However the importance of Agriculture must not be ignored as this was one of the preconditions to German industrialisation. In 1914 it still employed 10million people, whereas Industry employed 11million. During the 1870s agriculture had experienced good growth, however it was in the 1880s that the most productive periods were reached. This was due to the mechanisation of agriculture, this was aided by improved methods, fertilisers, and the arrival of electricity on the farms, by 1914 some 289,000 electrical threshers were in use. Between 1890 and 1914 the number of machines on farms increased by 4. The importance of agriculture was paramount, but despite reaching these high levels by the 1880s yields did not improve from this point on. Agriculture had become a burden to industry in Germany after the protectionist tariffs of 1878, and struggled to feed Germanys growing population. During the 1880s cheap corn flooded Europe from America caused by the revolution in steam shipping. Germany did not start exporting until the 1900s. Therefore despite high production and providing a large amount of employment in Germany it did not necessarily aid Industrialisation in Germany as grains had to be imported. 
Germany was however aided by its massive population growth. In 1871 the country had a population of 49million, by 1914 this had reached 69million. This high growth was not caused by high birth rates but better life expectancies, and less infant mortalities. Population growth aided industrialisation by providing the important factor of production of labour. This in turn caused huge strains on agriculture as I mentioned before, as it created huge demand for foodstuffs. The creation of this new industrial population also led to the emergence of huge industrial cities, Berlin by 1914 had 3.7million inhabitants, this surpassed Paris. The creation of this population also caused huge political strain as a huge proletariat was created this gave the Socialist Democratic party huge support and made them the largest party in German politics. The architects of Socialist theory including Karl Marx and Vladimir Lenin expected that it was in Germany the Socialist revolution would come. However as the population grew, production grew, and real wages between 1871 and 1914 doubled, therefore revolution was quelled with higher living standards.  This was also good for Germany because the country had been suffering from high levels of Emigration, the Chancellor Caprivi who reigned between 1890 and 1894 had announced, ‘either we export goods, or we export men’. With industrialisation came the retention of these people, and by 1914 31.3million people were employed.
German industrialisation was also greatly aided by the condition it found itself in 1871, together with its natural resources. With the annexation of Alsace-Lorraine a great deal of coal fields were procured, and French indemnity payments after the Franco Prussian war provided money to fund the ‘Grunderzeit’ boom between 1871 and 1873. However Germany did not have good quality natural resources, as ore deposits were of poor quality and so it had to be imported from nations like that of Spain, making German products expensive. The mining industries did flourish though, especially that of coal that by 1894 was annually mining some 100million tonnes, and nearly doubled to 191million tonnes by 1913, this was to be found predominantly in the Ruhr. And made Germany the third largest producer behind the USA and GB in 1914. Textiles also remained important in German industry  especially cotton, but this industry lagged behind the others and predominantly was for internal consumption only. However it was in the 1880s that Iron and Steel production really took off as the Thomas Gilchrist method was patented and used. This allowed German ores to be used, and greatly reduced the costs of German products, and allowed them to become a lot more competitive on the world market. The German mining companies became massive as they discovered the benefits of economies of scale. By 1914 Germany was supplying a quarter of the worlds iron ore making it the 2nd largest exporter, and producing 2/3 of all Continental Europe’s Steel.  The production of iron and Steel was also greatly stimulated by the construction in towns and in the 1880s by the ‘Grunderboom’, this caused by the international need for railways.

Railways were a very important part of German industrialisation. By 1871 much of the infrastructure was in place but it was in 1876 that the system reached its highest peak of investment from this point on it fell. Railways overtook the importance of waterways although shipping remained very important, in 1903 4.1million tonnes were registered at German ports a they were important for importing and exporting goods. The railways helped to open up the coal fields in the Ruhr, and brought goods to the market place. The railways seemed to overcome the German depression between 1873 and 1896, in the 1880s the ‘Grunderboom’ was stimulated by a need for railways abroad in the USA, Africa and Asia. This helped to greatly stimulate German exports of Iron and Steel. Thus the area of railways was a large sector of German industry both providing demand for external export and aswell providing internal demand, and meant an important infrastructure was built that aided industry. Importantly the state remained quite distanced from the railways and allowed private ownership of them.
However it was the alternative industries that really pushed German industrialisation forward, and achieve spectacular growth. The importance of the old mining industries, railways and other old sectors like textile provided capital that was then invested in ‘new industries’. These included the development of chemicals, electricity and new engineering methods. By 1914 chemical growth from the 1880s had been at some 6.2% annually. The government had seen the importance in the 1870s and in 1872 Munich university had more research chemist postgraduates than all the universities in Britain put together. This meant that by the 1890s Germany had a monopoly on information and techniques in the chemicals industry. This sector aided all areas of manufacture and allowed new materials to be developed, supplied the countryside with fertiliser and provided 90% of the worlds dye. Electricity however was the most important sector in German industrialisation, and was the fastest of all to grow in importance. This can be seen as the equivalent of steam to the British in their industrialisation. Electricity integrated with all sectors to improve efficiency and production, by 1911 there were 110 power stations in operation. This in turn helped facilitate the cable, and telegraph communication business in Germany and saw the development of large companies like that of Siemens. By 1914 there were 1million telephone cables, connecting some 1billion calls. Thus it were these new industries that led German industry forward, giving the advantage of being a worlds pioneer in these areas, and dominating these world markets.
Although it is my belief that despite the growth in the old and new industries there was one major force that drove German industrialisation that was the most important. This was the system of capital management that Germany had developed through its’ banking system. In 1881 the Reichbank was formed to oversee German banking this was ‘organised capitalism’. At this time banks got caught up in the euphoria of winning the war against France, and the success of unification. They gave out money to anyone that seemed capital worthy, and massive numbers of joint stock companies were formed. Between 1871 and 1873 in the ‘Grunderzeit’ some 2.7billion Reichmarks were invested in German industry. However by 1873 confidence started to waver and the ‘Grunderkrise’ marked a crash in the speculative boom. Importantly after this the state allowed industry to regulate itself and this led to cartelisation. As Joint stock companies, and rivals joined forces they controlled, price, production and sales. These cartels proved popular in industry and in the recovery of the 1880s they became more aggressive and sort out thee market, by 1910 there were 673. The ‘Grunderzeit’, that then became the ‘Grunderkrise’ also had the effect of forcing many of the smaller firm and banks to go bankrupt. This led to the emergence of 8 super banks that were based in Berlin, these included the Dresdner and Deutsche banks.  These banks set the pace of industrialisation, funding the old industries and later the new industries. There interest in industry became huge in 1914 the Dresdner bank had representatives on some 159 boards, as they wanted to protect their investments. Thus the banks in Germany promoted the actions of entrepreneurs, provided capital for industry in 1914 4billion marks were invested, and set the pace for industrialisation.
Therefore importantly the state remained rather passive in the German industrialisation process. Germany actually seemed to benefit from being industrially backward, as A.Gerschenkron would describe. They could look to their neighbours, import their technologies that worked, and ignore those that did not. They didn’t have to waste time making costly mistakes, instead they could simply invest in sectors like chemicals and electricity that were modern. Thus Germany benefited from not having to overcome a backward system. This allowed the banks and entrepreneurs in Germany to operate in a dynamic fashion. Therefore all the state did in 1871 was to implement he necessary conditions for industrialisation like the adoption of Zollverein trading methods for the whole nation, the adoption of the Gold Standard, uniformed weights and measures, uniform coinage, uniform taxation. Aswell as this interest rates were kept low to stimulate investment. It was really the liberal attitude of laissez faire that dominate the new state, this was only changed when in 1878  Bismarck had to protect agriculture from the threat of cheap grains. We can also see that Germany benefited from not having an Empire to rely on. She didn’t need to import and export selectively but instead had to become competitive and reliant on the world market, allowing her to dominate many of them.
In conclusion Germany had all the factors of production necessary for rapid industrial growth. These were a high amount of labour, the raw materials in the country and capital provide by the banks. This was aided by an infrastructure that was predominantly built up before 1871. This meant that with continued industrialisation, and because of its backwardness relative to Britain, Germany could avoid many of the time consuming mistakes Britain had made and was able to leap in to the new industries. Germany industrialisation was also stimulated by the indemnity payments from the French, and her own natural resources, that were extensively harvested in both the raw materials, and grain fields to make her one of the largest international traders. 

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