As markets for manufactured goods increased both domestically and overseas, Britain was able to respond with increased production, largely because of its stable government, abundant natural resources, and flexible labor force. The first factories arose as a result of innovations in the textile industry. The demand for improvements in energy led to innovations and improvements in the steam engine, which transformed the iron industry, among others. In the early nineteenth century transportation of goods was greatly enhanced with the adoption of steam-powered trains and ships.

After 1815 continental European countries gradually built on England’s technical breakthroughs. Newly established corporate banks worked in conjunction with government interventions in finance and tariff controls to promote railroads and other industries. Beginning around 1850 Japan and the United States also began to rapidly industrialize, but generally the Industrial Revolution spread more slowly outside of Europe, as many countries were confined to producing agricultural goods and other raw materials to serve European markets.

The rise of modern industry had a profound impact on society, beginning in Britain in the late eighteenth century. Industrialization led to the growing size and wealth of the middle class and the rise of a modern industrial working class. Improvements in the standard of living came slowly, but they were substantial by 1850. Married women withdrew increasingly from wage work and concentrated on child care and household responsibilities. The era of industrialization also fostered new attitudes toward child labor, encouraged protective factory legislation, and called forth a new sense of class feeling and an assertive labor movement. Slave labor in European colonies contributed to the rise of the Industrial Revolution.