After reading this article you will learn about:- 1. Meaning of Factory System 2. Evolution of Factory System 3. Economic Development 4. Technological Development 5. Merits 6. Demerits.

Meaning of Factory System:

Modern Industry means “Factory system”, and can be described as the system of production in which hand tools have been replaced by complicated and costly automatic machines. The works are carried out in large workshops by a large number of workers.

The different requirements of house which could not be fulfilled by one man alone, gave birth to a united work which in turn took the shape of a “Factory”. Modern Industries brought the several processes of manufacture under one roof, centralized and increased the use of power, introduced specialized tools and machines and hired workers for fixed wages and hours.

The growth of industry during the past 250 years was specially marked by technological develop­ment; the greater increase in inventions of products and processes, the wider use of steam engines as prime-movers, the application of mechanical science to industrial processes, greater specialisation in tools, machines and the labour and rapid expansion of the principle of inter­changeable parts.

Evolution of Factory System:


The invention of one machine after another in the 18th and 19th centuries had a very great impact on the economic life of whole world. Actually, the process which first started in England later on spread over the different parts of the world. The system of production which came into being as a result of this “Industrial Revolution” is now known as “Factory System”.

During the middle age, the India’s sense of leadership converted to selfishness and proud made us parasite. We ruined to the last and condition still got worse by the world wars in which not only money and skill was destroyed but also a large number of talented people were slaugh­tered.

India has re originated effort since independence and has been able to bring this present great development in short period of about 60 years. Today almost all type of industries are running in India and in some of the fields such as shoe, jute, sewing machines etc. we are leading world market and exporting these products in large quantities.

We have equipped our country with large plants of raw iron, machine tools, transportation, electronics equipment’s and textile. A number of steel plants, heavy electrical, aeronautics, automobiles, defence, com­munication, education and other social and country requirement plants are running in different parts of the country.


The government is trying its best to accelerate the Indian industries and to encourage the industrialists to make the country self-sufficient and satisfied.

Impact of Factory System on Labour and Management:

The modern system of manufacturing has given rise to many problems of various nature, such as:

1. Problem of using complicated machinery.


2. Problem of raising capital for machinery, building and materials.

3. Problem of managing and running the industries.

4. The safety and security of labour class who work in factories and depend on wages for their livelihood has given rise to many social, political and economic problems.

5. The problem of rationalization and modernization.


6. The problem of large requirement of well-trained workers.

7. The problem of competition with foreign market for the purpose of increasing exports.

8. The problem of regional disparity in industries.

Economic Development of Factory System:

From its very beginning the whole world has been engaged in a continuous social, techno ­logical and scientific revolution. It has moved from, handicraft to mechanical to automatic mass production, from water power to steam to nuclear power; through mineral, chemical, metallur­gical and electronic revolutions.


The factory system may be defined as “an attempt to organise the industries on modern and scientific lines”. The development of industries on modern lines first took place in England in 1770.

The economic development of industries can roughly be classified in the following three stages:

(a) Family or Household System.

(b) Handicraft System,


(c) Factory System.

(a) Family or Household System:

This is the oldest form. In this each family provides its own requirement (needs). This is the system of making the things in and for a household from home furnished materials. This method today assumes a minor position. The woman who cro­chets’a table cloth at home from yarn is the example of this system.

(b) Handicraft System:


The family system later on developed into handicraft system. The main feature of this system is specialisation on some particular work such as carpenter, mason, black-smith etc. In this system, one person satisfies a particular need of other and exchanges his labour or product for those of others.

There is a greater differentiation or division of work in this stage than that in the family or household system. The handicraftsman works for the customer. Generally, he has local market in his town and its immediate neighbourhood. A good example of such production is the local tailor who will make you a suit on your order.

(c) Factory System:

This is known as “Modern System” of manufacturing. It satisfies the economic wants of individuals, communities and nations by manufacturing things in work­shops which utilize the men, materials, machines, money and methods to meet the market needs.

Technological Development of Factory System:

1. Government Policy:

After independence Government of India is paying very much atten­tion on industrial and technological development, for which a clear policy was framed in March 1958. Since then, efforts are being made to establish national laboratories and research institu­tions.


Several such laboratories and research institutions are now working in this field under the control of Council of Scientific and Industrial Research. Several laboratories are running in the different universities.

Atomic Energy Commission is implementing the programme for the development of atomic energy for peaceful purposes. The aim of this programme is to encourage the use of atomic energy in agriculture, biology, industry, medicine, electric generation, mining, irrigation etc.

For the advancement of technical training and research to meet the requirement of techni­cal personnel for the economic development, Engineering Colleges and Polytechnics have been established. In addition, several industrial training centres are training the craftsmen in differ­ent trades.

Thus an atmosphere of science and technology is being created in the country. Now-a-days our country is improving its position considerably in the foreign market.

2. Technological Change:

Technological development is bringing the change in the world very rapidly. It is playing an important role in improving the living conditions. With the industrial revolution development of means of transport, communication and agricultural techniques have taken place, which resulted certain fundamental changes in social structure.


Fields of Technical Changes:

Following are some of the important fields of technical changes, which have effected the social life considerably:

(i) Mechanisation of Industries.

(ii) Development of means of Transport.

(iii) Development of means of Communication.

(iv) Introduction of new Agricultural techniques.


(i) Mechanisation of Industries:

Mechanisation of industries due to technical develop­ment effects the society in different ways, some of them are described hereunder:

(a) Factory System:

Mechanisation of industries has given birth to factory system. In this system in place of individual production or job production, integrated plants are installed for mass production. Thousands of people are employed in big industries and high managerial techniques are required to control them. Now-a-days the labour control is becoming a problem with rapid switching over to such industries for high production.

(b) Urbanisation:

Big factories are main reason for the growth of big cities. People in-search of work migrates from rural areas to the sites of work and settle there. As a result market centre, schools, colleges, hospitals etc. are established. With the growth of industrial production and social life of the people working in it, new businesses are expected, which result in big business houses, banks, transport companies come to set up and thus form a township.


(c) Rise to New Class:

Due to industrialisation new classes came into existence (i) Capitalists who invested money and controlled production, (ii) Workers-who produced for their mas­ters and (iii) then, in between these two there were middle classes and white collared bureau­crats or managers.

Later on conflict started between these classes. Labour class formed the trade unions, while the capitalists formed their federations and thus each wanted to promote their class interests.

(d) Easy Working:

In addition to machines for industrial production technology has also brought into use, lots of mechanical appliances through which work at home became easier and less tire-some. These appliances save large amount of time specially for the house wives. Due to these facilities and better standard of living women came out of home to work side by side with men today and started competing with men.

(ii) Development in the Means of Transport:


The means of transport have also devel­oped considerably with the development of technology. Development of cycle, motor cycle, mo­tor car, railway trams, ships and aeroplanes represent the different stages in the growth of transportation.

With the help of these, transportation has become much easier and more quick. They encouraged international trade, which resulted in intermixing of the people belonging to various countries and thereby increasing feeling of sympathy and mutual co-operation.

(iii) Development in the Means of Communication:

Means of communication have been developed through telegraph, telephones, wireless, newspaper, radio and television. These led to mutual exchanges between different cultures.

(iv) Introduction of New Agricultural Techniques:

Quality and quantity of agricultural production improved with the use of new agricultural tools, (like tractors, water pumps, thresh­ers etc.) fertilizers and better seeds. Now agriculture is becoming a commercial occupation and is no more substance activity of the farmer and his family.

The result of these new techniques is to increase an all-round increase in production with fewer people, which resulted the people to shift themselves from farm to the factories or to the trade, in search of other jobs.

Merits of Factory System:

1. Better quality products are available.

2. Wider varieties are manufactured.

3. Less wastage.

4. More efficient employment of land, labour and capital.

5. Higher standard of living.

6. Less unit cost.

7. Increased employment as demand of products increases rapidly.

8. Cultural and social development of workers due to centralization of most of the indus­tries at a place.

9. It reduces training period.

10. Higher rate of production.

11. It yields by-products, which can be used to produce subsidiary products.

12. Goods receive revenue in the form of taxes, duties etc.

13. It helps to a very great extent in defence production.

14. It helps in the advancement of nation as a whole.

15. It helps in the development of international trade.

Demerits of Factory System:

1. It creates monopoly of work.

2. Responsibility of work cannot be fixed on a particular individual easily.

3. It causes over-crowding, unhygienic atmosphere, low wages etc. This all is known as “Evils of factory system”.

4. It results in the concentration of wealth in few hands.

5. It causes exploitation of labour and class conflict.

6. It needs large amounts to be spent on competition and advertisement.

7. It may cause over-production.

8. Cottage and small scale industries may suffer.