The Invention of Invention

This paper models an industrial revolution as a qualitative transition from a world where innovation is infrequent and haphazard to one where it is con-tinuous and systematic. Pre-industrial innovation is treated as a social pro-cess where an individual's effectiveness as an innovator depends on the skills of other individuals in his social network. As technology improves, indi-viduals invest more time in learning through social contact. This gradual in-crease in linkage formation leads to a sudden change in the size of knowledge networks from small, isolated clusters, to a large connected cluster span-ning most of the economy, causing a sudden increase in the effectiveness of innovation: an industrial revolution. The predicted sequence of typical innovatorsfrom gifted amateurs, to lucky amateurs, to professionalsis consistent with empirical evidence. JEL: O40. Keywords: Industrial revolution, social networks, innovation. 1 Introduction