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

Abstract

The paper seeks to understand the part played by the Stephenson Company in the rapid development of the railway industry by exploring its business model in its formative years. The Company capitalised on a pre-existing and well-developed business and technological infrastructure in the North-east of England that provided the building blocks for the creation of a new industry. The Company 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 to achieve its aims: the closed Quaker business 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. Rather, 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.