Russia lacked capital - the currency was linked to the silver standard and as such was unstable. This meant that investment in Russia was not an attractive prospect for foreign investors. Internally, the Russian middle class was too small to invest significant amounts of money.

Russia lacked human capital/skilled workers - Tsarist Russia consisted largely of peasants - 80% or more according to some figures. These peasants were ill-educated (and therefore unsuited to industrial work) and incredibly conservative - they were resistant to change.

Russian agriculture was poor - For industrialisation to occur there must be a surplus of food. A surplus enables some people to give up farming and move to the cities instead. Russia was not able to produce a consistent surplus of food since the peasants were engaged in highly inefficient strip farming. In strip farming, peasants were allocated a strip of land in an open field which might be reallocated to a different peasant a few years later - because the land was not theirs to keep, there was little incentive for peasants to improve the land (using machinery and fertilisers). Russian farmers only ever grew enough food to feed themselves, meaning there was no surplus to support growing towns and cities. To compound this problem, Russia was experiencing a huge population boom placing even more pressure on the under-productive land.

Russia had a poor infrastructure - Until Finance Minister Vyshnegradsky initiated the construction of the trans-Siberian railway, Russia's railway system was underdeveloped. Good infrastructure was necessary for transporting fuel and resources to factories, goods from the factories, and food to the workers in the factories.