The industrial revolution changed the way work was done in the same way that the technology revolution is changing work today. The old cottage system of work migrated to larger units of production, particularly as the availability of centralized power made it possible to work on a larger scale. Not only did the nature of the enterprise change but the entire support structure of work was modified as a result. The need for significantly larger amounts of capital to support the new scale of industry changed the worlds of banking, insurance, exporting.
This new format of working changed the lives of workers forever. The craftsman working in his cottage making blankets, sweaters, hats or working as a blacksmith on iron could no longer survive as a result of increased competition and lower prices. This cottage worker now had to either step up and become an employer and owner of one of the factories or as was more common, become a wage slave in one of the factories. While in luxury goods, there was still a very hands on element and cottage style workers merely migrated to a new location where they did much of the same work as they had before, the introduction of powered machines radically changed the organization of job functions from the old handicraft tradition.
Adam Smith in The Wealth of Nations (1776) described the new production system in a pin factory:
“One man draws out the wire; another straights it; a third cuts it; a fourth points it; a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business; to whiten the pin is another; it is even a trade by itself to put them into the paper; and the important business of making a pin is in this manner divided into about 18 distinct operations.” According to Smith, a single worker “could scarce, perhaps with his utmost industry, make one pin in a day, and certainly could not make 20.” The new methods enabled a pin factory to turn out as many as 4,800 pins a day.”