The Most Valuable Two Words in Watches

The Swiss dominate premium watchmaking and have done so for decades. But the story goes back centuries.

Apple sells more than twice as many watches each year as the entire Swiss watch industry does, according to Morgan Stanley/LuxeConsult, 2023. Indeed, Switzerland produces barely 2 percent of the world's watches by volume, while commanding more than half of the global industry by value, the disproportion at the heart of this story. The Swiss watch industry is tiny even in Switzerland, representing just 1.5 percent of GDP by value added, behind pharmaceuticals and machinery, with unit volume more than halved since 2011 even as export values have climbed to record highs. The top four of its major brands alone account for over half of those sales by value.

And not all Swiss watches are all that Swiss. Before 2017 the Swiss-content rule applied essentially to the movement alone: nearly every other component could be foreign so long as the movement was Swiss and the watch was cased up and inspected in Switzerland. Law introduced in 2017 extended the test to the whole watch, stipulating that to carry the Swiss-made label at least 60 percent of the total manufacturing costs of a finished watch must be incurred in Switzerland, while raising the movement's own Swiss-value threshold from 50 to 60 percent and requiring that the watch's technical development take place in Switzerland; the Swiss are not averse to doing as much of the remaining 40 percent abroad as affordably as possible.

On paper the revision tightened the label. In practice the loopholes widened the door. As Robb Report detailed in 2025, a movement need only be partially assembled in Switzerland, and under the 2014 free-trade agreement that zeroed tariffs on Chinese components, close to an entire watch can be built in China while still clearing the 60 percent rule through domestic assembly and inspection. 

"A lot of very best independent watchmakers aren't Swiss," added Maximilian Büsser, founder of Swiss watch brand MB&F. "And we didn't even invent watchmaking - the most important inventions were French or British, and yet their industries all but disappeared."

H. Moser & Cie. dropped the Swiss Made label in 2017 in protest that the standard was still too weak, since it makes some 95 percent of its components in Switzerland.

That is the puzzle. England, France and the Netherlands once led this trade. The United States and Japan built real industries in it. So how did watchmaking come to be dominated by the Swiss, and certainly in the public imagination, with 'Swiss-made' all but a global brand in its own right?

Accidents of history helped. France's decline in watchmaking was predicated on its 16th and 17th century persecution of Protestants, the Huguenots, which happened to include many of its great makers, many of whom fled to nearby Switzerland.

Then, in 1541 the Calvinist city of Geneva banned gold jewelry, driving many jewelers to turn their attention to watchmaking instead, thus starting to build a critical mass of expertise and manufacturing that even attracted foreign would-be watchmakers, for their training at least, if not to stay and build their own brands. Over the following centuries Switzerland would continue to attract would-be watch-company founders from abroad. Patek Philippe's founders Antoni Patek and Adrien Philippe, for example, were, respectively, Polish and French.

Finally, that critical mass was allowed to consolidate thanks to Swiss neutrality, which at best displaced the watchmaking industries in the UK, Germany, Japan and the US during World War Two, sometimes irrevocably. According to the National WW2 Museum, New Orleans, for example, the needs of a wartime economy put paid to several of the nation's biggest watchmakers: Waltham declared bankruptcy in 1949, Elgin by 1968, with Hamilton closing its last US plant in 1969, before the brand was bought by the Swiss group SSIH, later part of Swatch, in 1974.

"Meanwhile, Swiss watches were available almost everywhere," said watch industry commentator Marcus Siems. "That was the start of what would become a very useful stereotype connecting watchmaking to the Swiss."

Yet Swiss dominance isn't just a product of happenstance. For one, there was its early policy of pursuing breadth over depth. Certainly, contrary to the perception of its watches as all best quality, from the beginning of its more industrialized era, in the early 20th century, Swiss watchmaking ran the gamut, with affordable, basic pieces for the global market the norm, not the exception.

The reputation Switzerland now trades on was not always the one it had. "Switzerland was, for watches, the China of its times," as Marc-Andre Deschoux, founder of Horopedia and the Maison des Arts & de le Culture Horlogerie, put it, and not above copying more prestige products, even its own. And, according to the Federation, over half of the Swiss watches made each year are still accounted for by those with an export price under CHF 200.

"Obviously there was still a long-tradition of very high-end watchmaking," he added. "But not many people understand now that then Switzerland was also a poor country and mass-produced those products other countries didn't want to make." Fortunately for the Swiss, other nations capable of the same, Russia and India among them, chose to produce largely for their huge domestic populations.

The mythologized golden age was mostly that mass-market business. "People think of the 50s and 60s as the golden age of Swiss watchmaking because a Patek chronograph from that era now sells for millions. But that's because there were so few of them, because nobody wanted them," Büsser said. "Most of the 20th century was a desert for Swiss watch complications."

It was the Swiss as much as the Japanese who pioneered the quartz movement that nearly killed off its craft makers: Switzerland's CEH consortium developed the Beta 21 in parallel with Seiko, even if Seiko brought the first commercial model to market in 1969. The so-called 'Quartz crisis' certainly saw rival nations sell off much of their watchmaking machinery for scrap, while the conservative Swiss kept theirs.

Indeed, suggested Deschoux, Switzerland's industry didn't so much have to survive the advent of quartz as absorb it, building on the making of affordable watches of a more generic style and, as the price consciousness of a shaky economy and the oil crisis became less of a barrier, simultaneously building towards the premium end of the mechanical watch market with which most people are more familiar. The market subsequently bifurcated, with manufacturers in the east focusing on electronic, battery-powered movements, notably part of Japan's technological boom, leaving Switzerland to monopolize the mechanical.

The payoff is measurable today. "But ask [the layman] to think of watches and they'll very closely associate them with the Swiss," said Bugmann. "Marketing has helped of course. But that association runs deep. Ask a consumer in Korea, say, and they'll pay double for a watch that's Swiss-made over an identical one that's not. That's a powerful difference."

What makes that lead hard to copy is structural, and it starts with geography. "There are so many reasons, even the fact that harsh winters historically encouraged the [piecemeal] making of components here," said Yves Bugmann, president of the Federation of the Swiss Watch Industry. "It's been a question of having the right people with the right skills at the right place at the right time, from a readiness to keep improving the product to a desire to create the first brands."

That piecemeal habit hardened into a manufacturing network. To scale production required the kind of specialist expertise that would, according to Benoit Mintiens, founder of watch brand Ressence, result in the Swiss industry developing an unusual structure which would also prove ideal for low volume, high-end watches too.

"The trick of the Swiss watch industry is an ecosystem by which, for example, some single watch parts require the work of 15 different companies, all 20 minutes from each other, all known to each other," he explained. "That means it's nearly impossible for one company on its own to make a watch, unless it's very big. It's just not economical for one company to install all the necessary crafts under one roof."

That, Mintiens conceded, can result in inefficiencies, delayed deliveries, monopolistic thinking. "Don't ask a company that polishes watch-hands to sandblast them," he laughed. But it also makes the rise of a rival watchmaking nation unlikely too, at least not for many decades. There's a good reason why the few, relatively tiny watch brands out of Japan or Germany are typically fully integrated, for all that collectors recognize their importance and quality.

Even the Swiss industry is not without its struggles, according to Oliver Muller of the watch industry analysts Luxeconsult: an over-reliance on a small clutch of very strong brands, and, in Rolex, arguably on just one; a threat to that ecosystem of small suppliers in more companies attempting to vertically integrate themselves; and ever-increasing consumer prices. "There's a new map for the Swiss industry coming, and it's going to be a challenging one for many of its players," he warned.