Chapter 23: Core Industry

What is the core industry development in Austria?

Franz doesn't have an answer in his heart. The resources of the Austro-Hungarian Empire are still quite abundant, and during the early stages of industrialization, it almost lacked nothing.

Historically, from Austria to the Austro-Hungarian Empire, there was no colonial expansion abroad, which is related to the abundance of domestic resources.

Of course, this is only in the early stages. From a developmental perspective, Austria's domestic resources would not suffice.

Take the steel industry as an example. In the era when various countries had annual steel production of tens of thousands, hundreds of thousands, and millions of tons, Austria was not short of resources. It could barely keep up in the era of tens of millions of tons, but once it entered the era of several tens of millions or even hundreds of millions of tons, it would be difficult to sustain.

This is a long-term issue, but for at least several decades, Franz doesn't need to worry about it.

In theory, the vast majority of industries can become Austria's pillar industries, such as agriculture and agricultural product processing, metallurgy, machinery manufacturing, military industry, railways, shipbuilding, textiles...

This is the benefit of having a solid foundation. Before losing Lombardy and Venice, the industrial volume of Austria was very close to that of France.

It's not surprising. In this era, Austria is a combination of half of Hungary and half of Italy, and Lombardy and Venice alone can account for half of Italy.

Franz would not make the foolish statement that all industries should progress at the same pace. The competition in this world is so fierce that if the government cannot favor certain industries with policies, how can you guarantee to defeat competitors?

Not to mention Austria, even the British, as the only industrialized country in the world, did not develop comprehensively. They focused on the financial industry, shipbuilding, and textiles.

This multiple-choice question is not easy to answer. Once a decision is made, it will be a national policy that remains unchanged for decades, and the country's economic development will change accordingly.

There are many factors that determine a country's pillar industry, including resources, markets, industry advantages, interest groups, national development direction, international situation...

Free economy? Market economy?

These are just words. Don't take them seriously, or you'll regret it.

Any successful country's pillar industry has received policy support, such as tax cuts and the introduction of policies favorable to the industry's development...

Schönbrunn Palace

Franz was taking a walk on the square with Felix, discussing Austria's development direction in passing.

"Prime Minister, where do you see the strategic focus for Austria's future?" Franz inquired.

It's a survival of the fittest era, and expansion is the theme. Since the Vienna system was broken, all European countries entered a new round of competition.

Small countries have no choice but to drift with the tide. For big nations wanting growth, it's like going against the current; they either advance or decline.

The Austrian Empire is essentially at a crossroads. Choosing to align with Russia is Austria's first strategic choice, but this choice is about allies.

Historically, why did the Austro-Hungarian Empire step into the Balkans' powder keg? Was it really a strategic decision mistake as experts comment?

Franz originally thought so, but after being in the situation, he realized he was wrong.

Austria had many opportunities for external expansion, but they restrained themselves. Their ultimate choice to tread on the Balkan mine was not a voluntary decision by the rulers.

Considering the international environment at that time, Franz understood it was a choice out of necessity.

During the world's great conflicts, major powers expanded their influence. Only Austria and Spain stayed still, not catching up with the pace of others.

This meant two sheep had entered a pack of wolves. If they didn't want to be eaten, they needed to disguise themselves as wolves.

Austria occupied Bosnia and Herzegovina, presenting itself as a wolf, which gave them a few years of peace. Spain did nothing, and the Americans noticed this plump lamb, leading to the Spanish-American War.

Without hesitation, Prime Minister Felix responded, "The German regions!"

"Why?" Franz asked.

After pondering for a moment, Prime Minister Felix said, "After annexing the southern German regions, we will share a direct border with France. Although the Franco-Austrian relationship is decent now, the French ambition for continental dominance persists, forcing us to consider our western defenses. Moreover, the Kingdom of Prussia is a threat we cannot ignore. To deter interference from other countries, they would annex northern German regions, leading to a bifurcated Germany.

After unifying the northern German region, Prussia's strength would increase manifold, and their ambition to unify the entire German region would grow."

"What if we divert the problem westward?" Franz questioned.

Austria, with its size, seems formidable. Annexing the southern German states would make it even more so.

By comparison, Belgium, Luxembourg, and the Netherlands seem like easy targets and wealthy ones at that.

"Your Majesty, I fear the Prussians are willing but not able. Expanding westward would mean confronting France, which they can't surpass, and the British won't allow it either," Felix contemplated.

"To ignite this war, we need Prussian ambition and the French interest in the Rhineland. Fulfilling either can spark the conflict," Franz confidently stated.

In a situation where other nations have armies, Prussia is an army that has a nation. Nationalism is awakening. Any provocation could ignite the situation.

If they don't instigate war, couldn't Austria? Austria could collaborate with Prussia against France. The lure of success may be irresistible for the Prussians.

Franz was uncertain about this. The situation seemed to benefit Russia most.

Would it be right to proceed this way? Franz was perplexed. This situation seems to be the most beneficial to Russia.

Felix chuckled, "Your Majesty, I believe the Prussians would be very interested in this proposal. But do they have the capability to swallow this bait?

While Belgium, the Netherlands, and Luxembourg are Germanic nations, they don't admit it and will resist fiercely.

Even if Prussia defeats France with our help, wouldn't the British still support them from behind?

If they can't consume it all at once, there won't be a second opportunity. The moment the Prussians turn against the British and the French, we will stop supporting them."

One word can awaken someone from a dream, but the Kingdom of Prussia isn't the German Empire of later generations. The difference in scale between them is vast; it's impossible for them to have the same strength.

The Dutch population is about 3.06 million, Belgium has about 4.4 million, and Luxembourg about 200,000. Most of these are Catholics. In contrast, the Kingdom of Prussia has about 13 million. Can Prussia really assimilate these nations?

In terms of the combined economic power of the three nations, they are not far off from the Kingdom of Prussia.

Of course, this is just the current comparison of power, and it will change in the future. Regardless of the change, absorbing a rising nationalist nation is not easy.

Franz even believes that for Prussia to annex these three countries is more of a fantasy than for Austria to annex the Balkan Peninsula.

Actually, it's all just wishful thinking.

Without external forces, gradual annexation is possible. But trying to swallow them whole would either lead to rivers of blood or choke the aggressor.

Knowing this, Franz knows what to do. Austria cannot compete with the British, especially in their three core industries. Austria cannot challenge them.

It doesn't matter. Austria can't emulate the British development path. They can only learn from the Prussians, focusing on developing the military industry, railways, manufacturing, and then supplementing it with Austria's strengths in agricultural product processing.

Railroad construction relies on government investment and encouraging private investment. Military industries rely on government funding. In this era, the international market is just a small addition, with Russia being a good customer.

Manufacturing will need to compete in the international market. However, Franz isn't worried. With the Holy Roman Alliance as a big market and Russia as a strong ally, Austria is much stronger than Prussia in history.

Agricultural processing doesn't have many competitors. Austria's major rivals in the European grain market, Russia and the Ottoman Empire, just export grain. Historically, Russia exported wheat and imported flour. It's not a joke; it's a reality of that era.

It's not surprising. Ships took the grain out, and when they came back, they were empty and had to use stones as ballast. Savvy merchants saw a good price for flour in the Russian market and sold it back to them.

Austria has an advantage here. Their competition is the food processing companies of grain-importing countries. This means Austria has a cost advantage from the start.

Austria should prioritize this advantageous industry. Historically, during the Austro-Hungarian Empire, Hungary was Europe's largest flour supplier.

Why isn't the steel industry, which many time-travelers emphasize and even regard as a manifestation of national strength, a core focus?

Just look at the steel demand in that era. Austria produces only a few tens of thousands of tons of crude steel annually, Russia even less, and the UK isn't much better.

The market demand is limited. Even if including pig iron, the demand isn't massive. If the steel industry is made a core industry, there might be a glut of steel in the Austrian market soon.

Rather than that, why not develop railways and the military industry to drive steel consumption? Production will follow market demand.

The steel industry is already ahead of its time. High-tech industries even more so. Except for the military industry, a country's economic model is determined by the market.

This era is a desert for high-tech. Many groundbreaking products, even if developed in labs, cannot be popularized.

Such advanced fields can't be core industries for a country. They can, however, be developed as secondary focus areas, preparing for future technological advancements.