keep in mind that while there are techs that improve factory output efficiency, IIRC there are no techs that improve artisan efficiency, so the more the factories crank out, the lower the profit-margin will be for artisans in a given production line, and they'll either devolve into craftsmen or farmers/labourers or move to another line (like some new technological wonder that hasn't proven its profitability in game yet, making capis skiddish to start building factories.)
Now, in non-industrial societies, the spread of factory production is going to still effect the artisan class because the global market price will drop, thus making the artisan production unprofitable and resulting in devolution to farmer/labourer (as historically happened in non-industrial colonial and semicolonial societies), barring the use of tariffs to raise cost of imports to consumers (and thus protecting artisan production, which is why the British insisted on free trade agreements in the mid-19th C). At least that is what the Paradox model aims for as far as I understand it.
Now, in non-industrial societies, the spread of factory production is going to still effect the artisan class because the global market price will drop, thus making the artisan production unprofitable and resulting in devolution to farmer/labourer (as historically happened in non-industrial colonial and semicolonial societies), barring the use of tariffs to raise cost of imports to consumers (and thus protecting artisan production, which is why the British insisted on free trade agreements in the mid-19th C). At least that is what the Paradox model aims for as far as I understand it.