Major technological innovations are not sufficient to enable socio-economic progress without governments creating the institutional framework – in particular via education, welfare and training programs - required for the absorption of the new technical possibilities these innovations create. To support this claim, we provide a comparative historical view of how four different countries tackled the challenge of adapting to three successive technological revolutions, with varying degrees of success. We look at the relationship between the welfare, education and training policies implemented by the governments of the United Kingdom, Germany, the United States, and Sweden and their socio-economic results. The historical period studied spans from 1830 to 1970. This, according to the neo-Schumpeterian view we follow, covers the second, third and fourth technological revolutions, namely, the Age of Iron, Coal, and Railways, the Age of Steel and Heavy Engineering, and the Age of the Automobile and Mass Production; the current Age of Information and Telecommunications being the fifth.
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It should be noted that, in contrast with France and Germany, there were no high-evel engineering education in Britain. Much of the design and work was performed by engineers who learned under renowned masters (often in Europe) rather than in universities. Some of them, like George Stephenson or Isambard Kingdom Brunel became as famous as current ‘rock stars’ [21,22]. As indicated by the Institution of Civil Engineers (ICE), founded in London in 1818, and granted Royal Charter in 1828, “civil engineering hadn't really become an official profession yet” though there was training in the army and navy. Equally, the Institution of Mechanical Engineers, created in 1847, became an institution for sharing knowledge and experience among practitioners in the world of iron, steam engines and railways. Where Britain was clearly strong in terms of training higher engineering skills was in all that related to shipbuilding to provide the Navy [ 23–25]. Although the more complex tasks were performed in the public sector, a private shipbuilding industry grew at its side serving private trade and military procurement.As could be expected, given its clear industrial orientation, the pioneer in guaranteeing mass education had been one of the North-Eastern states. As early as 1837 the Secretary of Education in Massachusetts inaugurated state-wide professional teachers. In 1852 the state passed the first universal public education law recognising the government's role in providing education for agricultural and industrial purposes. The example was later followed by other Northern states. This was reinforced by Lincoln, in 1862, granting federal lands to the states, with the express purpose of funding research and endowing higher education in the technical areas, from agriculture to industry, a focus that contrasted with the British tradition of liberal arts. That was the origin of the so-called Land-Grant universities of which the Massachusetts Institute of Technology (MIT) was one of the first. In 1869, again it was also Massachusetts that created the National Society for the Promotion of Industrial Education to prepare ‘all men, women, and children’ for a new type of instruction so as to avoid having American manufacturers ‘competing disadvantageously with those of Europe’ . Other states and the federal government were gradually to follow suit. This was in parallel to the emergence of scientific curricula at military academies such as New York's West Academy, where colonel Thayer (1817–1833), had been one of the first ones to introduce studies of civil engineering , making military graduates responsible for dams, dykes, and the first railways all over the country.While British industry saw itself as the unquestionable factory of the world, American manufacturers felt the pressure of competition and were determined to learn and surpass. The frequent international exhibitions, in Europe or America, helped both industrialists and government to see the technological frontier and to acknowledge the role of industrial education in benefitting employment and the growth of the economy. Yet, the North American powerhouse only managed to transform its entrepreneurial attitude into national leadership in 1865, when the Civil War achieved political union. In 1869, the railways coming from the East and the West finally joined, guaranteeing the physical union as well. Ironically, it was mainly British capital that funded much of the railroads, which served to unify the national market and help the US forge ahead. The boom that followed, similar to one in Germany, collapsed in 1873. But, in the US case, the recession did not lead to loss of confidence in the unfettered free market, especially because government promoted competition inside the country while it guaranteed protection against imports and, soon also, technical education.There were also isolated efforts by enthusiastic teachers such as Spencer, who in 1871 contributed to the establishment of an association for geometrical teaching. Similarly, while Oxford and Cambridge concentrated on educating aristocrats, the military leaders, the clergy and the rising bourgeoisie, other universities emerged trying to fill the gap for the excluded, be they of other religions (such as Jews, or some of the rebellious protestant sects) or of no religion at all. University College London, for instance, created in 1826 as a secular alternative, still faced many legal obstacles to be able to award degrees and even to be considered legally as a ‘university’. However, it gradually evolved and, by the 1890s, it was emulating the Germans with high level education in science and engineering.The US government was focused on promoting industrial development across the whole country, now unified. High tariff barriers were erected, both for federal revenue – since no federal income tax existed before the late 1910s – and to protect companies while they competed nationally and gradually reached competitiveness in the world market. The other form of support for both agriculture and industry was the creation of universities for research and education. Recent experience in Asia has shown that both governments and businesses in catching-up countries are acutely aware of the need to implement own variants of tariff barriers to protect their markets, as well as acquire the technological capabilities possessed by the leaders. In the case of the early United States, the shortage of labour made it all the more urgent to apply whatever technologies could increase the productivity of the available work force. Engineering education was an obvious route to follow. The lack of federal income in the US made government use the vast expanses of land, acquired during the conquest of the West and in various wars and purchases, to fund the universities. The teaching, research and extension services of these institutions, across the country, became an essential part of the forging ahead process.Mass consumption was soon encouraged by the credit system, at first provided directly by the automobile and radio companies and later by the credit card, beginning with the Diner's Club in the 1950s and followed by several others, widening their reach. But paradoxically what led the US to become the pioneer and emblem of the consumer society were the many welfare- and union-supporting measures that increased wages and maintained regular incomes with unemployment insurance and pensions. Most importantly for our purposes, during the fourth technological revolution the US government multiplied the public education system at all levels, including university-based professionalism, vocationalism and basic education for minimum skill jobs. In parallel, the domestic economy kept being protected; first, with the 1921 Emergency Tariff in favour of local agriculture, and then, after the catastrophic crash of 1929, with the 1930 Smoot-Hawley Tariff Act imposing historically high duties on imports of agriculture and 20,000 industrial products. Only with the 1948 GATT agreement, when the US economy was already leading the world in productivity, and had little competition, would tariff barriers be practically eliminated to promote free international trade.Given the experience of unemployment in the 1930s, a new type of assistance, focused on human capital investment, gradually became the norm in the US. Following the Second World War, vocational education became an instrument to fight unemployment, ‘without delay’ , among the millions of veterans returning, as well as a way to retrain the workers being shed by the defence industry. Roosevelt's interventions took into account the specific needs of American businesses, while supporting workers' rights and spurring national progress. Whether it was the significant investment in human capital, the complementary creation of government agencies, the huge electrification projects or the introduction of funds in favour of innovative agricultural machines, government intervention fostered the sectoral change observable in the US in the 20th century. Between 1930 and 1950, employment in agriculture dropped from 20.9 to 11%, while more Americans found jobs in the distribution sector (the rate increased from 11.7 to 18.7%) or started working for the government (from 7.2 to 10.1%) [49,50].Having overtaken Britain after WWI, the US went on to lead the world as the financial, military and industrial power that helped the allied victory in WWII and funded much of the reconstruction of Europe. It led the subsequent post-war boom and, after exhausting the mass production revolution by the early 1970s, led both the information revolution and the globalisation process. Government efforts in adapting education and training to the specific needs of the economy were an important element in the success.
This research, part of the Work Package 7 deliverable 7.3 (Working Paper History State's Role) ‘The Importance of Education, Training and Welfare Policies in Supporting Technological Revolutions: A Comparative and Historical Analysis of UK, US, Germany, and Sweden (1830–1970)’, was undertaken within the BEYOND4.0 project, which has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No. 822296. The authors are grateful to Olavi Kangas, Josh R. Collins, Tamsin Murray-Leach, Peter Oeji, Steven Dhondt, Gabriele Cappelli, and two anonymous reviewers for their useful feedback and support.
In order to avoid an excessive divide between the rural East and the industrialised West, farm research was promoted with financial and regulatory support, to help it adapt to technical progress [ 81 ]. But the central piece of the German industrial transformation was public education and training. Given that the third revolution was about the flourishing of the electrical, chemical and other science-based industries, the German government soon saw that advance was ‘increasingly dependent on public educational and research facilities’ [ 82 ]. By 1891 the government had accepted full responsibility for vocational training, which was reflected in the financial support granted to both the Fachschulen (specialised schools) and the Technische Hochschulen (Institutes of Technology).
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