What factors led up to Germany becoming an industrial power?
Germany started its move towards industrialization by increasing food production. This led to an increasing rate of rural to urban migration. This translated into increased labor supply in the industrial towns.
Germany enforced an advanced level of protectionism through the Zollverein. The Zollverein, which was basically the Customs Union, was responsible for tariff regulation within territories formed by the coalition of German states. The Zollverein eliminated trade barriers in a variety of industries. This started with the textile industry, which led to its growth.
Germany made investments in its transport infrastructure by building a robust railway network. This expanded the market for the country’s products and services. An increasing market size led to the increasing need for more energy to drive the vast economy. This forced Germany to increase investments in coal production to provide the highly needed energy.
The end of feudalism and serfdom in parts of Germany, especially the southern side of the Rhine Valley helped end restriction to industry and commerce. This was achieved by liberating access to resources essential for industrialization.
Germany also developed a robust banking system that offered essential monetary services and general financial guidance to the emerging industries.