"Hindsight is 20/20," as the old saying goes. Looking back at the early 1800s, when the first moves were being made toward steam locomotives and iron railways crisscrossing the countryside, we now can clearly see the economic and social benefit that steam locomotives provided. However, the people living in that time didn't have the benefit of knowing how much cheaper the locomotive would turn out to be, and how much of an improvement over canals and horse-drawn coaches this new technology actually was.
Consider how long the British people lived with the horse and the ship as the main modes of transportation. Horses had been used by the inhabitants of Britain since at least 1,000 BCE, and seaborne transit was almost a no-brained, given the nature of the landmass as an island. Most people knew horses and boats; they knew how to operate them and they knew what to expect from them. By the same token, very few people knew what to expect out of a steam locomotive. You'll recall the image I posted of Richard Trevithick's "puffer" that went along the railway at Penydarren -- no one had ever seen anything like it before that day in 1804.
People weren't certain that mobile steam engines were any better than horses right up until George Stephenson proved the point at Rainhill in 1829. Until that time, most of the railways in Britain were oak logs with a replaceable strip of beachwood nailed on top, set on iron sleepers. The horses walked on tracks of cinders in between the rails of the tramway. And this method worked for quite a few decades before the locomotives came around.
So what changed to make the railways suddenly a more viable option than horses pulling carts to a landing point at a canal, where the barges would float your goods down to market? Well, for starters, the Napoleonic Wars had something to do with it.
The Napoleonic Wars drove the price of horse feed through the proverbial roof. Gavin Weightman makes a stellar point in The Industrial Revolutionaries:
"It is a modern prejudice, it has been said, to imagine horses are a cheap form of power: in reality, the cost of 'running' them could rise of fall alarmingly with the price of hay and oats and the military demand for mounts. (119)"Horses were expensive, and so too were the canals that crisscrossed the English countryside and carried goods to market. The canal companies were businesses as well, and had to charge exorbitant fees if they wanted to offer any dividends at all to their shareholders. Thus mine owners started to consider how they could transport their goods to market at the same or better speed than the canals, with a pricepoint much lower than the one they currently paid.
Even after Trevithick's success at Penydarren, and the dozen or so other collieries that slowly gained steam locomotives, most mine owners still weren't convinced that the machines were better that horses. Oh they accepted that there should be a cheaper way to transport their goods to market than using the canals, but it took George Stephenson's Rocket and his victory at Rainhill to truly prove that locomotives were better.
In 1831, the Liverpool-Manchester line that the Rocket was designed for carried, according to Weightman, "445,047 passengers, 43,070 tons of cotton and other merchandise and 11,285 tons of coal. (134)" Though the passenger total ended swinging back and forth like on a pendulum, the tonnage of merchandise carried by the Liverpool-Manchester line only increased.
By Queen Victoria's coronation in 1837, there were roughly 80 railway companies intent on adding track to the ever-growing rail network across Britain. In a single year, more than 1,000 miles of track were laid down across the English countryside. If any single innovation could be said to drive the Industrial Revolution, these dozens of miles of railway track laid down across England (and soon elsewhere in the world) could be pointed to fairly simply.
So why did the railways develop when they did, at the very base of it? Because of a combination of money, technical know-now, and the ability of financiers to see that this invention could make moving their product very, very easy indeed.
Much of early Steampunk deals with the culture effects of technology as well as the main story the author or authors wish to tell. Case in point is The Difference Engine by William Gibson and Bruce Sterling. The three interwoven stories in that narrative prove themselves as concerned with the effect technology has on the people of Britain as on the main story of discovering what the heck is going on with Ada Lovelace and the cards from the French computer. Michael Moorcock's Warlord of the Air does something similar, as he imagines differences between our world and that of the one Oswald Bastable falls into.
Technology and culture are inextricably tied together, as certain technologies only arise when the surrounding culture is ready for them and not before. A good example is this knowledge: the Romans knew how steam power worked. They had the technology to build a proper engine and set it crisscrossing the Imperial landscape. Why, you may ask, would they not do so and begin an Industrial Revolution in 102 A.D.?
The answer's simple: the technology didn't develop because the culture didn't need it to. Britain in the 19th Century needed the locomotive to develop. This is why that's where it came into being. The end result of all this is a simple question you need to ask yourself when developing a Steampunk world:
Would this technology happen in the culture I've created?
NOTE: An awesome book to read on the topic of why some countries became industrialized and others didn't is Guns, Germs, and Steel by Jared Diamond.