In this paper, one of the earliest examples of factory system will be presented, namely the silk spinning factory, which thrived in Italy in the XVI-XVII centuries, i.e. a couple of centuries before the Industrial Revolution took place in England. The technology driving the factory was the so-called mulino da seta (silk mill): different types of mulini were developed in different Italian cities, among which the most efficient was the Bolognese silk mill, based on hydraulic driving force. The environmental and economic factors allowing the development of such a technology will be presented in this paper, along with a technical description of the Bolognese silk mill.