In the late 19th century Great Britain was still one of the world's leading and growing economies. The Great British economy was mature with a relatively small agricultural sector and a large service sector. However, historians have often debated the reason as to why such an advanced economy was steadily losing market share to countries such as Germany and USA. The question is significant because we would assume that Great Britain would adopt similar and maybe even more advanced industrial techniques than Germany and USA keeping its lead, but it did not.
I will argue that the reason for Britain's relatively slow industrial growth between 1870 and 1914 can be partly blamed on the failings of entrepreneurs. Yet entrepreneurs are not the main reason for slow industrial growth in this time period. The financiers at the time must also be held accountable, but more importantly the problem is "due to the structure of industrial organization" (Lazonick, 1981). To demonstrate this I will pay particular attention to the yarn industry since textiles was Britain's biggest export at the time.
One of the main problems highlighted with entrepreneurs was that they were slow to innovate and adopt new technologies and industrial techniques. Without the necessary increase in productivity it was inevitable that Britain would face relatively slow industrial growth in comparison to Germany and USA.
[...] To what extent can Britain's relatively slow industrial growth between 1870 and 1914 be blamed on the failings of entrepreneurs? In the late 19th century Great Britain was still one of the world's leading and growing economies. The Great British economy was mature with a relatively small agricultural sector and a large service sector. However, historians have often debated the reason as to why such an advanced economy was steadily losing market share to countries such as Germany and USA. [...]
[...] Hence it becomes apparent that Britain's relatively slow industrial growth between 1870 and 1914 can only partly be blamed on the failings of entrepreneurs. More importantly was the general structure of British industry constraining entrepreneurs. Many of the problems that entrepreneurs faced such as education, innovation, unions, transportation costs, the location of export markets and even some of the financial issues were mainly as a result of external forces and were not always by their own creation. Looking at why Britain faced relatively slow growth in this period is particularly important today. [...]
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