Invention and Innovation in the Watt-Boulton Steam-Engine Venture

It is well known how the Watt-Boulton steam engine freed England and then all nations from the geographic and climatic vagaries of water power and how it permitted man for the first time to concentrate great quantities of efficient motive power in one location. But how did this important transformation come about? What lessons about the economic characteristics of technological invention and innovation can we learn from the steam engine's history? The terms "invention" and "innovation" suggest the conceptual formulations of Abbott Payson Usher and Joseph A. Schumpeter. Crucial to Usher's conception of invention is an "act of insight" going beyond the exercise of normal technical skill, even though additional activities (perception of a problem, setting the stage, and critical revision) are also recognized.' Schumpeter, on the other hand, defined innovation as "the carrying out of new combinations."2 For the case of new technology, this can be identified with reducing an invention to practice and exploiting it commercially. Schumpeter emphatically distinguished his concept of innovation from that of invention.