How peripheral was the periphery? Industrialization in East Central Europe since 1870

The chapter presents a rich quantitative survey on industrial development in the former Habsburg Empire from 1870 to 1914 and its main successor states - Austria, Czechoslovakia, and Hungary - from 1918 to recent times. We provide an index for industrial production from 1870 to 2005, sectoral labour shares for decadal benchmark years from 1870 to 2008 and value-added shares for industry and modern manufacturing between 1955 and 2005. Three conclusions stand out from this evidence. First, even though industrialization in Central Europe had its origins in the mid-19th century, the region has not been able to narrow the developmental gap with the western European core ever since. Second, economic growth in Central Europe has been and still is industry-driven. Third, industrialization has been driven by the rise of modern manufacturing that was key for international competitiveness. State intervention in industrial development has been more prevalent than in western Europe, but periods of strong state management witnessed falling behind not catching up with the European core.