In its early history Laird's had been a pioneer of new technologies. Under the direction of the brothers of the third generation its yard retained its high reputation, but by the last decades of the century there was unmistakeable evidence that the company was falling behind. To some extent this may have been due to the ageing of a narrowly confined top management, but it partly resulted from deficiencies of location and site. Only a programme of yard reconstruction, and new structures of supply and control involving a major amalgamation, would be able to break these limitations; both had to wait until the early twentieth century.

The years that followed the US Civil War were ones of further dramatic change in shipbuilding. As iron construction became more important, the formidable US competition in merchant shipbuilding, which had characterised the days of wooden construction, faded and died. At the same time, as they turned to the peacetime development of their home economy, the pioneering work that Americans had done in armouring and arming warships fell into the background and the role of innovator in the design and construction of naval vessels passed back to the Old World. External factors changed and these changes had important effects. An outstanding example was the opening of the Suez Canal in 1869, which, because sailing ships could not navigate the new route, gave a tremendous fillip to steam construction.

With a massive home demand from its shipping companies and the advantages of well developed coal, iron, steel and engineering industries, the UK was in a position of unrivalled advantage to meet the needs of the times.