The contribution of the Stephenson Company, engine manufacturers to the genesis of the British railway industry c.1823-1840

Abstract

The paper investigates the Stephenson Company’s contribution to genesis of the railway industry by exploring its business model in its formative years. The Company capitalised on a well-developed business and technological infrastructure in the North-east of England that provided the building blocks for the creation of a new industry. It gained from its linkages with two social networks which provided it with a financial safety-net during the locomotive development phase and the mechanical expertise it required: the closed Quaker network and the regional network of colliery and mechanical engineers. Whilst bridging between and across these social networks facilitated the Company’s development, it was not central to its strategic decision-making. This was shaped by the externalities of market conditions, which the Com­pany sought to influence by producing a viable product that would convince customers of its utility, and investors of the potential gains to be had through investing in railway construction.