The Decline of British Industrial Dominance

By the late 19th century, British industrialists found themselves facing unprecedented challenges to their once-uncontested global dominance. As competition intensified, manufacturers increasingly turned to cartels, trusts, and trade associations to maintain profits and control markets. In 1879, tea shippers agreed to limit the tonnage of vessels engaged in the China tea trade, ensuring full cargoes for all participants. This marked the beginning of a trend that would reshape European industry.

British manufacturers faced particularly fierce competition from American innovations in tobacco, salt, and sewing machines. To counter this threat, British producers and retailers began forming strategic alliances. The turn of the century saw the merger of Imperial Tobacco with thirteen major companies, creating an entity that soon controlled over half of Britain’s tobacco sales. Similarly, in 1906, eleven regional soap manufacturers consolidated into Lever Brothers’ “soap trust,” which by 1910 commanded about 60% of Britain’s soap production and distribution.

These decades witnessed the birth of many enduring consumer brands across food, beverages, and light industries. Chocolate giants Cadbury and Fry emerged alongside Lever Brothers’ household staples like Lux and Vim. Meanwhile, British coal production surged from 110 million tons in 1870 to 290 million tons by 1913. Ironically, even as Britain’s manufacturing supremacy waned, it became Europe’s leading exporter of this crucial industrial fuel.

Germany’s Ascent in Chemical and Electrical Industries

While Britain struggled to maintain its industrial leadership, Germany surged ahead in two critical sectors: chemicals and electrical engineering. German chemical research became world-renowned, attracting British chemists who sought training at German institutions. The Solvay process, invented in Belgium in 1861, revolutionized soda production, and German-born industrialist Ludwig Mond adapted it for large-scale manufacturing.

A serendipitous discovery by British chemist William Perkin, working with German colleague August Hofmann on malaria treatment, yielded the first aniline dye (named “mauveine” for its color). Though Perkin patented his discovery, mass production only became feasible after French chemist Antoine Béchamp developed methods for reducing aniline and batch production. In 1865, BASF (Badische Anilin- und Soda-Fabrik) was founded in Ludwigshafen, developing similar processes using coal tar imported from Britain – an ironic twist, as British industrialists had failed to recognize its potential.

The German chemical industry’s growth was staggering. By 1913, German firms accounted for 28% of global chemical exports compared to Britain’s 16%. In synthetic dyes, Germany dominated with 90% of world exports versus Britain’s mere 2%. Companies like BASF employed hundreds of scientists, reflecting Germany’s strong emphasis on technical education.

In electrical engineering, German firms similarly outpaced British competitors. Werner von Siemens built a fortune on his needle telegraph system, while his brothers expanded the business globally. By 1913, Siemens employed 75,000 workers in Germany and 24,000 abroad. German electrical firms produced 75% of the nation’s electrotechnical products, with AEG (Allgemeine Elektricitäts-Gesellschaft) adapting Edison’s patents for European markets.

The Second Industrial Revolution Spreads Across Europe

Other European nations also challenged British industrial leadership during this “Second Industrial Revolution.” Italy’s industrial takeoff was particularly remarkable in electrical power generation. Between 1897 and 1913, Italian industry grew at an annual rate of about 5%, with electricity production expanding by 15%, chemicals by 13%, and steel by 11%. By 1914, Italy’s hydroelectric capacity reached 1 million kilowatt-hours, with 90% directed to industrial use.

Scandinavian nations similarly leveraged their natural resources. Sweden’s annual electricity generation reached 550,000 kilowatt-hours by 1915, while Norway’s output doubled from 200,000 kilowatt-hours in 1908 to 400,000 by 1912. These countries effectively skipped the coal-based industrialization phase, moving directly to advanced power technologies.

Meanwhile, Austria-Hungary struggled to keep pace, constrained by German economic dominance. Without Germany’s access to cheap sulfuric acid byproducts from metallurgy, Austrian firms had to import expensive pyrites from Spain. The empire remained primarily a supplier of raw materials, exporting eleven times more timber than pulp or cellulose between 1904-1914.

The Social and Urban Transformations of Industrialization

Europe’s industrial revolution precipitated dramatic social and urban changes. Between 1850 and 1900, the agricultural workforce shrank from 52% to 42% in France, 75% to 60% in Italy, and about 60% to 35% in Germany. Britain’s lead in industrialization showed in its figures: just 22% worked in agriculture in 1850, falling to 9% by 1900.

Cities expanded at unprecedented rates. Duisburg in Germany’s Ruhr region grew from 7,000 inhabitants in 1831 to 93,000 by 1900. Berlin’s population soared from 172,000 in 1800 to over 2 million by 1914. Similar growth occurred in Budapest (270,000 to 880,000 after the 1873 unification of Buda and Pest) and Lisbon (242,000 to 435,000 between 1880-1910).

This rapid urbanization created severe public health challenges. In Hamburg, unfiltered water from the Elbe River sometimes contained small fish, while St. Petersburg’s water supply remained dangerously contaminated. The Ruhr River was described in 1911 as resembling “black beer, smelling of hydrocyanic acid, completely devoid of oxygen – a dead river.”

The Birth of Modern Urban Infrastructure

Cities responded to these challenges with ambitious infrastructure projects. London’s sewer system, built between 1858-1865 by Joseph Bazalgette, became a model of civil engineering. Berlin constructed sewage treatment plants under James Hobrecht’s direction, while William Lindley designed water and sewage systems for Hamburg, Frankfurt, Warsaw, and other cities.

Urban renewal projects also transformed cityscapes. Georges-Eugène Haussmann’s radical redesign of Paris (1853-1870) replaced medieval alleys with grand boulevards, simultaneously improving sanitation and making the city less susceptible to revolutionary barricades. Similar projects reshaped Budapest, with Andrássy Avenue (1872-1876) and Heroes’ Square creating a modern capital worthy of Hungary’s national aspirations.

The Emergence of the Bourgeoisie

Industrialization created a new urban middle class – the bourgeoisie. In Sweden by 1900, this group included 15,000 merchants and industrialists, 4,700 engineers, 7,000 civil servants, 7,600 teachers, and 3,300 doctors and pharmacists. Professional associations and social clubs proliferated, creating networks that transcended traditional class boundaries.

The legal and medical professions expanded dramatically. England and Wales saw their “professional and civil service” class grow from 200,000 in 1851 to 560,000 by 1891. Germany’s medical students increased from 1,600 in the 1840s to over 5,000 by 1882. Engineering experienced particularly rapid growth, with England and Wales going from 900 engineers in 1850 to 15,000 by 1890.

The Legacy of Industrial Transformation

By 1914, the economic landscape of Europe had been fundamentally transformed. Germany had surpassed Britain in key industries through superior technical education and industrial organization. Other nations like Italy and Scandinavia had carved out specialized niches in the new industrial order.

The social consequences were equally profound. Urban middle classes gained economic and political influence, while cities developed modern infrastructures to support their growing populations. These changes set the stage for the 20th century’s economic and political developments, even as they created new tensions that would soon erupt in global conflict.

The late 19th century thus stands as a pivotal period when Europe’s industrial leadership shifted, when modern urban life took shape, and when the social structures of the contemporary world began to emerge from the crucible of rapid industrialization.