ABSTRACT
“Adam Smith did not see the Industrial Revolution coming”—so said my undergraduate teacher in economic history in 1985. In his seminal book The Wealth of Nations (1776), Smith lays some of the crucial groundwork for the modern science of economics, but he does not systematically address innovation. Yet parallel to his writing this treatise, the British production system began to usher forth profound changes in the organization of production and in the goods produced. While Smith discussed efficiency, the Industrial Revolution involved innovative change that radically shifted what was achievable in terms of the production of wealth.
