The growth impact of language standardization : Metcalfe’s Law and the industrial revolution

Abstract

During the Industrial Revolution, did population growth stimulate innovation, or did causality run primarily from innovation to growth? Previous research fails to explain why between 1700 and 1850: (i) most innovation originated in three clusters of cities in Britain, northern France, and the USA; (ii) the rate of urbanization in these innovating regions was greater than it was elsewhere; (iii) the most important innovations involved cooperation between co-inventors with different areas of specialization. The key, we suggest, was the existence, for the first time in history, of rapidly expanding networks of people able to write and speak standardized languages. Metcalfe’s (2013) Law states that the value of a network grows as the square of the number of its users. We find that the presence in 1700 of a monolingual dictionary describing a language which considerable numbers of people were able to read and speak was significant in determining a city’s subsequent innovation. In turn, innovation – especially cooperative innovation – was significant in explaining a city’s population growth.