You have asked several questions. I will address directly your first one, based on what I have now researched, although this answer also encompasses some of your additional points:
Why did this concentration of arms manufacturing capability take place?
See Skoda Works: (www.globalsecurity.org/military):
Emil Škoda
The fortunes of the Skoda Works were interwoven with those of Plzen
through several generations of employees. The Skoda factories were
founded by Count Wallenstain in 1859. Count Wallenstein-Vartenberk set
up a branch of his foundry and engineering works in Plzen...
Emil Škoda, a highly competent engineering expert and dynamic entrepreneur, became the Chief Engineer of the factory which had more
than a hundred employees...
In 1869 it was taken over by Emil Skoda, the Czech engineer, who employed 130 people. Emil Skoda purchased the factory from Count
Waldstein for 167000 gulden with money borrowed from his physician
uncle in Vienna, Josef Skoda the great Viennese clinician. Skoda had
originally been employed in the iron works of Wallentein (Valdstejn)
in Pilsen...
When engineer Emil Skoda purchased a small engineering works located in the center of Plzen, then a town with a population of 30,000, he
set out on a path leading to the major development of his plant and
fame for Plzen around the world.The coalfields at nearby Nýrany and
local iron-ore deposits gave rise in the 19th century to Plzen's
engineering industry, symbolized by the Skoda Works, which occupy most
of the city's western sector.
By 1914 Skoda was one of Europe's major arms producers. At the Skoda
Works in Pilsen everything was done on an enormous scale - grounds
covered, trip hammers of a hundred tons apiece, 30,000 men toiling and
sweating for good pay; and capital galore. And enormous profits;
during the Great War one of the Krupps became a partner. A Czech,
Baron Skoda, was the brain of the concern, and a number of able German
engineers were the sub-brains.
Based on this account, we see the important factors that led to Skoda Works's enormous success:
- Perhaps some good political connections: The Skoda factories were
founded by Count Wallenstein-Vartenberk of the notable House of Waldstein.
- A highly competent engineering expert and dynamic entrepreneur in the
person of Emil Skoda: Excellent technical knowledge combined with
business acumen in one individual, giving them the ability
to both envision and successfully implement a large and successful
technical/industrial enterprise like the Skoda Works. Supra: Czechs like Emil Skoda and Tomas Bata [the shoemaker] became symbols of the new Czech capitalists. This is an oft-repeated pattern, reminiscent of figures such as Thomas Edison. an American inventor and businessman; Bill Gates, an American business magnate, investor, programmer,inventor; and Larry Ellison, an American business magnate, co-founder and chief executive of Oracle Corporation, among numerous others.
- The close proximity of important natural resources for the business
in question: coalfields at nearby Nýrany and local iron-ore
deposits
- A deep and capable human resource pool suitable for the business: a
number of able German engineers were the sub-brains.
