How or why some agrarian societies have evolved into industrial states is not always fully understood. What is certainly known, though, is that the changes that took place in Britain during the Industrial Revolution of the late 18th and 19th centuries provided a prototype for the early industrializing nations of western Europe and North America. Along with its technological components (e.g., the mechanization of labour and the reliance upon inanimate sources of energy), the process of industrialization entailed profound social developments. The freeing of the labourer from feudal and customary obligations created a free market in labour, with a pivotal role for a specific social type, the entrepreneur. Cities drew large numbers of people off the land, massing workers in the new industrial towns and factories.

Later industrializers attempted to manipulate some of these elements. The Soviet Union, for instance, industrialized largely on the basis of forced labour and eliminated the entrepreneur, while in Japan strong state involvement stimulated and sustained the entrepreneur's role. Other states, notably Denmark and New Zealand, industrialized primarily by commercializing and mechanizing agriculture.

Although urban-industrial life offers unprecedented opportunites for individual mobility and personal freedom, it can exact high social and psychological tolls. Such various observers as Karl Marx and Émile Durkheim cited the “alienation” and “anomie” of individual workers faced by seemingly meaningless tasks and rapidly altering goals. The fragmentation of the extended family and community tended to isolate individuals and to countervail traditional values. By the very mechanism of growth, industrialism appears to create a new strain of poverty, whose victims for a variety of reasons are unable to compete according to the rules of the industrial order. In the major industrialized nations of the late 20th century, such developments as automated technology, an expanding service sector, and increasing suburbanization signaled what some observers called the emergence of a postindustrial society.