There are brands in the watch market that need no introduction. Rolex, Omega or Patek Philippe are one of the biggest, oldest and the most recognizable watch brands from Switzerland. In fact, if we were asked about the country of origin for mechanical timepieces, the answer would be Switzerland. Why is it that this tiny country in the middle of Europe produces more luxurious watches than any other economy around the globe? What made Swiss watches so unique that they can costs hundreds of thousands of dollars and yet… the biggest economy on the globe- U.S., doesn’t produce watch movements at a bigger scale anymore? Was it always the case that Swiss watches were considered so luxurious and ahead of the competition? Well.. not really and lets unpack the story a little bit.
The origins of timepieces to be worn can be tracked back to the XVI century in Germany (Nurnberg). The accuracy of the 16th century watches wasn’t the best so even if one can call them watches due to their advanced mechanisms, practically speaking those devices were considered to be more of a jewellery than time trackers. We are talking of an inaccuracy of a few hours per day, which made it impractical even for the biggest watch enthusiasts.
A huge leap in a watch accuracy has been made in the 1657 with the introduction of a balance spring- an invention disputed between Robert Hooke and Christiaan Huygens from the United Kingdom. That innovation can be compared to a first handheld cell phone in the era of a landline.
Over the next hundred years, new techniques were introduced and watches got thinner, more accurate and more robust. Back then, the most advanced and accurate timepieces made for a luxurious market were manufactured in England, France and Dutch. Switzerland has been considered the capital of ‘fake watches’ that looked like high-end English watches but with lower accuracy and quality. While brits and the rest of the Europe were ahead in terms of the quality, Switzerland was the leader of the quantity. Swiss manufactures were using the ‘établissage system’ meaning that almost every village or small town specialised in production of parts or watch assembly. Unlike the rest of the Europe where watches were made in big city centres, Swiss manufacture system was dispersed. That also the case with the Swiss craftsmanship we know today.
The first half of the 19th century originated parts standardisation and introduction of various machines for mass production of watch parts. Soon after- in 1850 in Masachusets a watch company known as the American Horologe Company (and later on The Waltham Watch Company) opened first real assembly line and a true use of interchangable parts. That was a milestone in the production of watches making it more affordable, reliable and available.
The Industrial Revolution and in particular the construction and operation of US railroads required watches with a great accuracy and reliability. At that time, United States of America has become one of the leaders in the watch making industry due to a high demand and a scale of their production. Swiss watch making industry was still considered as ‘quantity over quality’ and nowhere close to the luxurious market it personifies today.
The American watchmaking history is a curious one and while it started strong, the begining of the XX century impacted it greatly. United States of America was going through the biggest recession of all times, economical and social changes that affected the industry. Factories were closing, companies had to be bailed out and some of the factory equipment, parts and the know-how has been sold out. Curiously enough, the end of an era in American Watch making, was the beggining of Russin watch industry. In 1929 the Russian government bough Ansonia Clock Company from Brooklyn, New York and founded the First Moscow Watch Factory. It is still possible to find Russian made watches that left the Factory in Moscow having serial numbers and emblems from the Ansonia Clock Company.
The beginning of the XX century brought a few changes to the timepieces market. First of all, there was a big need for small, yet precise timepieces for military purposes. Pocket watches had been replaced by wrist watches that were easier to operate on a battlefield. Watches were essential to fight on the ground, in the air or on the seas. There is no exageration to say that back then watches were as indesposable as today’s mobile phones. The industrialisation made watches cheaper and available for the mass market. The beginnings of the XX century mark the time when the Swiss watch industry re-defined its strategy and started to produce good quality watches at a mid-range prices. There are stories of soldiers coming back home with watches bought in the Switzerland that weren’t very expensive yet run until now.
Up to this point, the watch making industry varied between countries but there was no clear leader and no world wide domination of one country. The Swiss market was strong and producing watches with good quality. The rest of the Europe had their own strong, innovative brands. Germany, Great Britain and France or even Russia were producing and advancing with their own watch movements. USA has become the “Switzerland of America” producing millions of clocks with strong domestic sales and export to Europe.
An event that clearly shifted the dynamics on the watchmaking market was the 2nd World War and its repercussions. This war has been much more technologically advanced than the previous one and almost all watch making factories were turned into suppliers of war equipment. Since most European factories were located in big cities, some of them were destroyed, others adopt to new productions or entirely moved away to avoid destruction. Before the WWII, a big part of the German watch industry was located in Glasshutte- a small town in easter Germany, which after the war ended up under Russian occupation. Once WW2 ended, most of the watchmaking equipment was seized by USSR, the tradition and lots of local brands died. It took Germany a long time to recover and it is just the last 20 years when Glasshutte is undergoing a renaissance.
US market got hit by the big recession and in result the production of watches and watch parts toped. Factories were closing due to small demandad and the international competition. The Waltham Watch Company where the revolution started, was shaken up with financial loses year after year and finally sold to a Swiss investors in 1953. The american watch industry never recovered to its initial potential and at this moment there are no watch movements produced in the US at a big scale.
However, Switzerland- a country that has been neutral during the war and which factories were dispersed among many smaller mountain towns was able to preserve its watchmaking heritage. The country didn’t suffer from big human loses, its towns and cities weren’t wiped out from the ground and even if the rest of the Europe was struggling for years, Switzerland had the strength and finances to rebuild their brands and grow as a leader in the luxury watches.
After the World War 2 and up the the 70s Swiss brands grew to become leaders in the watchmaking business with a very little competition. The Japanese Seiko has been strong in the Asian and US markets but the brand was considered a “reliable yet affordable” and not a luxury brand.
The introduction of the quartz movement in the early 70s was yet another shock to the watch making industry. Watches got cheaper and available to anyone. Their accuracy got even better and there was very little need for servicing or spare parts. That time is called the Quartz Revolution and it almost killed the well established watch industry altogether.
Up until just a few years ago the watch industry was in decline. Swiss brands were struggling to innovate and the market for luxorious mechanical watches was shrinking year after year. Over the last fourty years Swiss brands had to be bailed out by banks, lots of companies closed their doors and others consolidated. Brands like Swatch try to innovate through designs and prices. Luxorious brands stick to their roots and craftmanship whereas other brands tip their toes in the Smart Watch market.
When we think of a modern brands like Coca-Cola, Microsoft or Apple, we don’t really consider of how much of their heritage has been shaped by politics, fashion, technology, innovations or wars. Geopolitics plays huge role in watch making industry and it has been re-defined several times since its XVI beginnings.