James Watt, the Scottish inventor, mechanical engineer and inventor of the steam engine, has a place secure in history as a prime force behind the Industrial Revolution.
Obviously his invention was not the sole factor for the rise of the Industrial Revolution, nor was he alone in translating his game-changing idea to reality.
In fact, it was touch and go for the steam engine’s development and existence for quite a long time.
His story is related in Vested Outsourcing’s Chapter 5 – ‘Game-Changing Economics’ – in a section on the economics of innovation. Watt’s experience is a classic illustration of the principle that incentives and rewards are motivators and instigators of innovation.
Watt began to repair equipment at the University of Glasgow in 1758; five years later he began working on his first Newcomen steam engine and he produced an improved working model in 1765.
But he lacked the funds to build a full-scale engine. Eventually he joined forces with John Roebuck, the founder of Carron Iron Works, who invested in Watt’s ideas. Roebuck hoped for a greater return on his investment; without that investment the steam engine project likely would have died. They were collaborating to achieve a win-win. Eventually, after a lot of money was spent, the ground-breaking Patent No. 913 was issued in 1769.
Watt worked on various prototypes but became strapped for resources when Roebuck went bankrupt. What most don’t know is that Watt had to work as a surveyor until he managed to get a patent extension in 1775. Watt’s ability to get a patent extension was key – because it caught the eye of Matthew Boulton, a rich manufacturer who owned the Soho foundry works near Birmingham, England. Boulton and Watt formed a successful partnership with the desired outcome to complete and commercialize the modern-day steam engine. That partnership lasted for the next 25 years. The rest as they say is history.
Watt’s tireless efforts eventually paid off, but he could not have succeeded alone.
The lessons today and for Vested Outsourcing are clear. Generally speaking, innovation is not possible without the hope of a potential reward. And collaboration, patience and trust with an eye always on the desired outcome lead to success when capabilities are matched in harmony (Watt with his brainpower/Boulton with his financial resources)
Often an idea, like a steam engine is not instantaneously recognized as the seminal event that it is or should be or will ultimately become. It takes vision, savvy risk takers and resourceful innovators (and innovators with resources!) to make the vision into something people will look back upon years later and say: “That was when the game changed.”
That’s why Watt’s intrepid experience with his steam engine has great resonance for the next level of outsourcing. His was an early example of ‘What’s in it for We’ thinking. And thanks to Parliament’s Patent extension – Watt was able to provide hope for a solid return on investments for Boulton if they could work together to succeed. Isn’t that what drives innovative thinking – a hope of a return on investment in exchange for the risk of your efforts and financial resources? This is why I believe James Watt would understand and endorse Vested Outsourcing.