It is probably more nearly correct to state that the Northern states offered more fertile soil for industrialization to grow and prosper than the South. The comments above about slavery are misstated. The Southern economy was indeed agrarian and dependent upon slave labor; however the reason for this is was that the economy in that portion of the country consisted of large scale plantations of staple crops, primarily cotton. It is manifestly incorrect to state that immigrants did not want to move to a slave society. Immigrants to this country came from agrarian economies, and would have preferred to continue that practice, however there was no available land in the South. It was under no circumstances a moral value judgment as the above answer alludes; they remained in large cities and worked in factories because they had no choice.
Slaves were in fact used for occasional factory work, including but not limited to the Tredegar Iron Works in Richmond, Va. Slaves also worked as blacksmiths, shipwrights, gin operators, carpenters, etc. The law of supply and demand , however, dictated that they were primarily used as plantation labor, not factory workers.
Industrialization was possible in the South, and it was indeed industrialized after Reconstruction, yet most of the workers were white; hardly any were former slaves.
Bottom line: industrialization came to the North because the North's climate, geography, etc. did not lend itself to large scale agriculture. Also, the North had an abundance of navigable streams which were absent in the South. The South was more suitable for large scale agriculture, and its economy developed in that fashion. Slavery was a necessary element in maintaining that economy; but it was not a value judgment.
The major economic difference between the North and the South during this time was that the North was a mixed economy with free labor while the South was an agrarian economy based on slave labor. Because of these differences, the North industrialized and the South largely did not.
In the South, industrialization was not very possible. First, Southern capital was tied up in slaves and could not be used to build factories. Second, there was not a good source of labor. Slaves were not generally good for industrial work and free immigrants did not want to move to a slave society.
In the North, by contrast, industrialization was possible. There was plenty of capital and immigrants were happy to come to this area. For these reasons, the North ended up industrializing to a much greater extent than the South did in the Industrial Revolution.