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Industrial Revolution

Birmingham's explosive industrial expansion started earlier than that of the textile-manufacturing towns of the North of England, and was driven by different factors. Instead of the economies of scale of a low-paid, unskilled workforce producing a single bulk commodity such as cotton or wool in large, mechanised units of production, Birmingham's industrial development was built on the adaptability and creativity of a highly paid workforce with a strong division of labour, practising a broad variety of skilled specialist trades and producing a constantly diversifying range of products, in a highly entrepreneurial economy of small, often self-owned workshops. This led to exceptional levels of inventiveness: between 1760 and 1850 – the core years of the Industrial Revolution – Birmingham residents registered over three times as many patents as those of any other British town or city.

The demand for capital to feed rapid economic expansion also saw Birmingham grow into a major financial centre with extensive international connections. Lloyds Bank was founded in the town in 1765, and Ketley's Building Society, the world's first building society, in 1775. By 1800 the West Midlands had more banking offices per head than any other region in Britain, including London.

Innovation in 18th-century Birmingham often took the form of incremental series of small-scale improvements to existing products or processes, but also included major developments that lay at the heart of the emergence of industrial society. In 1709 the Birmingham-trained Abraham Darby I moved to Coalbrookdale in Shropshire and built the first blast furnace to successfully smelt iron ore with coke, transforming the quality, volume and scale on which it was possible to produce cast iron. In 1732 Lewis Paul and John Wyatt invented roller spinning, the "one novel idea of the first importance" in the development of the mechanised cotton industry. In 1741 they opened the world's first cotton mill in Birmingham's Upper Priory. In 1746 John Roebuck invented the lead chamber process, enabling the large-scale manufacture of sulphuric acid, and in 1780 James Keir developed a process for the bulk manufacture of alkali, together marking the birth of the modern chemical industry. In 1765 Matthew Boulton opened the Soho Manufactory, pioneering the combination and mechanisation under one roof of previously separate manufacturing activities through a system known as "rational manufacture". As the largest manufacturing unit in Europe, this came to symbolise the emergence of the factory system.

Most significant, however, was the development in 1776 of the industrial steam engine by James Watt and Matthew Boulton. Freeing for the first time the manufacturing capacity of human society from the limited availability of hand, water and animal power, this was arguably the pivotal moment of the entire Industrial Revolution and a key factor in the worldwide increases in productivity over the following century.