It is also possible that the steep rise in population also created an effect on the rate of technological change, which in turn provoked the growth and investment for the Industrial Revolution to take hold. The traditional reason that is given for the effects of population is that high population should force down wages as competition for wages rises. This fall in wages increases the profits available for the factory owners and industrialists, who can then reinvest that profit in order to maximise the benefit that they can gain from new inventions. However, there are two main objections to this statement. The first is that this still does not explain where the inventions come from (unless the higher profits cause the industrialists to invent), but the second problem is that this is clearly not applicable in high-wage Britain. As I have shown above, real wages were generally rising for the majority of the Industrial Revolution period. Therefore, this should mean that either population growth had a negative effect on technological change, or that they are simply a correlation.
On the other hand, there is another approach that would result in the same technological growth – but through the demand side of the population growth. As the population rises, consumption would go up (as people demand more goods), which should create more profits for the company, who can invest back into technology (Habbakuk, 1963). This was developed later to say that “there are particular fixed costs in technological progress that can only be covered if the market is large enough” (Mokyr, 2009, p307). This also fits in with the rise in wages issue, as people tend to buy more normal goods (such as those which are made using industrial techniques and new technology) than inferior goods (such as food). However, Mokyr claims that demand increases did not move the Industrial Revolution forwards: the inventions and changes were provoked by what he calls a small scale “technological elite” (Mokyr, 2009, p307).
Another simple theory is that, if there are more people, it is more likely that they will come up with new inventions or new methods of undertaking a previously difficult event (Kremer, 1993). This is similar to a idea by Lin, who claimed that if innovation is experience-based, the higher amount of workers after the population boom would see more experience and thus more innovation. This is known as the “learning-by-doing” approach (Lin, 1995). However, Mokyr again refutes this statement with a clear analysis of other countries that saw similar population growth: he claims that if this was so, “the Industrial Revolution should have occurred in eighteenth-century China” (Mokyr, 2009, p306). Similarly, this cannot explain how the new ideas would have been spread around the country – unless two people in different parts of Britain had the same idea, which seems unlikely but not impossible. The relationship between the two factors cannot be this simple. Mokyr said that it was the growth in the world population that had created the influx of technological change – due mainly to imports. Britain had the ability to “learn, copy, imitate and and improve” (Mokyr, 2009, p307) from the ideas that had spread from the continent, especially the Netherlands and Germany.
Similarly, this could be combined with the idea that a growth in population creates higher demand for the very skilled workers. This means that the quality of human capital increased and this higher level of intelligent workers creates an influx into technological development (Galor and Wei, 2000).
The final benefit that may be established is the long-term investment that is manifest as infrastructure. With the creation of the modern city in this period, Industrial Revolution infrastructure was remarkably different to any kind before. This saw an increase in road, rail and canal building (particularly towards the end of the period), along with more basic things like streetlamps. International trade was made much more easy with improvement of ships to allow for steamships and paddle steamers (Bruland in Floud and Johnson, 2004, p144). Habbakuk believed that this may have been instigated by population growth, as a richer population (which, due to the wage rises, Britian was)