Alright. I'm not a historian, but it's very rare that I can contribute to this subreddit, so I'll go for it. What I want you to keep in mind is that I don't have a comprehensive, holistic education on this reaped from many sources. In fact, I'm only going to use one: The economic consequences of the peace by John Maynard Keynes. I think it's available for free on Amazon as a kindle file. If not, it's the best $2 you can spend today.

So the first reason has got to do with population growth. In 1870, the population of Germany was 40 million. By 1892, it was 50 million. By 1914 it was 68 million. This rising population saw Germany's economy transform from a agrarian one to an industrial one. Much of this growth was required and spurred on by this population growth, as unemployed people would not be good for society.

The next was the output of German coal. Th output grew from 30 million tones in 1871 to 190 million tones in 1914.

With manpower and energy, Germany, ideally situated between England and France on the West and the Austro Hungarian Empire and European Russia on the East, became a crucial fulcrum to the European economy. Britain would export more to Germany than any other country than India (and that too to take advantage of colonial restrictions and price controls to make a profit off the Indian people, but I digress) and imported more than from any country other than the United States ( Already a booming economic power, but located on the fringe of European worldview).

Germany also had a lot of capital available. Keynes says this had to do with a high level of income inequality making lots of capital for investment available (this point is one of the reasons I love this book). Of the $6.25 bn of foreign investments made by Germany before the war, $2.5 bn went to countries East of the Rhine, which Keynes argues brought it into the 'German industrial orbit.' I'm not very certain what exactly he means by that, but I'd wager it means those countries would come to trust Germany and trade with her (him?) in larger and larger quantities.

Of particular interest also was the nature of the trade relations of Germany. Germany's main import was raw materials such as cotton, raw leather hide, cereals etc. However, about 40% of its exports was composed of iron goods, machinery parts, coal and coke, cotton good and woolen goods, which Keynes notes were the same sectors the British competed in. Rising German exports would negatively affect British trade. Also on the topic of cereals, Britain and France would depend on the New World for imports, which by the 1900s was becoming rarer as domestic demand met total supply. Germany met her cereal imports from Russia and Romania, a source which was much more secure.

So Germany's availability of coal and labour, it's central position in continental Europe, it's work ethic (physiocracy never reached Germany), her foreign policy and investments helped Germany militaarize more effectively. In fact, in 1919, when Parisians were celebrating the armistice, the iron badges pinned on their shirts were German imports. The British economy fared much better. But the Edwardian era, though the gilded age, saw Britain's GDP drop behind several nations including the USA and Germany. There was an interest in leisure over entrepreneurship. So while London was still extremely powerful, it was already in decline. The First World War saw Britain forcefully reallocate resources to increase its output of munitions and other weaponry. It also sank into heavy debt with the US.

So what was the turning point when Britain lost it's industrial edge to Germany and the US? That you'll have to ask a qualified historian. But I hope this answer helps provide some input into the reason for Germany's ascendancy.