For years historians have sought to identify crucial elements in the eighteenth-century rise in industry, technology, and economic power known as the Industrial Revolution, and many give prominence to the problem of energy. Until the eighteenth century, people relied on energy derived from plants as well as animal and human muscle to provide power. Increased efficiency in the use of water and wind helped with such tasks as pumping, milling, or sailing. However, by the eighteenth century, Great Britain in particular was experiencing an energy shortage. Wood, the primary source of heat for homes and industries and also used in the iron industry as processed charcoal, was diminishing in supply. Great Britain had large amounts of coal; however, there were not yet efficient means by which to produce mechanical energy or to power machinery. This was to occur with progress in the development of the steam engine.

In the late 1700s James Watt designed an efficient and commercially viable steam engine that was soon applied to a variety of industrial uses as it became cheaper to use. The engine helped solve the problem of draining coal mines of groundwater and increased the production of coal needed to power steam engines elsewhere. A rotary engine attached to the steam engine enabled shafts to be turned and machines to be driven, resulting in mills using steam power to spin and weave cotton. Since the steam engine was fired by coal, the large mills did not need to be located by rivers, as had mills that used water- driven machines. The shift to increased mechanization in cotton production is apparent in the import of raw cotton and the sale of cotton goods. Between 1760 and 1850, the amount of raw cotton imported increased 230 times. Production of British cotton goods increased sixtyfold, and cotton cloth became Great Britain’s most important product, accounting for one-half of all exports. The success of the steam engine resulted in increased demands for coal, and the consequent increase in coal production was made possible as the steam-powered pumps drained water from the ever-deeper coal seams found below the water table.

The availability of steam power and the demands for new machines facilitated the transformation of the iron industry. Charcoal, made from wood and thus in limited supply, was replaced with coal-derived coke (substance left after coal is heated) as steam-driven bellows came into use for producing of raw iron. Impurities were burnt away with the use of coke, producing a high-quality refined iron. Reduced cost was also instrumental in developing steam-powered rolling mills capable of producing finished iron of various shapes and sizes. The resulting boom in the iron industry expanded the annual iron output by more than 170 times between 1740 and 1840, and by the 1850s Great Britain was producing more tons of iron than the rest of the world combined. The developments in the iron industry were in part a response to the demand for more machines and the ever-widening use of higher-quality iron in other industries.

Steam power and iron combined to revolutionize transport, which in turn had further implications. Improvements in road construction and sailing had occurred, but shipping heavy freight over land remained expensive, even with the use of rivers and canals wherever possible. Parallel rails had long been used in mining operations to move bigger loads, but horses were still the primary source of power. However, the arrival of the steam engine initiated a complete transformation in rail transportation, entrenching and expanding the Industrial Revolution. As transportation improved, distant and larger markets within the nation could be reached, thereby encouraging the development of larger factories to keep pace with increasing sales. Greater productivity and rising demands provided entrepreneurs with profits that could be reinvested to take advantage of new technologies to further expand capacity, or to seek alternative investment opportunities. Also, the availability of jobs in railway construction attracted many rural laborers accustomed to seasonal and temporary employment. When the work was completed, many moved to other construction jobs or to factory work in cities and towns, where they became part of an expanding working class.