ABSTRACT
American imports opened up questions about the technical competence of British machine tool makers. Britain's competitive disadvantage, claimed Churchill, was related to the insufficient scale of production in British machine tool shops, which meant that they could not match the lower costs of American makers. Joseph Horner, a practising engineer, was alarmed about the extent to which 'American machine tool builders had invaded the British market', especially to meet the rapidly growing demands of the booming bicycle industry. The institutional constraints that are highlighted include industrial relations and technical education, enterprise and market organisation, and finance and international trade. Informing this approach is the notion of path dependency, based on the assumption that contemporary entrepreneurs were constrained in their business behaviour by an 'institutional legacy' associated with an 'atomistic nineteenth century organisation'. The empirical investigation of business networks present formidable problems, not least because they are often informal in character and tend to transcend simple economic transactions between firms.