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The Industrial Revolution of the 18th century was a period of social and technological change in which manufacturing began to rely on steam power, fueled primarily by coal, rather than on water or wind. The causes of the Industrial Revolution remain a topic for debate with some historians seeing it as an outgrowth from the social changes of the Enlightenment and the colonial expansion of the 17th century.

The Industrial Revolution began in the Midlands area of England and spread throughout England and into continental Europe and the northern United States in the 19th century. Before the improvements made to the pre-existing steam engine by James Watt and others, all manufacturing had to rely for power on wind or water mills or muscle power produced by animals or humans. But with the ability to translate the potential energy of steam into mechanical force, a factory could be built away from streams and rivers, and many tasks that had been done by hand in the past could be mechanized. If, for example, a lumber mill had been limited in the number of logs it could cut in a day due to the amount of water and pressure available to turn the wheels, the steam engine eliminated that dependence. Grain mills, thread and clothing mills, and wind driven water pumps could all be converted to steam power as well.

Shortly after the steam engine was developed, a steam locomotive called The Rocket was invented by George Stephenson, and the first steam-powered ship was invented by Robert Fulton. These inventions, and the fact that machines were not taxed as much as people, caused large social upheavals, as small mills and cottage industries that depended on a stream or a group of people putting energy into a product could not compete with the energy derived from steam. With locomotives and steamships, goods could now be transferred very quickly across a country or ocean, and within a reasonably predictable time, since the steam plants provided consistent power, unlike transportation relying on wind or animal power.

One question that has been of active interest to historians is why the Industrial Revolution occurred in Europe and not in other parts of the world, particularly China. Numerous factors have been suggested including ecology, government, and culture. Benjamin Elman argues that China was in a high level equilibrium trap in which the non-industrial methods were efficient enough to prevent use of industrial methods with high capital costs. Kenneth Pommeranz in the Great Divergence argues that Europe and China were remarkably similar in 1700 and that the crucial differences which created the Industrial Revolution in Europe were sources of coal near manufacturing centers and raw materials such as food and wood from the New World which allowed Europe to economically expand in a way that China could not.

The transition to industrialisation was not wholly smooth, for in England the Luddites - workers who saw their livelihoods threatened - protested against the process and sometimes sabotaged factories.

Industrialisation also led to the creation of the factory, and was largely responsible for the rise of the modern city, as workers migrated into the cities in search of employment in the factories.

See also History, History of Science and Technology, 18th century and 19th century, as well as Rail Transport.