AKA Domestic Industry or PuttingOut System

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Growth of Cottage Industry

• AKA Domestic Industry or Putting-Out System
• Rural household industry
• Main Participants entrepreneur and rural worker

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The Entrepreneur

• Hardworking
• Clever Businessman
• Capital
• Raw materials
• Workers
• Market

3
Rural Workers

• Peasant Farmers
• Supplemented their incomes
• A family would do the work
• Process the raw material and sell to the
  entrepreneur

4
How the Cottage Industry Works

• Entrepreneur hires willing rural workers
• Entrepreneur provides
• Spinning wheel
• Loom
• Raw material

5
Rising Demand

• Cottage workers were paid by piece
• Entrepreneur was the one who prospered
• Increased supply of cloth
• Demand increased more rapidly
• Giving way to the factory system

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Most important Changes of the I.R.

• The invention of machines to do the work of hand
  tools
• The use of steam, and later other kinds of power
• The adoption of the factory system and mass
  production

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TEXTILES

• 1733 John Kay (British) invented the flying
  shuttle
• Doubled the output of hand weavers

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