Central generation of electricity in the United States began with the opening of the Pearl Street Station in lower Manhattan in 1882. Although this technology eventually had enormous economic effects, by 1899 electric motors still accounted for less than 5% of total mechanical horsepower in American manufacturing establishments – electric power had not yet had a substantial impact on the American economy. Indeed, the gradual pace of early adoption of this epochal innovation is yet another example of the gradual realization of the economic impacts of truly major innovations, reflecting the need for numerous complementary innovations in technology, organization, and management to support widespread adoption. In addition, the first version of a new technology of this type inevitably must be substantially improved through a long series of incremental innovations and modifications. These modifications affect both the technology itself and the understanding, on the part of users, of its potential and operating requirements (“learning by using” – see Rosenberg [1982]).

The development of electric power generation technologies in the 20th-century United States resembled that of other technological clusters discussed in this volume in following a path of evolution that was sensitive to the U.S. natural-resource endowment, even as it transformed the definition of that endowment.