From Nick Szabo's Unenumerated blog:
Before book consciousness there had been no national languages, but only a range of often mutually incomprehensible dialects and in Western Europe the language of the tiny literate elite, Latin. With newly unified national vernaculars, organizations were able to coordinate and grow in an unprecedented manner. A much larger group of people, raised on the same written language, increasingly also came to look and speak similarly and become far more mutually trusted. It was the birth of national loyalty and nationwide webs of trust. The "tribe" to which we are instinctively loyal vastly increased in size.
The pool of already somewhat trusted "same tribe" people from which a bureaucracy could recruit new members vastly increased. National polities and militaries were able to coordinate political, economic, and battlefield strategies in an unprecedented manner. The 16th century saw the first major growth of the joint-stock corporation, enabling far more capital to be invested in the enlarging organizations that engaged in mining and manufacture as well as government and conquest. This development is probably a response to the new ability to form larger organizations, since the basic ideas (corporate law, shares of stock, etc.) had already been in use in Europe for quite some time.
Going along with this was the emergence of "national bards," beginning with Dante, who made the Florentine dialect the national version of Italian.
Europe ended up with a bunch of mid-sized nation states united by language, which proved about the right size for many tasks. Unfortunately, Europe's nation-states proved most effective of all at self-sacrificial war, and mutually exhausted themselves in WWI, discrediting nationalism, which had otherwise proved the most effective framework for human progress. (Similarly, the Chinese progressed the fastest during the Warring States era, which ended with the formation of the Empire 2200 years ago.)
In contrast, the Arab world shunned printing presses for hundreds of years. And, due to the sacred nature of the Arab language, the rise of national languages was largely prevented. So, the Arabs didn't really develop the nation-state. The pan-Arab or pan-Islamic caliphate remained attractive in theory, while, in reality, tribal and family struggles occupied their energies.