Causes of
Industrialization
Factors of Production
Factors of Production
•The elements that must
be present for a country
to be a successful
industrial nation
Factor/ Cause #1
• Natural Resources/ Raw Materials
–Water
–Timber
–Coal
–Oil
–Copper
• US had an abundance of raw materials
• Allowed us to obtain them cheaply
• Settlement of west helped accelerate
industrialization
• New resource, petroleum, was used for fuel
• In 1859, Edwin Drake drilled first oil well near
Titusville, PA
Factor/ Cause #2
• Entrepreneurs and Inventions
• Came up with new inventions
• Inventions helped increase
productivity and improved
transportation and communication
• Inventions led to new corporation
providing new jobs and wealth
Inventors
• Alexander Graham Bell and the Telephone
• Edison and Electricity
– Created research lab and held more than 1000 patents
when he died
– Edison electric powered NYC
– Several of his companies formed what is now GE
• George Westinghouse and Electricity
– Invented air brake system for railroads allowing trains
to travel faster
– His company was first to use hydroelectric power of
Niagara Falls to generate electricity for street cars
Factor/ Cause #3
•Capital –
–land
–Factories
– machines
– money
Factor/ Cause # 4
• Labor
–Large workforce fueled by immigration
and large families
–1860-1910 – population tripled in US
• Created greater demand for consumer
goods
Factor/ Cause # 5
• Transportation
– Streetcars, subways, automobiles
– Railroad
• Pacific Railway Act provided construction of
railroad by two companies
– Union Pacific pushed west from Nebraska
– Central Pacific pushed east with 10,000 workers
from China due to labor shortage in California
– After 4 years companies met at Promontory
Summit, Utah to complete transcontinental
railroad
Railway Significance
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•
•
•
•
Promoted trade
unite Americans in different regions
Provided jobs
sped up Western settlement
set up standard time to provide train
safety
• factories could send out product faster to
more people
Factor/ Cause # 6
• Markets
– Places to sell product
• Late 1800s - Free Enterprise Market
• Laissez- faire gov’t not interfere with economy
• Rely on supply and demand to regulate prices
and wages
• Supporters claimed free markets with
competing companies leads to greater
efficiency and creates more wealth for all
# 6 continued
• Gov’t Role during late 1800s
–High tariffs set to protect American
industry from foreign competition
• Problem: Europe raises their tariff
thus keeping us from selling our
goods there
–Subsidies to companies like railroad