The genre of novel superceded the Romances, Chants, and the Epic stories of the 17th century by replacing the themes from historical realistic fiction, historical non-fiction, and chivalry romances with more fictional story lines that had not been seen before in English literacy.
The first novel accepted by theme and form would definitely be Robinson Crusoe as you stated. Previous to Crusoe, two more novels had been published but it was Crusoe which obtain the attention and the girth of importance that would be characteristic of the modernistic novel: One that comes with a fictional thematic narrative, detached from historical non-fiction, and categorized by ease of use.
Industrial Capitalism, Individualism and the Rise of the Novel
1-The rise of the novel during the eighteenth century is greatly associated with the rise of individualism at that time.
2- Individualism stressed the fact that every individual was independent from other individuals, and as a direct result of industrial capitalism, it emphasized that the individual had to choose and decide his future. Modern industrial capitalism, also, taught people how to earn money ,and how increase it. Thus it brought emphasis on the individual and his money.
3- In the past, characters in the romances stood for certain qualities(e.g. Mr. Greedy, Mr. Angry,…etc.) and not for themselves.
4-In the eighteenth -century novel, individual characters are drawn as independent regardless of their social status or personal capacity. They are portrayed as complex characters, affected by social pressures.
5-Eighteenth –century novelists such as S. Richardson, H. Fielding, and D. Defoe studied the individual’s attitudes, feelings, and motivations. Defoe emphasized individualism by writing a novel that has one central character with independent individual characteristics. Likewise, Richardson and Fielding concentrated on the individual and named their novels after their main characters.
6-The modern industrial capitalism made people pay great attention to money: how to gain it and how to keep it. In the earlier prose fiction, the main character had moral ideas, and thought only of virtues and good deeds. The eighteenth-century writers became more realistic and dealt with the only interest of the individual at their time, i.e. money. All Defoe’s characters pursue money, and they pursue it very methodically according to the loss and profit of book-keeping. Thus Robinson Crusoe leaves his father’s house and the secure life of the middle class to seek more money. This materialistic point of view began to have a tremendous influence to the extent that idealistic moral values were no longer the core of stories, but the individual and his struggle to gain money.
In a new foreword, W. B. Carnochan accounts for the increasing interest in the English novel, including the contributions that Ian Watt's study made to literary studies: his introduction of sociology and philosophy to traditional criticism. Praise for the new (2001) edition:
"Ian Watt's The Rise of the Novel still seems to me far and away the best book ever written on the early English novel—wise, humane, beautifully organized and expressed, one of the absolutely indispensable critical works in modern literary scholarship. And W. B. Carnochan's brilliant introduction does a wonderful job of showing how Watt's book came into being and changed for good the way the novel in general is taught and understood."—Max Byrd, author of Grant: A Novel
"Ian Watt's The Rise of the Novel remains the single indispensable, absolutely essential book for students of the 18th-century novel."—John Richetti, author of The English Novel in History: 1700-1780
Praise for the original edition:
"A remarkable book. . . . A pioneer work in the application of modern sociology to literature."—Manchester Guardian
"An outstanding contribution to the field of historical sociology and the sociology of knowledge. . . . The author has set the 'rise of the novel' as a new literary genre in the social context of eighteenth-century England, with emphasis on the predominant middle-class features of the period."—American Journal of Sociology