What can Scotland’s AI tech ecosystem learn from James Watt’s steam engine?

At the Scottish AI Summit in March, I spoke about James Watt, the Scottish inventor of the modern steam engine. My talk received such great feedback that I wanted to share it more widely. Although originally aimed at a Scottish audience, what I say applies elsewhere too.

Watt’s innovation supercharged existing steam engine technology to — quite literally — power the entire industrial revolution. It’s seen by some historians as one of the defining moments of this seminal period.

Many distinct parallels exist between Watt’s rocky journey and the current challenges we face in helping AI companies succeed in Scotland, so the inventor’s backstory offers a valuable lesson in how countries should support industry to encourage innovation and scale start-ups faster.

Watt hailed from Greenock, near Glasgow, and his childhood was defined by a fascination with mechanical devices. The Scotsman’s first job was as an instrument engineer in London, a role he held for a year before returning to his homeland, where he took a job repairing very complex astronomical instruments at Glasgow University.

During his time at the uni, Watt was asked to repair a steam engine. Invented in 1712, the Newcomen engine was the leading design of its day, with hundreds produced throughout the 18th Century. Even so, it was inefficient and unreliable — problems he hoped to solve.

To achieve this, Watt secured funding from two financial backers, which quickly depleted with his efforts to secure patents. However, this was only one of the issues that plagued the project. The inventor also struggled to build the product due to the inability of local iron workers to deliver the precision engineering his design called for. His main backer ultimately fell into bankruptcy, and the curtain came down on Watt’s new and improved steam engine — temporarily, though.

An 8-year spell of full-time employment was the only way to keep the dream alive. During this time, Watt’s bankrupt partner sold the patent rights to the English businessman Matthew Boulton. And a remarkable new partnership — which would go on to last 25 years — was born. This inspired a move to Birmingham, England, where Boulton connected Watt with a Welsh precision iron manufacturer with transferable experience in cannon production, leading to the Watt Steam Engine within just two years.

So, what can we learn from Watt’s?story?

Let’s think about Watt as an entrepreneur.

A modern technology ecosystem needs entrepreneurs with ideas, investors, talent, and government support. At the time though, Scotland’s tech ecosystem couldn’t offer what Watt required to succeed. While he had a revolutionary idea with the potential to disrupt an existing market and had secured angel investors to fund that idea, the Scotsman was unable to source the talent to build a working product. This left him with no alternative but to bootstrap for 8 years, which, alongside a partnership with Boulton, enabled the project’s continuation and eventual completion.

Boulton’s introduction of Watt to the Welsh iron manufacturer demonstrates that the best investors don’t just provide start-ups with cash but also experience and expertise, as well as contacts who can accelerate development. It took over a decade for Watt to source the talent to build his product, but once this happened, he was able to commercialise the steam engine within a comparatively short time.

As I said, Watt’s story reminds me of today’s Scottish AI marketplace.

If we fail to invest in great AI business ideas in Scotland, we run the risk of our entrepreneurs leaving for other countries in search of investors with deeper pockets and/or a greater appetite for risk. It’s crucial we foster an environment where investors can easily find and identify ideas in which to invest.

On a macro level, it’s also important to attract inward investment from existing AI companies. Firms with AI talent bring new expertise into the country, augmenting the talent pool our own incredible education system is producing, thus encouraging further inward investment.?

Wouldn’t it be great to see a DeepMind or an OpenAI with an office in Scotland?

Universities are a key part of any successful tech ecosystem, and we’re fortunate to boast some of the world’s leading institutions. For example, The University of Edinburgh’s AI department is renowned globally. The same goes for Life Sciences at the University of Dundee, which undertakes a great deal of AI-powered research. Then there’s phenomenal creativity at the likes of The Glasgow School of Art.

Our universities produce 50% of future talent, so it’s essential they attract and develop as many AI-, data- and design-literate graduates as possible.

Further, we must continue to inform the debate on secondary and further education, as graduates won’t alone feel the impact of forthcoming workforce changes. As roles begin to take a different shape, or even disappear altogether, there will be an urgency to upskill or reskill workers, otherwise people will be left behind.

Looking at today’s tech ecosystem and that of the 18th Century, I see one big difference: government support. In 2023, we’re lucky to receive help from both the UK and Scottish government, the latter of which funds the Scottish AI Alliance.?

We get additional support from volunteers committed to the idea of a Scotland at the heart of the AI revolution, and we can also tap into UK organisations like the London-based Turing Institute and their resources. We’ve never had access to so much day-to-day assistance, and it’s essential we maximise the investments our governments have made. It’s also our responsibility to promote ideas that make Scotland fairer, greener, more prosperous and outward-looking.

Our history of invention is rich — we’re the land of Watt’s Steam Engine, Alexander Fleming’s Penicillin, Thomas Sutherland’s HSBC, Dolly the Sheep, Aberdeen University’s MRi scanner, and many more game-changers. Scotland is a nation of leaders, storytellers and adventurers, and we’re rightly proud of them. Yet 250 years ago, we didn’t fully maximise the opportunity Watt’s idea brought.

We have the capability to create a world-class AI tech ecosystem that pushes Scottish-built ideas onto the world stage. As we continue our journey with AI, it’s people who will put Scotland at the heart of the AI revolution, so let’s get the country ready for AI business.