Technical change and industrial organization, despite the failure in obtaining significant correlation by recent multiple regression studies, have long been closely connected. This article examines late nineteenth century iron and steel industry to highlight this relationship, and the consequent change in international cost competition. The innovation and diffusion of steel technique depended on chemical content of ore and fuel locally available, the growth and composition of demand for final products, and the vested interest of the industry. It is not, however, the choice of specific techniques in each production process per se but the organization of industry encompassing them that lowered the cost and brought about international superiority. Technical change and industrial organization have a symbiotic relationship, manifested by particular interaction as circumstances vary. In iron and steel during the period when monopoly capitalism emerges, the chain reaction of technical choice, industrial organization and technological innovation favored economies with monopolistic market structure. Likewise, mass production technologies shaped later development of monopoly capital.