A re-examination of the origins of American industrial success

Wright (1990) argues the origins of American industrial success are in the institutions that enabled exploitation of natural resources. These institutions, argue David and Wright (1997), included the state and US geological surveys and universities that worked closely with industry. However, their work does not directly analyse how US re- source intensive manufacturers directly competed with their European predecessors. In this paper we analyse the rise of the US cement industry, the features of which closely resembles the pattern described by David and Wright. This was in part due to the US successfully adapting a more resource intensive production technology from England, and a rise in demand due to the gradual diffusion of reinforced concrete. Consistent with David and Wright, there is some direct evidence of university-industry links and econometric evidence of geological surveys creating a first mover advantage. However, it is argued the rise in the US industry would not have occurred without adapting German methods of quality control and standardised product and test specifications, and to credibly signal this. This is supported by the failure of the US industry to become a large scale exporter (while European firms continued to do so). This result is also suggestive of factors that may have influenced which US industries rose to domestic dominance and which rose to dominate world markets.