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HE railroad made the Industrial Revolution accomplished fact. What had been revolution became establishment. And the boom it triggered lasted almost a hundred years. The technology of the steam engine did not end with the railroad. It led in the 1880s and 1890s to the steam turbine, and in the 1920s and 1930s to the last magnificent American steam locomotives, so beloved by railroad buffs. But the technology centered on the steam engine and in manufacturing operations ceased to be central. Instead the dynamics of the technology shifted to totally new industries that emerged almost immediately after the railroad was invented, not one of which had anything to do with steam or steam engines. The electric telegraph and photography were first, in the 1830s, followed soon thereafter by optics and farm equipment. The new and different fertilizer industry, which began in the late 1830s, in short order transformed agriculture. Public health became a major and central growth industry, with quarantine, vaccination, the supply of pure water, and sewers, which for the first time in history made the city a more healthful habitat than the countryside. At the same time came the first anesthetics.

With these major new technologies came major new social institutions: the modern postal service, the daily paper, investment banking, and commercial banking, to name just a few. Not one of them had much to do with the steam engine or with the technology of the Industrial Revolution in general. It was these new industries and institutions that by 1850 had come to dominate the industrial and economic landscape of the developed countries.

This is very similar to what happened in the printing revolution -- the first of the technological revolutions that created the modern world. In the fifty years after 1455, when Gutenberg had perfected the printing press and movable type he had been working on for years, the printing revolution swept Europe and completely changed its economy and its psychology. But the books printed during the first fifty years, the ones called incunabula, contained largely the same texts that monks, in their scriptoria, had for centuries laboriously copied by hand: religious tracts and whatever remained of the writings of antiquity. Some 7,000 titles were published in those first fifty years, in 35,000 editions. At least 6,700 of these were traditional titles. In other words, in its first fifty years printing made available -- and increasingly cheap -- traditional information and communication products. But then, some sixty years after Gutenberg, came Luther's German Bible -- thousands and thousands of copies sold almost immediately at an unbelievably low price. With Luther's Bible the new printing technology ushered in a new society. It ushered in Protestantism, which conquered half of Europe and, within another twenty years, forced the Catholic Church to reform itself in the other half. Luther used the new medium of print deliberately to restore religion to the center of individual life and of society. And this unleashed a century and a half of religious reform, religious revolt, religious wars.

At the very same time, however, that Luther used print with the avowed intention of restoring Christianity, Machiavelli wrote and published The Prince (1513), the first Western book in more than a thousand years that contained not one biblical quotation and no reference to the writers of antiquity. In no time at all The Prince became the "other best seller" of the sixteenth century, and its most notorious but also most influential book. In short order there was a wealth of purely secular works, what we today call literature: novels and books in science, history, politics, and, soon, economics. It was not long before the first purely secular art form arose, in England -- the modern theater. Brand-new social institutions also arose: the Jesuit order, the Spanish infantry, the first modern navy, and, finally, the sovereign national state. In other words, the printing revolution followed the same trajectory as did the Industrial Revolution, which began 300 years later, and as does the Information Revolution today.

What the new industries and institutions will be, no one can say yet. No one in the 1520s anticipated secular literature, let alone the secular theater. No one in the 1820s anticipated the electric telegraph, or public health, or photography.

The one thing (to say it again) that is highly probable, if not nearly certain, is that the next twenty years will see the emergence of a number of new industries. At the same time, it is nearly certain that few of them will come out of information technology, the computer, data processing, or the Internet. This is indicated by all historical precedents. But it is true also of the new industries that are already rapidly emerging. Biotechnology, as mentioned, is already here. So is fish farming.

Twenty-five years ago salmon was a delicacy. The typical convention dinner gave a choice between chicken and beef. Today salmon is a commodity, and is the other choice on the convention menu. Most salmon today is not caught at sea or in a river but grown on a fish farm. The same is increasingly true of trout. Soon, apparently, it will be true of a number of other fish. Flounder, for instance, which is to seafood what pork is to meat, is just going into oceanic mass production. This will no doubt lead to the genetic development of new and different fish, just as the domestication of sheep, cows, and chickens led to the development of new breeds among them.

But probably a dozen or so technologies are at the stage where biotechnology was twenty-five years ago -- that is, ready to emerge.

There is also a service waiting to be born: insurance against the risks of foreign-exchange exposure. Now that every business is part of the global economy, such insurance is as badly needed as was insurance against physical risks (fire, flood) in the early stages of the Industrial Revolution, when traditional insurance emerged. All the knowledge needed for foreign-exchange insurance is available; only the institution itself is still lacking.

The next two or three decades are likely to see even greater technological change than has occurred in the decades since the emergence of the computer, and also even greater change in industry structures, in the economic landscape, and probably in the social landscape as well.

HE new industries that emerged after the railroad owed little technologically to the steam engine or to the Industrial Revolution in general. They were not its "children after the flesh" -- but they were its "children after the spirit." They were possible only because of the mind-set that the Industrial Revolution had created and the skills it had developed. This was a mind-set that accepted -- indeed, eagerly welcomed -- invention and innovation. It was a mind-set that accepted, and eagerly welcomed, new products and new services. It also created the social values that made possible the new industries. Above all, it created the "technologist." Social and financial success long eluded the first major American technologist, Eli Whitney, whose cotton gin, in 1793, was as central to the triumph of the Industrial Revolution as was the steam engine. But a generation later the technologist -- still self-taught -- had become the American folk hero and was both socially accepted and financially rewarded. Samuel Morse, the inventor of the telegraph, may have been the first example; Thomas Edison became the most prominent. In Europe the "businessman" long remained a social inferior, but the university-trained engineer had by 1830 or 1840 become a respected "professional."

By the 1850s England was losing its predominance and beginning to be overtaken as an industrial economy, first by the United States and then by Germany. It is generally accepted that neither economics nor technology was the major reason. The main cause was social. Economically, and especially financially, England remained the great power until the First World War. Technologically it held its own throughout the nineteenth century. Synthetic dyestuffs, the first products of the modern chemical industry, were invented in England, and so was the steam turbine. But England did not accept the technologist socially. He never became a "gentleman." The English built first-rate engineering schools in India but almost none at home. No other country so honored the "scientist" -- and, indeed, Britain retained leadership in physics throughout the nineteenth century, from James Clerk Maxwell and Michael Faraday all the way to Ernest Rutherford. But the technologist remained a "tradesman." (Dickens, for instance, showed open contempt for the upstart ironmaster in his 1853 novel Bleak House.)

Nor did England develop the venture capitalist, who has the means and the mentality to finance the unexpected and unproved. A French invention, first portrayed in Balzac's monumental La Com�die humaine, in the 1840s, the venture capitalist was institutionalized in the United States by J.�P. Morgan and, simultaneously, in Germany and Japan by the universal bank. But England, although it invented and developed the commercial bank to finance trade, had no institution to finance industry until two German refugees, S. G. Warburg and Henry Grunfeld, started an entrepreneurial bank in London, just before the Second World War.

HAT might be needed to prevent the United States from becoming the England of the twenty-first century? I am convinced that a drastic change in the social mind-set is required -- just as leadership in the industrial economy after the railroad required the drastic change from "tradesman" to "technologist" or "engineer."

What we call the Information Revolution is actually a Knowledge Revolution. What has made it possible to routinize processes is not machinery; the computer is only the trigger. Software is the reorganization of traditional work, based on centuries of experience, through the application of knowledge and especially of systematic, logical analysis. The key is not electronics; it is cognitive science. This means that the key to maintaining leadership in the economy and the technology that are about to emerge is likely to be the social position of knowledge professionals and social acceptance of their values. For them to remain traditional "employees" and be treated as such would be tantamount to England's treating its technologists as tradesmen -- and likely to have similar consequences.

Today, however, we are trying to straddle the fence -- to maintain the traditional mind-set, in which capital is the key resource and the financier is the boss, while bribing knowledge workers to be content to remain employees by giving them bonuses and stock options. But this, if it can work at all, can work only as long as the emerging industries enjoy a stock-market boom, as the Internet companies have been doing. The next major industries are likely to behave far more like traditional industries -- that is, to grow slowly, painfully, laboriously.

The early industries of the Industrial Revolution -- cotton textiles, iron, the railroads -- were boom industries that created millionaires overnight, like Balzac's venture bankers and like Dickens's ironmaster, who in a few years grew from a lowly domestic servant into a "captain of industry." The industries that emerged after 1830 also created millionaires. But they took twenty years to do so, and it was twenty years of hard work, of struggle, of disappointments and failures, of thrift. This is likely to be true of the industries that will emerge from now on. It is already true of biotechnology.

Bribing the knowledge workers on whom these industries depend will therefore simply not work. The key knowledge workers in these businesses will surely continue to expect to share financially in the fruits of their labor. But the financial fruits are likely to take much longer to ripen, if they ripen at all. And then, probably within ten years or so, running a business with (short-term) "shareholder value" as its first -- if not its only -- goal and justification will have become counterproductive. Increasingly, performance in these new knowledge-based industries will come to depend on running the institution so as to attract, hold, and motivate knowledge workers. When this can no longer be done by satisfying knowledge workers' greed, as we are now trying to do, it will have to be done by satisfying their values, and by giving them social recognition and social power. It will have to be done by turning them from subordinates into fellow executives, and from employees, however well paid, into partners.

Copyright © 1999 by The Atlantic Monthly Company. All rights reserved.
The Atlantic Monthly; October 1999; Beyond the Information Revolution - 99.10 (Part Three); Volume 284, No. 4; page 47-57.