This paper examines technological change in Britain over the last 140 years. It analyzes the effects of patent laws and innovation prizes that were designed to promote technical progress. It explores the challenge associated with the changing organizational structure of innovation and the shift from independent invention to R&D activity taking place inside the boundaries of firms. And it also studies the development of British industrial science in universities and efforts to promote innovation through the formation of industry clusters. Overall, the evidence supports the traditional story of British failure in generating large payoffs from technological development. Although from the early 1970s Britain experienced a revival in the quality of innovation and improved productivity growth, structural weaknesses in the commercialization environment still remain.