Final answer:
During the second phase of industrialization, capital investment came from private investors, including venture capitalists, as well as indirect governmental investments in public infrastructure. These investments, alongside the development of human capital, were crucial for the growth and transformation of industries.
Step-by-step explanation:
The main source of capital investment during the second phase of industrialization was a combination of private investors, which included wealthy individuals, banks that specialized in investment capital, and groups of shareholders. Notably, a particular type of private investor, the venture capitalist, played a crucial role by providing high-risk loans to startups, betting on the potential of these emerging companies. During this period, governments also became an important indirect source of capital by funding infrastructure developments such as highways, airports, and educational institutions which helped in maintaining and promoting business growth.
Besides financial capital, the growth in labor productivity and GDP per capita was significantly influenced by the investment in physical and human capital. After the destruction caused by World War II, European countries demonstrated the resilient power of human capital and technological knowledge in rebuilding their economies to even greater heights within just a couple of decades.