James Watt's key contribution to the Industrial Revolution was his improvement of steam engine technology. His enhancements reduced the waste of power that occurred in previous versions of the engine and allowed the steam engine to work constantly. The improvements to the steam engine were fundamental to the explosion of advances that occurred during the Industrial Revolution.
Working steam engines existed before Watt's improvements, but they were bulky and expensive and produced relatively little power. Watt's first improvement was to separate the chamber that created steam from the rest of the engine, so that the engine would no longer overheat and could produce power more consistently and efficiently. Watt patented his condensing chamber in 1769 and continued to make improvements to the steam engine over the subsequent years, including use of a steam "jacket" to prevent steam from condensing in the engine's cylinder and closing the upper part of the cylinder, both of which increased the steam engine's efficiency.
The advent of Watt's steam engine made other technological advances possible and cost-efficient during the Industrial Revolution. Steam engines were used widely in mills and mines and were also incorporated into several forms of transportation, including ships, railways and ultimately automobiles. Watt spent most of his career continuing to refine the steam engine.