How did the Industrial Revolution shift the world's balance of power?

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Prior to the start of the Industrial Revolution, near the end of the eighteenth century, the most powerful countries in Europe (and in the world overall) were Britain and France. The United States had just achieved an independence that was considered tenuous by the European powers: many did not believe this experiment in democracy would succeed.

It's partly a coincidence that, just at this time, the French Revolution began and threw Europe and much of the rest of the world into political and social turmoil, continuing with the Napoleonic wars, which followed and were not concluded until 1815. These upheavals changed the power structure in Europe, but they did so partly in a way that actually counterbalanced the effects of industrialization.

This is because Russia became a major power in Europe, despite the fact that, for the next hundred years, it continued to have less industry than the Western European countries. At the same time, however, industrialization became as rapid in the German states as in Britain and France. The economic wealth created by industry was one factor that enabled the unification of Germany in 1871. Now, the major world powers were Britain, France, Germany, Russia (in spite of Russia's still mostly agrarian economy), and the United States. Within the United States, industrialization in the North was partly, if not mostly, what enabled its victory in the Civil War. So, during the period from 1789 to 1865, the balance of power within the United States had shifted from more or less equality between North and South to dominance by the North. With the Union victory, the United States became a major world player, rivaling and eventually surpassing the European powers.

Apart from Russia, those countries which had not achieved industrialization, such as the Ottoman Empire and China, fell behind. Ottoman Turkey became a quasi-client state, first of Britain, and then, as World War I approached, of Germany. China came under the economic dominance of Britain, as did most of Asia, either through direct colonization (in India) or through the economic leverage Britain asserted. Japan did not became a world power until the modernization of its military and the industry it began to develop in the late nineteenth century. All of these power shifts, whether or not they were the ultimate result of the Industrial Revolution, set the stage for the two world wars of the twentieth century and the subsequent developments leading to the situation existing in the world today.

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