During the late 18th an early 19th centuries when the UK and parts of Western Europe began to industrialize, the US was primarily an agricultural and natural resource producing and processing economy.[106] The building of roads and canals, the introduction of steamboats and the building of railroads were important for handling agricultural and natural resource products in the large and sparsely populated country of the period.[107][108]
Important American technological contributions during the period of the Industrial Revolution were the cotton gin and the development of a system for making interchangeable parts, the latter aided by the development of the milling machine in the US. The development of machine tools and the system of interchangeable parts were the basis for the rise of the US as the world's leading industrial nation in the late 19th century.
Oliver Evans invented an automated flour mill in the mid 1780s that used control mechanisms and conveyors so that no labor was needed from the time grain was loaded into the elevator buckets until flour was discharged into a wagon. This is considered to be the first modern materials handling system an important advance in the progress toward mass production.[34]
The United States originally used horse-powered machinery to power its earliest factories, but eventually switched to water power. As a result, industrialisation was essentially limited to New England and the rest of Northeastern United States, which has fast-moving rivers. The newer water-powered production lines proved more economical than horse-drawn production. However, raw materials (especially cotton) came from the Southern United States. It was not until after the Civil War in the 1860s that steam-powered manufacturing overtook water-powered manufacturing, allowing the industry to fully spread across the nation.
Thomas Somers and the Cabot Brothers founded the Beverly Cotton Manufactory in 1787, the first cotton mill in America, the largest cotton mill of its era,[109] and a significant milestone in the research and development of cotton mills in the future. This mill was designed to use horse power, but the operators quickly learned that the horse-drawn platform was economically unstable, and had economic losses for years. Despite the losses, the Manufactory served as a playground of innovation, both in turning a large amount of cotton, but also developing the water-powered milling structure used in Slater's Mill.