Improvements to the steam engine were some of the most important technologies of the Industrial Revolution, although steam did not replace water power in importance in Britain until after the Industrial Revolution. From Englishman Thomas Newcomen's atmospheric engine, of 1712, through major developments by Scottish inventor and mechanical engineer James Watt, the steam engine began to be used in many industrial settings, not just in mining, where the first engines had been used to pump water from deep workings. Early mills had run successfully with water power, but by using a steam engine a factory could be located anywhere, not just close to a water source. Water power varied with the seasons and was not always available.
In 1776 Watt formed an engine-building and engineering partnership with manufacturer Matthew Boulton. The partnership of Boulton & Watt became one of the most important businesses of the Industrial Revolution and served as a kind of creative technical centre for much of the British economy. The partners solved technical problems and spread the solutions to other companies. Similar firms did the same thing in other industries and were especially important in the machine tool industry. These interactions between companies were important because they reduced the amount of research time and expense that each business had to spend working with its own resources. The technological advances of the Industrial Revolution happened more quickly because firms often shared information, which they then could use to create new techniques or products. The development of the stationary steam engine was a very important early element of the Industrial Revolution. However, it should be remembered that for most of the period of the Industrial Revolution, the majority of industries still relied on wind and water power as well as horse and man-power for driving small machines.