“The Swiss Watch Industry Does Not Exist” Argues a New Book that Examines the Rise of Watchmaking Multinationals
In his latest book, The Business of Time: A Global History of the Watch Industry, Pierre-Yves Donzé looks at how the dynamics of watch production have changed over the last 170 years and makes a controversial argument: “The Swiss watch industry no longer exists.”
Most of us who are interested in watches know that, nowadays, when it comes to volume and value, global watch production is mainly concentrated within just a few places: Switzerland, Japan, China, and Hong Kong.
Of course, that hasn’t always been the case. At one time, Great Britain, France, Russia, and the United States were leading centers of watch manufacturing. However, mass production of timepieces in these countries faded during the twentieth century.
In his latest book, The Business of Time: A Global History of the Watch Industry, La Chaux-de-Fonds native and business history professor at Osaka University in Japan, Pierre-Yves Donzé, tries to explain how the current state of the world’s watch production came to be.
The fruits of over 15 years of research devoted to the watch industry, The Business of Time begins in the mid-1800s and traces the evolution of global watch production to the present day.
Along the way, Donzé looks at the various factors – organizational, technological, economic, legal, and commercial – that helped watch production flourish or contributed to its decline in Europe, Asia, and the United States.
The Swiss watch industry, for example, consisted of companies headquartered in Switzerland, controlled by Swiss capital, and which produced their components in Switzerland. Germany, France, Japan, the USSR and, to some degree, the US operated similarly.
But from the mid-twentieth century onwards, a fundamental paradigm shift occurred: Namely, that large, multinational companies with fewer territorial ties went on to dominate the industry.
“Watchmaking is now a globally organized industry, although some activities are concentrated in particular territories, such as Switzerland for luxury watches or China for other watches,” says Donzé.
As a result, Donzé believes that the term “the Swiss watch industry” is a bit of a misnomer: “The Swiss watch industry does not exist – or, put more precisely, it no longer exists,” he says.
In his book, Donzé points out there are three kinds of organizations that control the Swiss watch industry. First, there are the companies headquartered in Switzerland, controlled by Swiss capital (like Swatch Group). Then, there are the companies with foreign capital that control Swiss watch manufacturers but based in foreign headquarters (like LVMH and CITIZEN Group). Finally, there are the Swiss-based companies that are controled by foreign capital (like Richemont).
All these companies, he says, are integrated into production systems organized on a global level. Some have subsidiaries in Europe and Asia, while others rely on subcontracted suppliers, often located in China and Thailand.
“Under these conditions, it is difficult to define exactly the nature of the Swiss character of the watch industry present in Switzerland,” says the Kyoto-based academic. However Switzerland isn’t alone; he believes the same can also be said for the modern-day watch industries of other countries, especially Japan, Germany, and China.
Donzé paints a picture of how we arrived at today’s state of play by marrying statistical analysis with snapshots of the watchmaking industry in each country throughout the decades.
Over the book’s 216 pages, there are interesting insights into those brands that played a key role in establishing national watch industries: Longines, Zenith, and Favre-Leuba in Switzerland; Seiko in Japan; and Junghans and Glashütte in Germany, for example. Of course, Donzé also sketches the contributions of Waltham Watch Company, Elgin National Watch Company, Hamilton Watch Company, Bulova, and Timex to the American watch industry.
Donzé illustrates his points with a good number of tables and graphs, but also manages to pepper what is a very scholarly analysis with plenty of period photos and original advertising artwork to transport us back to the various eras that he describes.
(Images from the book)