The article presents the historical background and the institutional, political, social and economic effects which were caused by the industrial revolution, that began in England in the seventeenth century. The development of industry that replaced crafts and manufactories, caused the transfer of people from the countryside to the cities. This phenomenon was a direct cause of urbanization in Europe. Urban development and the creation of new social groups, especially the working class, had taken place. The devel-opment of industry and the use of engine production and mass transportation has become a cause of the development of not only the means of communication, but also a network of road and rail connections, which gradually merged to all of the European countries. The development of the railway contributed to the development of international trade with Russia, and by combining rail with Turkey it was also possible to deepen trade with the Middle East. The modernization of agriculture resulted in the use of modern agricultural machinery and equipment, and the development of the chemical industry in the form of fertilizers and plant protection products. The overall increase in the level of economic impact led to the growing importance of the banking sector and social security. At the end of the article some adverse events were also mentioned.
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