What was the importance of factors of production during the Industrial Revolution?
The four factors of production were important to the Industrial Revolution because they are the fundamentals of industry. In other words, each of the factors refers to a specific requirement for production to occur, and the Industrial Revolution would not have been able to happen without the factors of land, labor, capital, and enterprise.
Let us first examine the impact of land on the Industrial Revolution. Land was used in an interesting way in the Industrial Revolution because it did not generally refer to land masses for farming. Rather people found that industry was most efficient in cities where factories and living spaces were close and more revenue could be generated on less space.
Second is labor. Again, the urban environment allowed for access to many laborers and because there were so many workers readily available, factory owners could pay small wages.
Capital refers to the resources available. As industry increased, the resources increased. This allowed for industry to continue to increase, causing a snowball effect to occur with resources and industry.
Finally, enterprise glued the other three factors together to launch a huge surge in industry, to the point of labeling it a revolution. It took the brain-power of entrepreneurs to look at the resources they had in their cities. They realized that they could use compact space, create demand for the jobs they offered, and create demand for their products to maximize their results.
The four factors of production: land, labor, resources, and entrepreneurship were all important to the success of the Industrial Revolution. The overwhelming demand for workers led to large scale urbanization as people moved to the city for jobs. Unskilled workers made the factories go and the banks fill.
Resources played a very strong role in the Industrial Revolution as well. Without the parts to make the finished product, factories would have been a failure. The quest for resources motivated European nations to establish colonies overseas to acquire metals, rubber, and petroleum. The need for resources also fueled the Atlantic Slave Trade in the United States and the Caribbean, as well as the land grab in Africa.
Businessmen were willing to risk their resources to take a chance at large profits, making them important factors in the Industrial Revolution as well. Tycoons like Rockefeller, Carnegie, and Firestone were not born wealthy and took huge risks investing in industrialism. There contributions were also important to the Industrial Revolution.