Until a Scotsman named James Watt added a separate cooling chamber to the machine in 1763; this cooling chamber condensed the steam so the cylinder itself didn't have to be cooled. Patented in 1769, Watt's steam engine had the efficiency to be applied to all kinds of industries. He was not, however, good at doing business and it was only when he had teamed up with the businessman, Matthew Boulton, that the steam engine began to change the face of English manufacture. By 1800, Watt and Boulton sold 289 of these new engines; by the middle of the next century, the steam engine replaced water as the major source of motive power in England and Europe.
The Continental movement and the British Agricultural Revolution made food production more efficient and less labor-intensive, encouraging the surplus population who could no longer find employment in agriculture into cottage industry, for example weaving, and in the longer term into the cities and the newly-developed factories. The colonial expansion of the 17th century with the accompanying development of international trade, creation of financial markets and accumulation of capital are also cited as factors.
The presence of a large domestic market should also be considered an important driver of the Industrial Revolution, particularly explaining why it occurred in Britain. In other nations, such as France, markets were split up by local regions, which often imposed tolls and tariffs on goods traded amongst them.