The Third Era: A New Industrial Revolution

The aim of our research over the last ten years was to seek to understand how a third era in the industrial revolution (driven by the perfect storm of digital design and a collaborative culture we mentioned in our last blog post) will impact firms developing products and services. How do easy-to-use digital tools like computer-aided-design (CAD) and fast, capable 3D printers empower individuals and small teams in firms? How do collaborative tools like Basecamp and Slack help develop and manage decentralized innovators? And overall, how might firms strategically approach new ways to innovate given this digitization? In The Innovation Navigator, we explore these issues and how companies can best leverage these changes in their innovation processes.

But first, let’s explore how we got here. We first started this research by looking at how CAD and the fast iterations it enables impacts the product development process. We found that it does, and sometimes too many iterations too late in the development process can cause issues. We wrote about this in both academic and practitioner articles. We then began looking at how changes digitization and culture could impact us in the near future, and what they might mean for firms as they navigate the dynamics of the 21st century.

To ground our thinking, we looked towards the past, and how tools and people who made them changed the landscape of innovation, ultimately leading to the centralized industrial business model still prevalent today. In 2013 we headed to Paris, France, to present our thoughts on the subject at the International Product Development Management Conference. The conference theme was “Re-Enchanting Technology.” Our presentation and conference paper was entitled “The Perfect Storm: How the Convergence of Digital Design, Rapid Prototyping, and a Sharing Culture is changing Product Development.” This paper was an initial prototype of what was to become our book. Below are some excerpts from the paper, starting with the historical perspective we examined to understand distinct eras in approaches to innovation.

“The history of innovation and how new technology changes how things are made and used has a rich history… A number of scholarly disciplines ranging from economics to sociology to technology history have wrestled with building an understanding of how new technologies change production and consumption patterns, and ultimately shape entire societies (Basalla, 1988; Rosenberg, 1982; Schumpeter, 1942; Smith, 1776).  For the purpose of our Paris paper, we used a relevant example. We reviewed how the process of creating and consuming the written, and later printed word, unfolded. This example extracts relevant parameters to describe such a process and how this is correlated to the design and production of engineered products today.

For most of human history, writing – and reading – was a skill that only a small fraction of the population possessed.  In medieval Europe, writing manuscripts was mostly done by monks in monasteries – and their readers were other monks.  In other words, both the production capacity and the market were very limited, and between the sixth and fifteenth century book production showed a consistent correlation with the number of monasteries.  During this timeframe, the total book production across Western Europe grew from around 13,000 during the sixth century to about 5,000,000 during the fifteenth century (Buringh and Van Zanden, 2009).

After the introduction of the moveable type printing press by Gutenberg in 1454, and increasing availability of printable paper, book production accelerated significantly.  While the 50 years between 1454 and 1500 saw a total book production of about 12.5 million books, three hundred years later, close to 629 million books were produced between 1751 and 1800.  This thirtyfold increase, measured as book production-per-capita, “can be decomposed into two elements: a tenfold increase caused by fallen book prices and a (slightly less than) threefold increase in literacy.” (Buringh and Van Zanden, 2009:435)  In other words, dramatically increased production volumes caused unit cost to fall, and lower the access barrier for broader sections of society.

The technological change in printing technology was followed by changes in distribution channels of ‘information.’  During the sixteenth century, news pamphlets appeared in Venice, and later elsewhere in Europe, reporting on foreign wars and politics.  These were followed by printed weeklies – first versions of what we today would call newspapers – in the early seventeenth century in cities such as Basel, Frankfurt, Vienna, Hamburg, Berlin, and Amsterdam (Stephens, 1994).  Over the next two-hundred years, the number of newspapers grew both in Europe and North America.  Overall, increasing literacy rates substantially broadened the market to low-cost reading options, making it an attractive market for many start-up publishers.

During the nineteenth century the typewriter was invented, with early commercial models appearing in the 1870s in the United States (U.S.).  The growing industrialization had created a burgeoning need for business communication, and typewriters provided near-printer quality for individual documents.  Over the next three decades, almost all non-private written communication was produced by typewriters.  The cost per print-quality document went down dramatically, and a whole new profession, typists, was created: between 1890 and 1920 the number of typists and stenographers in the U.S. rose from 33,000 to 786,000 (Utterback, 1994:8).

While the typewriting technology remained remarkably stable for over 80 years, it came to an end in the 1980s.  The advent of, first word processing machines, and later general purpose computers, led to a swift technology transition within less than twenty years in the developed world.  The new technologies empowered the end-user to compose his own documents in much higher quality with respect to layout, font, and style, while complementing technologies such as ink and later laser printers enabled high quality production at low cost without requiring any printing expertise.”

The next wave of technology that changed the writing and reading was the Internet, and associated programs and services.  The Internet itself dramatically lowered the access costs for billions of people across the globe, and, vice versa, created a large market for many publications, albeit one in which it turned out to be difficult to make a profit.  Now many documents are not even printed anymore, but their entire existence is digital.  Entirely new forms of publication have emerged, such as blogs and Twitter tweets, and new forms of self-publishing allow anyone without specific expertise or capital to publish his or her own work (e.g. Scribd). This how allowed billions of people to publish their thoughts on social platforms like Facebook, change their consumption of news, and utilize new means of broadcasting and alerting of social events, etc. New ventures from Instagram to Youtube grew from this transformation.

In our next installment, we do the same historical treatment with the design and engineering of products driven by changes in CAD and collaborative tools… a sea change which is fostering this third era in the industrial revolution.

This blog post contains an excerpt from a paper presented at the International Product Development Management Conference, Paris, France, 2013.


Basalla, G. (1988). The Evolution of Technology. Cambridge: Cambridge University Press.

Buringh, E. and Van Zanden, J.L. (2009). Charting the “Rise of the West”: Manuscripts and Printed Books in Europe, A Long-Term Perspective from the Sixth through Eighteenth Centuries. Journal of Economic History 69(2), 409-445.

Rosenberg, N. (1982). Inside the Black Box: Technology and Economics. Cambridge, UK: Cambridge University Press.

Schumpeter, J.A. (1942). Capitalism, socialism, and democracy. New York: Harper.

Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations.

Stephens, M. (1994). History of Newspapers. In: Collier’s Encyclopedia.

Utterback, J.M. (1994). Mastering the Dynamics of Innovation. Boston, Massachusetts: Harvard Business School Press.