergoes a sequential 2. Schwab K. The fourth industrial revolution. process of refinement and tweaking. New products Geneva (Switzerland): World Economic Forum, can take time to develop uses. For example, bicycles 2016. were used by a narrow niche of riders until inno- 3. 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