This industrial growth is both a byproduct and a necessity of Chancellor Bismarck's plans for Germany's socio-political control of the region. The general feeling in Europe since the Franco-Prussian War was that a general European War was eminent and whatever happened Bismarck wanted Germany to be in the driver's seat.

One important factor for the development of a massive German steel industry after 1871 is the annexion of Lorraine with its coal mines and high quality iron ore deposits.

Though, as others have already pointed out, the industrialization in Germany began much earlier.

The first railroad in what is now Germany was opened between Nuremberg and Fürth in 1835, only ten years after the opening of the world's first public railroad, the Stockton and Darlington Railway in England.

It is certainly no coincidence that the city of Nuremberg was famed for its excellent craftsmanship even in the Middle Ages. [Edit] Cf. Peter Henlein.