Overview and Introduction

Thus concluded an inquiry into Britain’s industrial performance and her future industrial prospects in 1928: it aptly captures the picture of industry in the interwar years as having both positive and negative aspects, sound characteristics but equally constraints on its ability to realise its full potential. As indicated in chapters 1 and 4 above, industry before the war was not without its problems: shares of world trade slipped as other nations industrialised; new industries born of the new technology of electricity, motor power and chemicals were relatively slow to develop; Britain’s productivity performance seemed less impressive than that of its main rivals. However, these concerns were small compared to the chorus of predictions of gloom which characterised the interwar years: a collapse in international trade, and with it our export markets, signalled a picture of doom to contemporary commentators.

There was, however, another side to industrial performance in these years: a story of successful industries, firms adapting to change, technological innovation and entrepreneurial energy. How do we explain this? Which industries and firms prospered, and which did not? Why were some industries able to adapt to change, but others not? What were the implications for the long-run performance of the economy? Insights from industrial economics help us to identify constraints on change and provide the theoretical framework for this chapter.