the case of the synthetic dye industry, 1857–1914 - Maastricht ...

Comparing evolutionary dynamics across different national settings 189
that being a high-tech industry is not sufficient to cause a quick shake-out. Social
context matters too, as we describe in more detail below.
Relatively small fluctuations in Britain
The British pattern in the early years of the synthetic dye industry resembles more
the S-shaped curve that has been found in studies of diffusion of innovations,
diseases, or fashions. The entry slope for Britain is not as steep as that of France.
Britain, with a peak of 16 firms, never reached the industry participation level of
France. The period of rapid growth took place from 1859 to 1863. Britain also
experienced a decline of synthetic dye firms from 1864 to 1866, but the decline
was not nearly as dramatic as in the case of France, where one can truly speak
of a shakeout. Existing historiography emphasizes that Britain was the leading
country in the early synthetic dye industry, with France closely following and
Germany far behind (Beer, 1959; Travis, 1993). Our data show, however, that
France was not trailing at all. These findings call for a reevaluation of the early
period in the synthetic dye industry (see Fig. 3). Growth in France was earlier
and quicker, and more firms participated in the French industry in the very early
years. Figure 4, which plots the fraction of the global firm population that resided
in each of the five major countries in a given year, makes this point forcefully.
Already in 1858 the French share in the global firm population surpassed the
British share, and until 1870 the number of synthetic dye firms in Britain was
lower than in France. The British industry reached the lowest (relative) level
in the number of firms in 1864. From 1864 to 1914 the number of industry
participants remained fairly constant in Britain. The British industry stabilized
earlier than the French, but it is striking how the levels of industry participation
became similar in the two countries from the 1870s onward, with Britain having
a slightly larger number of firms than France.
Germany: Long rise in the number of firms
Germany also displays a steep rise in the number of firms between 1858 and
1863. The number increased from 2 firms in 1858 to about 22 in 1863. Existing
historiography does not discuss this early entry of a large number of firms
in Germany, in part because these early German entrants did not possess the
visibility of the leading British and French firms during this period. The timing
of the German rise is about the same as in France, but Germany began at a
lower level in 1858. The striking difference between Germany, on the one hand,
and Britain and France, on the other, is that the number of firms in Germany
continued to increase after 1863. The lasting growth in the number of German
firms is the reason the dramatic shakeout that occurred in France does not show
up at the global level. After a short consolidation phase (1873-76), the growth
continued from 1877 to 1897. In this period the number of firms increased as
a step function, alternating between periods of rapid growth and stabilization,