Tick tick boom: perspectives on the quartz crisis

When the first quartz-powered watch made its debut at the end of the 1960s, it inspired both excitement and existential fear in watchmakers around the world. 

Isn’t it interesting how people can look at the same event from different angles? Japanese brand Seiko’s debut of their first quartz-powered watch in 1969 is often referred to as the start of the “Quartz Crisis” for the Swiss watchmaking industry – a time of great upheaval and financial woes. But every now and then, you’ll hear whispers of the “Quartz Revolution”, suggesting Seiko actually sparked a horological breakthrough. They pulled off what many thought was impossible, and they did it flawlessly (as Seiko tends to do).

Those who label it a crisis likely see it from one perspective, while others view it as revolutionary. So, why do some see it as a crisis? After all, change and innovation are part of the game in everything we do. Let’s dive into that discussion, starting with the Swiss.

Make watches, not war

Our story begins with the circumstances of Switzerland’s neutrality during World War II.

While other nations redirected their industries to churn out military hardware like tanks and bomb timing devices, Switzerland remained steadfast in its watchmaking tradition. One could say that while the rest of the world was going tick-tick-boom, the Swiss preferred to stick to tick-tick-tick.

This choice proved pivotal, catapulting the Swiss watch industry to dizzying heights. In the early 20th century and well into the aftermath of World War II, Switzerland dominated the global market for mechanical watches, accounting for a staggering 95% of all sales. With virtually no competition, Switzerland held an unparalleled lead in technical expertise and craftsmanship. 

Production was primarily conducted in small, state-controlled enterprises, where the majority of the work was executed by skilled hands using reliable yet straightforward machinery. Even in those days, Swiss watches epitomised perfection, exquisite craftsmanship and uncompromising quality. The watch industry employed approximately 90,000 individuals either directly or indirectly.

However, in the 1950s and 60s, as the race to develop the first quartz wristwatch heated up, the Swiss encountered formidable competition. Quartz technology tantalised with the promise of cheaper and more accurate timepieces than their mechanical counterparts. Despite these advantages (and the fact that one of the world’s first quartz movements was manufactured by a Swiss watchmaker consortium during the early seventies), Swiss watchmakers hesitated to fully embrace quartz. They cherished the intricate artistry of mechanical watches, a unique feature that remains prized to this day.

Yet, the growing popularity of quartz watches became undeniable. By the late 1970s, quartz timepieces had eclipsed mechanical ones in the market, sending Swiss watchmaking into a tailspin. Of the 1,600 Swiss watch brands in existence in 1970 (just a year after Seiko’s quartz watch debut), approximately one thousand failed to survive the following decade. Employment within the Swiss watch industry plummeted by two-thirds during the same timeframe.

The democratisation of horology

Who might champion the Quartz Revolution over the Quartz Crisis? Well, naturally, the Japanese stand at the forefront, alongside those who harbour a fervent enthusiasm for technology and the belief in the ever-changing nature of industry.

The revolutionary impact of the Astron – Seiko’s debut quartz watch – cannot be overstated: boasting an accuracy of +/- 5 seconds per month, a feat no Swiss movement of its era could rival. Swiss counterparts struggled to match this precision over a 24-hour cycle, let alone sustaining it for an entire month.

The Japanese approached their watch presentations with a youthful, vibrant and playful flair. Leveraging cutting-edge production techniques, they ensured their watches boasted solid quality. The once prestigious “Swiss made” label lost its lustre, becoming obsolete and antiquated practically overnight. Seiko outlets proliferated, overshadowing Swiss-made mechanical watches, which were soon deemed inaccurate and overpriced.

An often overlooked aspect of this transformative era is Seiko’s democratisation of horology on a global scale. While the Swiss, Americans, French and Germans may have produced more accessible versions of mechanical watches, none could match the accessibility of Seiko’s quartz-powered timepieces. The affordable watch brands that are flourishing worldwide today are a direct outcome of the Quartz Revolution, a paradigm shift that ultimately proved immensely beneficial for many.

One of those beneficiaries, if you can believe it, actually ended up being a Swiss watch brand.

Second breath, second watch

In the early 1980s, Swiss banks enlisted the expertise of management consultant Nicolas George Hayek to assess their dire predicament. Hayek devised two strategies to navigate the crisis. His vision involved consolidating the brands of the two major watch groups, ASUAG and SSIH, under a single powerful umbrella brand and introducing a new watch line that combined Swiss quality with affordability. 

Thus, the birth of the Swatch Group was realised through a banking agreement, with Nicolas G. Hayek leading the charge.

Swatch, an abbreviation for “Second Watch” (not Swiss Watch) signified an ingenious concept – to offer affordable, everyday watches that complemented a mechanical collection rather than replacing it entirely. The quartz-powered Swatch watch was pitched as an everyday-about-town kind of timepiece, while its mechanical counterpart would be the special-occasion, important-meeting watch. This way, the Swiss could hold on to their legacy of mechanical prowess while benefiting from the quartz trend. 

Hayek adopted a bold marketing approach, highly unconventional for the Swiss watchmaking sphere at the time. Swatch timepieces boasted a distinctive profile: flat, lightweight, bright and audacious. Hayek personally curated the designs chosen for production. Positioned in the affordable price bracket, Swatch watches directly challenged their Japanese counterparts. In an unexpected turn, Swatch swiftly became a ubiquitous accessory in global pop culture, reigniting the allure of “Swiss made.” It was a stroke of genius, arriving literally at the eleventh hour.

Competition: the great motivator 

Seiko’s impact on the Swiss watch industry was profound, acting as a catalyst for transformative change. By introducing new technologies, innovative designs, and competitive pricing strategies, Seiko disrupted the status quo that had long characterised Swiss watchmaking. The traditional Swiss watchmakers, accustomed to their dominance in the market, were forced to reevaluate their approach and adapt to the evolving landscape. Fortunately, Swatch was born, rising like a phoenix from the ashes of a dormant watchmaking industry. 

Change is an inevitable part of life and history is a testament to its continuous evolution. Just as horse-drawn carriages gave way to cars, every aspect of our world undergoes transformation. Those who embrace these shifts and adapt accordingly are the ones who not only survive, but thrive.

Lab-grown vs. mined diamonds, anyone?

About the author:

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting.

Dominique can be reached on LinkedIn here.