The manufacture of military munitions and the development of a home market were critical underpinnings of the first industrial revolution in Britain. Military manufacturing supported by the British Government contributed directly to technological innovation and spurred industrialization. This is because the companies that choose to fulfill the government contracts to make military munitions found money could be made if new processes and technology was developed to fulfill the huge contracts. Military manufacturing was one of the few industries where innovation was rewarded. In most other industries conservative investors were reluctant to invest in new manufacturing technology.
But in military manufacturing the government was the investor and was unconcerned with the manufacturing technology as long as the product was delivered on time. Many technological advances were made through military manufacturing some of these were new ways to manufacture iron, conveyer belts, and the use machine tools . The technology developed for military manufacturing then spilled over into the civilian sector of the economy. And because it was now a tested technology investors who were normally cautious were willing to put their capital into these ventures which instead of pouring iron to make guns now made iron ore into stoves and pots. The second critical underpinning of the first industrial revolution was the development of a home market in Britain.
The first British industrialists manufactured textiles; specifically cotton for the home market. The growth of the home market in Britain promoted industrialization in several ways. First, it was a steady market which able to cushion the export market which was very dynamic and had sudden fluctuations. This allowed a steady rate of growth even when exports fell. Second, the home market started the process of urbanization by causing people to leave the agricultural sector of the economy and move to the cities to work in the cotton and textile factories.
This urbanization had a snowballing effect throughout the economy because it caused other business and factories to open in the cities to support this new urban class. Third, the home market caused investments to be made in improving infrastructure including roads, bridges and canals. This paved the way for industrialization which needed an efficient system to transport goods from factory to market. The home market also provided the base for other industries such as coal. This was because the home market created greater urbanization and thus the need for coal in urban England grew.
The military sector of the economy provided some of the key technological innovations that promoted industrialization. And the home market that was produced by the cotton textile trade promoted improvements in infrastructure and spurred other industries to develop.