American railroads – a business network opens up the continent

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Last updated on January 8, 2019

As the business network of the East India Company was getting embroiled in exploitative trades of opium and slaves, another network, far more effective, was being established on the continent of North America. Having won the American war of Independence, the colonies of the eastern seaboard were expanding far into the continent of North America - in all directions. When the technology of railroads eventually arrived, this expansion boomed.

The rapid industrialization and growth of railroads

With the rapid industrialization and growth of railroads, it became possible to mine, establish factories and build all the modern transportation and communication networks that underlie modern commerce today. Besides opening up the entire continent and establishing the United States of America as the pre-eminent industrial power of the 20th century, the railroad network also formed the basis of massive fortunes of tycoons such as Stanford, Pullman and Vanderbilt.

Oil, steel, coal, chemicals, power stations, mining operations, grain and passenger transportation were all greatly boosted by the railroad network. It is fair to say these formed the basis of the modern industrial economy of the USA. The key feature of this business network was the clear enunciation of the positive reinforcement cycle, or flywheel effect, whereby other industries got a boost from establishment of the railroad network, which in turn further benefited the railroad networks themselves.

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About the author  Vivek Sood

I write about "The Supply Chain CEOs", "The 5-STAR Business Networks", and, how to "Unchain Your Corporation". In my work, I help create extraordinary corporate results using several 'unique' supply chain methodologies. Contact me for interesting, high impact projects, or, to get access to my IP for creating transformations using these methodologies.

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