As Europeans interacted with other regions, they adopted new agricultural techniques, such as the three-field system of crop rotation, and foreign agricultural technologies, such as iron plows, watermills, and horse harnesses. These innovations increased crop production and population sizes in Europe.
While the traditional feudal economy was solely based on agriculture in the countryside, a new pre-modern economy was evolving by 1100 C.E. During the early medieval period, the old Roman towns decreased in size. Now, after centuries of decline, increased trade began to stimulate the growth of commercial cities in the heart of Europe. Most often located on riversides, these towns grew into marketplaces and adopted foreign financial innovations, such as banks and bills of exchange. Some representative examples of these new urban centers included:
Bruges: Located on a river system that connected the North Sea with Central Europe along the Rhine River, its cross-channel trade brought raw wool from England which was converted into clothing to sell.
Hamburg: A major port on the North Sea. Hamburg was part of the Hanseatic League, an alliance of trading cities and their merchant guilds, which controlled trade along the Northern European coast. The League regulated taxes and created rules for fair trade among the member cities.
Florence: This central Italian city controlled the flow of goods through the peninsula. Called the Republic of Florence, this city-state became a center for banking and commerce by 1300 C.E.
Service providers and craftspeople set up businesses in these towns, further stimulating growth. Among those providing services were barbers, blacksmiths, coopers (barrel makers), jewelers, leatherworkers (tanners), innkeepers, and merchants of beer and wine. These cities began to plan their growth, regulate business, and collect taxes. Wealthy towns in Italy invested in new buildings and statuary for beautification.