1. Ok, lets start with industrialization. Industrialization did a lot of good but also a lot of bad. The number and quality of goods was never better. Also the countries got a lot richer. But poor were still poor and people worked in bad conditions. As we said a lot of goods were being produced and for those goods you need the raw materials as well as new markets where you would sell those goods. That's when colonialism gets into the picture as it solves both of these problems. You have a new source of raw materials you don't have to buy and also a new market where you can sell the finished goods.
2. Nationalism also ties in to this story as well all the big countries wanted their share of the cake. That is they wanted colonies for their own people. As more and more countries got colonies the sense of nationalism also rose as you had the conquerors and oppressed. So the sense of pride of the conquerors rose. Also the sense of nationalism grew higher as the countries competed with one another, and the identification with the country become stronger.
3. Here we come to racism. We already mention the conquerors and the conquered. This did not only give rise of nationalism but also of racism. The Europeans believed themselves more sophisticated and more advanced than the peoples they conquered. The native people were barbaric and inferior according to them and it was the Europeans duty to civilize them. Thus this was one of the reasons for colonization.