Alberto Mingardi  

The resurrection of the automatic watch

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David Landes' brilliant book, Revolution in Time: Clocks and the Making of the Modern World, ends with a chapter that reads like an obituary of sorts to Swiss watchmaking. The book was published in 1983, and Landes maintained that the quartz revolution in time-keeping would make mechanical clocks and watches obsolete. He did not underestimate the resilience of the Swiss watchmakers, and he pointed out that some industries produce interesting innovation right when they're becoming obsolete. But he was pretty convinced that the future of watches would be branded by Casio, Seiko, Timex, et cetera.
Well, things didn't actually go that way. Mechanical watches are still appreciated and bought by people, for a variety of reasons. Many consider their wrist watch a matter of status: so the well-to-do buys a Rolex for his child's graduation, as the CEO wants to show off with a Patek Philippe. For many people, digital watches aren't particularly attractive. But I would say that one of the many reasons a prophecy that seemed a safe one to Landes in 1983 didn't come through is a particular product: the Swatch.
Led by Nicolas Hayek (no connection), a brilliant engineer who passed away in 2010, the company introduced its first series of products in 1983. Hayek's idea was to regain the market for cheaper watches that was seized by Japanese manufacturers in the 1960s and 1970s (Swatch is a contraction of "second" and "watch"). To do so, the Swiss Hayek didn't choose to go digital: he did precisely the opposite, he tried to regain popularity for the analog watch, by making it more colourful and cheaper than ever.
This Hayek's interview with the Harvard Business Review is well worth reading. The following passage tells you a lot about the entrepreneurship and creativity of Mr Hayek:

Ten years ago, the people on the original Swatch team asked a crazy question: Why can't we design a striking, low-cost, high-quality watch and build it in Switzerland? The bankers were skeptical. A few suppliers refused to sell us parts. They said we would ruin the industry with this crazy product. But the team overcame the resistance and got the job done.
The Swatch is based on radical innovations in design, automation, and assembly, as well as in marketing and communications. One of our plants in Grenchen makes up to 35,000 Swatches and millions of components a day. From midnight until 8 a.m., it runs practically without human intervention. Swatch is a triumph of engineering. But it is really a triumph of imagination. If you combine powerful technology with fantasy, you create something very distinct.

A few days ago, Swatch reached another milestone. Swatches are traditionally quartz watches, but now they have just launched an automatic one. The "System51" isn't particularly good-looking (at least to me), but it is a remarkable technological success: it is the only mechanical movement ever made which is completely assembled by robots.
This is the ultimate revenge of the very technology that some thirty years ago a man as acute as David Landes deemed obsolete. Landes wasn't just underestimating the fact that people consider analog watches more attractive than digital ones. He couldn't predict the genius of Swatch's marketing novelties, and how different innovations could actually succeed in helping Hayek into automatising production and lowering costs, to the point that now an automatic watch is being assembled with no human hand involved. The beautiful thing about the future is that it's unpredictable indeed.


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CATEGORIES: Entrepreneurialism



COMMENTS (7 to date)

The other reason digital watches never took over is that analog watches are much better at what we really use watches for.

Digital watches excel at telling you exactly what time it is. But you almost never want to know that it is exactly 4:54:28.

When you look at your watch, you usually want to know how long it is until the time you really care about. How long until I have to leave to pick up the kids. How long until the movie starts. How long until this meeting ends.

An analog display makes that information available at a glance. A digital display forces you to do work out the difference in your head.

That's the same reason digital displays never took off in automobile dashboards.

Someone from the other side writes:

Digital dashboard do not take off because they are inefficient to read? I love the digital speedometer on my motor bike, much more efficient to figure out if you are about to get ticket...

Steve Fritzinger writes:

About to get a ticket may be the one time you really want to know you were doing 78.3 mph.

[url removed, broken--Econlib Ed.]

Glen Smith writes:

@Steve Fritzinger,

Maybe its because of other reasons, but I don't seem to have as good a feel for time passing as I used to.

Gene writes:

A few suppliers "rufused to sell them parts"? Wow, how can I invest in some of those companies who refuse to sell things?

Roger McKinney writes:

Great story! Thanks!

hanmeng writes:

Seiko at least has been making fairly inexpensive automatics all along.

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