Swiss watchmaking went from strength to strength during the 19^th century. By the middle of the century they had overtaken the British both in manufacturing and sales and were the world’s largest producer of timepieces.

The first serious rivals appeared on the scene in the middle of the 19^th century, when American watchmakers started mass production of watch components that were so precise as to be fully interchangeable. The impact was dramatic. Swiss watch exports to the US fell by nearly 75% in the space of about 10 years. This was a serious blow to the Swiss industry which led them too to embark on the precision machining of parts.

Innovations

In the early 20^th century they also started making their watches more attractive by adding extras, such as calendars and a stop watch facility. Rolex made the first water-resistant watch in the 1920s. In 1926, the first automatic wristwatch was to come out of Grenchen in the canton of Solothurn. By harnessing mechanical innovations and cutting-edge manufacturing techniques, Switzerland was able to boost its domestic production. Swiss watchmakers were back in business, bigger and better than ever. For decades to come, they would be the unassailable world leader.

Crisis

The major revolution of the 20^th century initially passed Switzerland by. Although the first quartz watch was actually developed at the Electronic Horological Centre (Centre Electronique Horloger, CEH) in Neuchâtel in 1967, Swiss companies failed to capitalise on the new technology. They left it to others, in particular in Japan and the US, to improve on the discovery. The Swiss put most of their research and development funds into improving mechanical watches. It was an error of judgement which almost destroyed the industry in the mid 1970s as the bottom fell out of the market for traditional watches. 

Swatch to the rescue

A rescue plan for the Swiss watch industry came from an unexpected source: a business consultant by the name of Nicolas Hayek.  He decided the solution was to see the watch through entirely new eyes, transforming it from a simple instrument that tells time to a must-have fashion accessory. He was the brains behind the world-famous Swatch, the analogue quartz watch which combines high quality with low cost. Since its public debut in 1983, it has been copied a million times over. There is no doubt that Swatch saved the Swiss watch market, shepherding the Swiss watch industry back to its former glory. 30 years on, and the industry is still in rude health and is now one of the key drivers of the national economy.