When great inventions leave the laboratory and begin to transform people’s lives, we talk of an industrial revolution. There have been four such revolutions. They began with the mechanization of textile manufacturing by means of water power and steam-driven machines – which, in Switzerland, took place in the early 19th century. The end of that phase marked the beginning of the breakthrough in electrical engineering, which opened up completely new possibilities in power generation, distribution, and communication. Two engineers were involved in the genesis of what came to be known as Industry 2.0: Charles Brown and Walter Boveri. They got to know each other at the Oerlikon Engineering Works (MFO), or more precisely in its newly formed electrical engineering department, which was led by Charles Brown. The atmosphere there was similar to that of the incubators of today’s entrepreneurs as they strive to develop and capture new fields of business.
In 1888, Brown and Boveri built an eight-kilometer-long direct current line between Kriegstetten and Solothurn, which boasted what was at the time a remarkable efficiency level of 75 percent. The early collaboration between these two young men was therefore one of technical excellence, practicality, and efficiency. But they soon ran into obstacles at MFO since the company did not recognize the potential of this disruptive technology; nor did the two men have the money to go it alone: 500,000 Swiss francs, equivalent today to over ten million. An annual salary at the time was around 3,000 Swiss francs. Banks and private investors in Switzerland and Germany were unwilling to put up so much money. And yet the first major order was already on the table: The Pfister Brothers, Baden-based merchants who had become enthusiastic about electricity at the World Exposition in Paris in 1889, wanted to electrify the town of Baden with two generators, transformers, and an entire distribution network covering the town, and they wanted the 23- and 25-year-old men to help them. At the same time they were offering an attractive property for the construction of a factory for 43,000 Swiss francs.
The decision was made in 1890. Walter Boveri became acquainted with Zurich silk industrialist Conrad Baumann, who took an interest in the two pioneers. And Boveri himself took an interest in that man’s daughter Victoire, whom he married soon after. Boveri and Brown signed a contract of association in December. Boveri’s father-in-law granted the two engineers a generous loan of 500,000 francs. It was a high-risk investment which would later pay off handsomely.
The company founders chose Baden as the headquarters of Brown, Boveri & Cie. (BBC), which was set up on October 2, 1891 as a limited commercial partnership. They began operations with 100 workers and 24 salaried employees, but before even doing so they received an order to electrify the town of Baden. It was the perfect start for Industry 2.0. The founders complemented one another. Brown was the technician, Boveri the numbers man. Their company built ever-larger power generating systems in Switzerland and abroad. In part because he was connected to so many Swiss electricity companies, Walter Boveri became not only a pioneer of the Swiss electrical industry, but also one of its founders. BBC also diversified by moving into areas such as the electrification of railways. And it was a success: by 1900, the company (by then a joint stock corporation) was employing 1,300 workers and 235 salaried staff. Boveri proceeded to build up BBC into a large international conglomerate.
But then crisis came in the shape of World War I. Raw materials, including the copper so necessary to electrical engineering, became more and more expensive. Dividends were not paid out between 1921 and 1924. And Boveri’s initial attempts to gain a foothold in the USA proved fruitless in that difficult market. The founders, who had become so accustomed to success, grew apart. They both died in 1924.
The period following World War II saw the beginning of an unparalleled economic upswing. A wide range of solutions for the production of electricity, information technology, motor and drive technology, electrical rail transport, industrial electronics, and automation were welcomed by hungry markets. BBC continued to write the success story of its founders – and today’s ABB still carries their genes. It is now part of the evolution of Industry 4.0 – digitalization, automation, and information technology – following the emergence of computers in the 1970s, which represented Industry 3.0.
Today, 125 years on, the order of the day is networking, creating the Internet of Things to achieve a previously unimagined level of productivity. ABB has been a pioneer of technical progress from the outset, creating a better world. This unconditional curiosity, combined with a way of doing things that entails economic good sense and social solidarity is the legacy and DNA of ABB’s founders, which it carries to this day. ABB is a pioneer now as theywere pioneers in their time.