Germany's first machine spinning mill, built in 1784 in Ratingen near Düsseldorf, was called "Cromford" after its famous English predecessor, but it did not usher in industrialisation; instead, it stood alone in the farmland. Germany was fragmented into many principalities which levied customs duties at the borders, they also had their own currencies and units of measurement, all of which made it difficult for a market for mass production to develop.
At the end of the 18th century, mechanised manufacturing began in isolated cases. The textile industry was also a pioneer in Germany, especially in established locations such as the Rhineland, Silesia and Saxony. The first German spinning machine was constructed in 1782 in Chemnitz, an early centre of mechanical engineering. Coal mining and iron processing developed mainly in Upper Silesia, because there the Prussian state took care of modernisation and aristocratic landowners raised capital for investment: The first coke blast furnaces were built and steam engines were constructed in Gliwice before the turn of the 19th century. The English puddling process for steel production was also adopted there at an early stage.
In the Aachen region and in Saarland, both of which were under French rule at the time, coal mining also expanded. At the same time, the first nuclei of the new industries were formed in the farmland along the Ruhr: in 1758, the St Antony ironworks was founded in Oberhausen, from which the "Gutehoffnungshütte", a later giant of heavy industry, emerged at the beginning of the 19th century. The small iron smelter that Friedrich Krupp founded in Essen in 1811 was turned into a global company by his son Alfred, and the engineering factory that opened in Wetter Castle in 1818 developed into the "Demag" group.
Two main factors ultimately led to the industrialisation of Germany: in 1834, 18 principalities founded the German Customs Union on the initiative of Prussia. This created an attractive sales market in a large part of Germany - and when the first train ran from Nuremberg to Fürth a year later, an efficient means of transport was also available. In 1839, a long-distance connection was already opened between Leipzig and Dresden. At the inauguration, an English locomotive was used, although the "Saxonia" had been built and was ready for use in Dresden. Two years later steam locomotives rolled out of the workshops of Borsig in Berlin and Maffei in Munich and a railway boom broke out: Borsig developed into the largest locomotive builder in Europe, and companies were founded in Kassel ("Henschel"), Hanover ("Hanomag") and Nuremberg ("MAN") that made a name for themselves in locomotive and later also truck construction.
Colonialism had a significant influence on the development of the German railway network - an example of how the slave trade and colonial economy stimulated the economies of countries that had no or only small colonies themselves. Already in the pre-industrial centuries, the export of brassware and linen, used as barter goods in the slave trade or to supply plantations, had brought financial resources to capital-poor Central Europe, facilitating later industrialisation. In the 19th century, the owners of the then flourishing sugar refineries in the Rhineland made a decisive contribution to the development of the transport network: In 1839 they began building Europe's first cross-border railway line, linking Cologne with the port of Antwerp, to transport the cane sugar they bought from slave plantations in the Caribbean more cheaply. In 1843, they launched Prussia's first long-distance rail link from Cologne through the then rural Ruhr region to Minden.
From the mid-19th century, the construction of railways fuelled the rapid expansion of the coal and steel industries. Wherever coal was plentiful, the chimneys of the ironworks soon appeared. The Hoesch and Thyssen families of entrepreneurs moved their activities from the Aachen area to the Ruhr. Essen developed into the new centre: there the first deep mining shafts opened up new coal deposits, and the Krupp cast steel factory expanded. The workforce came from abroad or from the Prussian provinces east of the Elbe, where agriculture could no longer feed the rapidly growing population. The villages along the Ruhr grew into towns with overcrowded and dark workers' quarters. On the Saar in Neunkirchen and Burbach, the ironworks also expanded.
Industrialisation spread to other industries: In the Kingdom of Saxony, textile processing expanded alongside mechanical engineering, and in the Berlin area textile factories also multiplied. In Silesia, a traditional stronghold of weaving, there were hunger riots by home workers, which drew widespread attention to the darker side of mechanisation. The chemical factories, which supplied raw materials, profited from the upswing in textile production: In the 1860s, the most renowned German chemical companies were founded in quick succession: the "Teer- und Anilinfarbenwerke Bayer" in Barmen on the Wupper, "Hoechst" near Frankfurt am Main and in Ludwigshafen the "Badische Anilin- und Sodafabrik" (BASF).
The unification of Germany in the Empire in 1871 further accelerated economic growth. Despite the "founders' crisis" of 1873, by the end of the century steel production had overtaken the output of Britain, the mother country of industrialisation. In mechanical engineering, now the largest industrial sector, an epoch-making innovation was developed in Cologne in 1876, partly financed by the trade in cane sugar from slave plantations: The four-stroke engine, originally developed to motorise production in industry and the trades, was to play a major role in automotive engineering in the 20th century.
German companies became world leaders in two key sectors of the "second industrialisation": chemicals and the particularly fast-growing electrical engineering industry, dominated by the "Siemens&Halske" company, founded as early as 1847, and the "AEG". On the one hand, changes in commercial law contributed to this, which increasingly made it possible for banks and citizens to finance investments by buying shares. On the other hand, far-sighted reforms of the education system had an impact: In many places, trade schools had been expanded into technical colleges, and then further research institutions had been founded, especially in the Berlin area, which further stimulated the economy and gained great international recognition.
Duisburg. Matthes & Weber chemical plant