Why Did Big Business Emerge During The Industrial Revolution

During the Industrial Revolution, which spanned from the late 18th century to the early 19th century, there was a significant increase in the scale and scope of industrial activity. This period marked a shift from agrarian and handicraft economies to industrialized, machine-based manufacturing. One of the most notable features of this era was the rise of big business, characterized by large-scale production, extensive infrastructure, and complex organizational structures. But why did big business emerge during the Industrial Revolution? Let’s explore the key factors that contributed to this phenomenon.

1. Technological Advancements

The Industrial Revolution was fueled by groundbreaking technological advancements that revolutionized the way goods were produced. Inventions such as the steam engine, mechanized textile production, and the development of iron and steel manufacturing processes significantly increased the efficiency and productivity of industries. These advancements allowed for mass production on a scale previously unimaginable, providing the foundation for the emergence of big business.

2. Access to Capital

As industrialization took hold, the need for substantial capital to fund large-scale operations became increasingly apparent. This led to the rise of financial institutions and investment opportunities that facilitated the accumulation of capital necessary for the establishment and expansion of big businesses. Additionally, the development of joint-stock companies and the emergence of stock markets provided avenues for raising substantial funds, enabling entrepreneurs to embark on ambitious industrial ventures.

3. Urbanization and Infrastructure Development

The Industrial Revolution spurred massive urbanization as people flocked to industrial centers in search of employment opportunities. In response to this influx of labor, infrastructure such as transportation networks, factories, and communication systems underwent significant expansion and modernization. The development of these essential components of industrial society laid the groundwork for the growth of big business, as it provided the necessary framework for large-scale production and distribution of goods.

4. Economies of Scale

Big businesses were able to achieve economies of scale, which refers to the cost advantages that arise from increased production efficiency. As larger quantities of goods were produced, the average cost of production per unit decreased, making it more cost-effective to operate on a massive scale. This allowed big businesses to outcompete smaller enterprises and solidify their dominance in various industries.

5. Specialization and Division of Labor

The Industrial Revolution saw the emergence of specialized production processes and the division of labor, where tasks were broken down into smaller, specialized components. This allowed for greater efficiency and productivity, as individuals became highly skilled in performing specific tasks. Big businesses were able to capitalize on this by implementing elaborate production systems and organizational structures that maximized output and minimized costs.

6. Global Trade and Expansion

The Industrial Revolution facilitated the expansion of global trade, as advancements in transportation and communication allowed for the movement of goods and information across vast distances. Big businesses took advantage of this interconnectedness to tap into international markets, expanding their reach and influence on a global scale. The pursuit of new markets and resources drove the growth of big business, as they sought to capitalize on the opportunities presented by the global economy.


The emergence of big business during the Industrial Revolution was the result of a confluence of factors, including technological advancements, access to capital, urbanization, economies of scale, specialization, and global trade. These factors collectively transformed the industrial landscape, paving the way for the rise of large-scale enterprises that would come to dominate various sectors of the economy. Understanding the drivers behind the emergence of big business during this transformative period in history provides valuable insights into the foundations of modern industrial and economic systems.

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