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Industrial development

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The Czech provinces experienced an unparalleled economic boom in the second half of the 19th century.

photo: (sxc.hu)

If until then the states of the Austrian monarchy were rather on the periphery of modern industrial civilization, during the period we are discussing they were already among the regions with the most developed economic systems in Europe. Considerable natural resources, in particular abundant black coal deposits, a high population density and probably the densest railway network in Europe were the decisive factors that made the Czech provinces the industrially most interesting region of the monarchy. Its production volume and quality were comparable with the most developed countries of Western Europe.

For instance, 60-70% of the entire industrial production of the Austrian-Hungarian monarchy was concentrated in the Czech provinces at that time. A typical representative of the new economic elite of that time was an entrepreneur of Austrian origin, Emil Škoda. In 1869, he purchased a small factory in Pilsen from Count Wallenstein, and in a few years he turned it into a first-class machine factory, the products of which successfully competed on the demanding markets of Western Europe. Škoda thus founded a company that, despite various political tumults, multiple changes of ownership, nationalization and then privatization, has survived to date, keeping up with state-of-the-art technologies in its field. (today's Škoda holding).

The constantly expanding large-scale production could not prosper without sufficient capital. Since the private funds of individuals, either enterprising aristocrats or new members of the business elite, could not by themselves cover major capital projects, the financial sector began to develop as well. The first basis was formed by credit unions, and later the classic investment banks became the leading players. Economic life required a legislative governance of business entities; the stock company (or corporation) has since then played the greatest role. The economic expansion also accelerated due to a quality education system.

In contrast to England, the cradle of the Industrial Revolution, where all knowledge and skills were gained by practice, in the Czech provinces (and similarly in Germany), the emphasis was always placed on perfect theoretical preparation. The investments in education undoubtedly paid off in the form of many technical inventions and a qualified labor force, which was able to enrich industrial production efficiently.

The early phase of industrialization was connected with textile production, situated in the border areas populated mainly by German nationals. In the inland regions, where the Czech nation prevailed, agriculture was mainly developed (in particular the growing of grain, sugar beet, and hops), followed by food processing, in particular sugar production and brewing. Major industrial centers in Pilsen, Kladno and Ostrava concentrated on machine production and engineering, chemical industries and the mining of raw materials, in particular black coal.

The late 19th century was marked by the onset of new technologies – combustion engine and electric systems. This period is sometimes referred to as the second industrial, or scientific and technical revolution. Some of the most significant Czech inventors of that era include Josef Ressel, the inventor of the screw-propeller; the Veverka cousins, who invented a turning plough, an advanced form of plough that not only ploughed but also turned the soil; and the inventor of the water turbine, Viktor Kaplan, Professor at Brno Technical University. František Křižík, called the Czech Edison, reached extraordinary importance. This inventor, electrical engineer and entrepreneur invented, among other things, the electric arc lamp, improved the railway safety system and established the first Czech power stations. In 1881, during the Jubilee Exhibition, he launched the first electric tramway. In 1903, he built the first electrified railway between Bechyně and Tábor. However, the period of relative economic expansion was basically only interrupted by the economic crisis of 1873, yet in 1914 it was abruptly stopped by World War I.