The Rise of Japanese Watches (& How the Swiss Lost)

at the time of japan's opening up almost all of the world's watches came from either the united states or switzerland the swiss sought to keep their secrets from leaking out to other countries but those secrets still got out and with them japan became one of the world's biggest makers of watches in this video we're going to look at the start rise and peak of japanese watches but first a sponsor read for the asian geometry newsletter i know there's a lot of newsletters out there but i try to give mine a lot of value check them out first full scripts and commentary after the fact the signup link is in the video description below i try to put one out every week maybe two all right back to the show at the turn of the century the watch world had been divided between the united states and the swiss but the ways in which the two succeeded were very different in the united states a small number of big companies like waltham watch and elgin watch produce hundreds of thousands of pocket watches for domestic consumption these simple cheap watches were made with screw automation technology adapted from sewing machines the swiss watch industry on the other hand was the total opposite the industry consisted of many small companies contributing to a wide range of high precision timepieces so a little more high class in 1901 swiss statistics found that there were 663 watch industry firms employing 24 858 people the largest company long games employed just 853 of that in 1905 long gins produced 130 000 pieces in comparison waltham was producing multiples more pieces annually just a few years prior swiss diversity had been a strength producing many products to cater to everyone's needs all of them were exported abroad switzerland dominated the pocket watch export market with something like 93 percent market share when it came to building up railroads telegraphs or the military japan rapidly adopted western technologies the government's overarching goal was modernization they wanted to catch up with the west so back then clocks were all the rage has to fit in with part of their overall modernization movement when westerners first started importing watches into japan during the 1860s the items were mostly seen as deluxe goods for the social elite in 1868 japan reported that 1185 wall clocks and just 300 pocket watches were imported into the country by 1887 over 700 000 clocks entered japan they were installed in hospitals schools town halls and post offices during this period of time japan sought to wean itself off clock imports from the united states since clocks were technologically simpler than watches the japanese early clock industry focused on replicating them in 1888 hayashi shihei a timepiece retailer opened japan's first modern clock factory it was a success and hayashi opened five more factories in osaka tokyo and so on japan's clock industry rapidly gained competence in clock manufacturing with production volume going from 370 465 pieces in 1905 to 1.2 million in 1922. there were over 20 clock factories on the eve of world war 1. at first domestic demand and military demand in particular drove this market but hayashi started exporting its excess production to cities of the far east like shanghai singapore hong kong and bombay by the 1930s japan was a clock exporting power with 35 percent of the total market over the same time period people started wearing pocket watches in 1887 it was estimated that just 0.8 percent of japanese regularly wore watches that number grew to 4.2 in 1897 and then finally 10 in 1907. as pocket watches got popular japanese companies sought to make them the biggest of which was a japanese company called hattorinko founded by hattori kintaro hattori learned the watch industry at the age of 13 in a clock dealership in tokyo then in 1877 at the age of 17 he opened up his own shop which repaired and resold watches in 1881 he married the daughter of a watch trader he purchased a shop from his new father-in-law and started selling imported swiss and american watches to acquire his product he rode the railroad to what is now sakuraji cho stationed in yokohama to meet with swiss trading houses when the japanese clock boom arrived hatori saw the opportunity and in 1895 opened his own factory making wall clocks and then high-end grandfather clocks he gave that factory the name sekocha a mechanical watch uses very small precision made parts assembled in a painstaking process that took a lot of time and skill a watch's heart and soul are its movements or movement parts the parts that keep the watch ticking accurately japanese watches couldn't compete with swiss and american companies they weren't as thin accurate or reliable as their competitors they also cost more than their imported competitors the selling quantities were not high enough for the japanese factories to gain economies of scale these western imports had poured into the country so freely because in the mid-1800s japan and the united states signed an unequal treaty opening up several treaty ports in the country but in 1899 that treaty lapsed and japan regained sovereignty over their trade relations the japanese government then immediately embarked on an import substitution policy raising tariffs to deter imports and protect domestic manufacturing before 1899 silver and nickel watch imports had a 5 tariff pretty low after that year those rates went up to 25 percent and then 40 percent in 1906 the japanese did similar actions for bicycles machine tools hydroelectric turbines sewing machines and automobiles protected from western imports hattori's watching making business took off from 1906 to 1930 his clocks took 48 percent of the domestic market and his watches 85 percent of the market government protection and high tariffs were definitely part of the reason why he did so well but not the only one hattori's company improved their manufacturing capacity by focusing on automating a small number of select swiss inspired models hattori's company released 25 watch types between 1895 and 1937. just three of those types sold well the 1909 empire pocket watch and two wristwatches the laurel and the seiko to gain expertise in producing these hatturi hired engineering labor from tokyo universities to disassemble swiss watches and learn how to put them back together and more importantly he sourced raw watch parts from switzerland which weren't subject to tariffs from 1915 to 1935 switzerland provided 69 percent nice of japan's watch parts this practice of first importing disassemble watch movement sets and putting them together inside the borders was referred to as chablinage named after the word shablan which means movement sets from 1895 to 1899 japan imported 22 500 watch movements from the united states and switzerland then in 1900 the first year of the tariffs on finished watches japan imported 122 000 movements and then in 1905 two hundred and fifty thousand by then japan was importing far more movements than finished watches the swiss watch industry became concerned rightly so the chablis would be their long-term downfall transferring critical watchmaking expertise to other countries here's an example in 1894 a swiss citizen rudolph schmidt settled in yokohama and opened a trading company his company first started out by importing and selling complete watches but changed after japan raised the tariffs in 1908 after the second round of tariff increases he began importing shablands into japan there at his workshop in yokohama schmidt finished his watches with cases imported from his family's watch case factory in switzerland then in 1910 schmidt shifted the entire process case making it all to japan which infuriated and alarmed members of the swiss watch industry in 1912 he moved his yokohama factory to tokyo where his company started to get very large in 1930 under sketchy and uncertain circumstances schmidt acquired a watchmaking workshop called shakosha that workshop was renamed to the citizen watch company a name schmidt had owned since 1918. citizen would rise to become the japanese industry's second significant watchmaker after hattorian co or seiko what happened in japan was the sum of all swiss fears in 1935 hattori's watch factory became the single largest in the world and what's worse hatori and citizen started expanding abroad one advert read our watches are japanese made the japanese workers extraordinary aptitude for any type of fine painstaking work as well as this exceptional output are well known with watch exports declining throughout the 1920s the swiss reorganized their industry into a cartel parts suppliers signed agreements called watchmaking conventions making it so that they can only do business with each other a holding company was set up named aswag to purchase all the various movement manufacturers 1934 the government stepped in eventually controlling all watchmaking activities and monitoring all exports of watch parts and machine tools chablinage was made illegal this largely managed to achieve its goals for the next few decades the swiss watch industry enjoyed high profits and a consistent 50 percent share of the global watch market the 1930s also saw a market transition from pocket watches to wrist watches watches also gain new features like self-winding movement calendars and waterproof cases all the while becoming smaller and more complicated then came world war ii most watches companies with the exception of the swiss halted their production and saved their medals for the war effort many companies were drafted into producing precision tools the swiss stayed neutral giving them a leg up in the global market america's watch company struggled in the wake of the war unable to compete against cheap swiss watch imports despite new tariffs from the united states government the american watch industry entered a long-term decline and consolidation hattori and co pushed hard to get through that post-war slump and compete on an even footing against the swiss they copied swiss machine tools studied swiss methods during trips to europe and worked through loopholes in the cartel system by 1966 hattori would eventually produce mechanical watches that performed as well as their swiss counterparts establishing themselves as world leaders but at the same time the company sought to bring to market a new type of watch one that would completely disrupt the mechanical watch world the technology principles behind the quartz watch have been around for a long time in the 1880s pierre curie husband to the legendary marie curie discovered that if you apply pressure or alternating current to a quartz crystal it vibrates and it vibrates at a very consistent number 33 000 times a second such a property could be leveraged to make timepieces far more accurate than any mechanical clock then in 1927 an engineer at bell labs created a high precision quartz clock the size of a whole room ultra accurate time keeping hadn't been his intention with the device but he did know that it could serve as one in the years since a quartz crystal making industry sprung up the supply radios then in 1960 watchmaker bulova one of the big two american watchmakers left standing rolled out the first commercial electronic watch they unveiled the accutron with a big marketing blitz across 13 u.s cities accutron wasn't quartz powered but rather used a 360 hertz tuning fork the watch was 10 times more accurate than a mechanical watch while using far fewer discrete parts acron's tech was developed by the swiss scientist max hetzel who only turned to the american watch markets after he couldn't interest anyone in switzerland with his ideas bulova with the accutron turned out to be one of those cases of first mover disadvantage they stuck to their tuning fork technology even after it became clear that quartz was the future they're eventually acquired by the conglomerate lows but the accutron nevertheless shocked the industry and kicked into motion a surge of technological development in electronic watches across the u.s japan and switzerland in 1959 hattori now seiko formed a new team to commercialize quartz timekeepers with the transistors commercialization small circuits can now feed power into a quartz crystal measure its oscillations and translate them into second pulses their first goal was to have a portable quartz chronometer in time for the tokyo olympics in 2021 oh i mean 2020 no it can't be that 1964. there we go somehow this group of ragtag mechanical engineers managed to ship this electronic quartz-based chronometer after that they set out to miniaturize the technology into a watch the watch they eventually produced was a mismatch of ill-fitting components without access to advanced integrated circuits they created a hand soldered hybrid circuit made of 76 transistors 29 condensers and 84 resistors the original in-house team at seiko had actually failed to master the cmos production process so they outsourced the work to the american firm intersil intersil completed the project and signed over their process knowledge to seiko seiko produced much of their transistors in-house but occasionally tapped capacity at the country's big producers hitachi nec and toshiba the seiko astron sq went on sale in tokyo on christmas day 1969 for what would be 31 000 today this elegant limited edition gold watch had a simple functional look but the thing heralded a revolution seiko chose to market the astron with the line someday all watches will be made this way they were right the astron was revolutionary but its sales numbers the first few years did not set the world on fire in 1971 hattori announced that they sold just 3 000 astrons digital watches needed another piece before they really stormed the gates out in pennsylvania a company called hamilton watch was working on their own quartz watch seizing on a new technology called light emitting diodes they ditched the hands and dial completely and just displayed the time and date hamilton called their pulsar a wrist computer decades before the apple watch became a thing it was first released as a p1 version in gold taking a luxury fashion angle to offset the high cost of production but it really took off when james bond wore a p2 version in the movie live and let die never watched that one more of a sean connery fan myself anyway by the mid-1970s led quartz watches had become the market standard in 1974 world consumers bought 650 000 led watches and analysts predicted that number would rise to 10 million in a few years led watches would eventually give way to lcd watches due in part to their better battery life consumption various integrated circuit firms and traditional watch companies rushed into the digital quartz watch category they are excited to find a killer app for which they can sell their chips for instance texas instruments sold the digital solid state led watch for between 95 and 175 dollars in the same retail outlets who sold their calculator products even intel had their fingers in the watch pie for a little bit in 1972 the company acquired digital watchmaker microma and made smart watches casio was another one of those companies having started as a calculator company they went head-to-head with the u.s firm timex at the low end offering their low-priced models in drugstores across the country japanese watch exports into the united states a critical swiss market exploded export value grew nearly 10 times over reaching 26 million usd in 1975. watches were nearly 20 percent of total japanese exports swiss exports stagnated and their market share plummeted from 83 at the start of the 1970s to just 20 in 1980 by 1985 japanese watch exports into the united states totaled million dollars seiko citizen and casio watches had effectively pushed the swiss out of their most valuable market it is important to note that japanese mechanical watches were as good as swiss watches before the astron came along hattori's acquisition of swiss technologies and expertise is a reflection that export restrictions don't always work as planned but the swiss watch industry really fumbled the industry's shift to quartz despite long being aware of the technology they had even demoed their own prototypes in 1967 two years before the astron but the swiss took a great deal pride in their mechanical heritage and their sprawling industry structure of many small firms worked against them no individual swiss company had the resources initiative or broad expertise to build such a thing on their own a mechanical watch and a consistently accurate one is hard to make you needed trained artisans and painstaking effort a digital watch made with modern semiconductor production methods overwhelms all that human training with titanic scale quartz watches ended the swiss grip on the global watch industry as late as 1974 they had 40 percent of the global market ten years later that share shrank to just 10 percent by 1983 over half of the country's watchmakers had gone bankrupt due to necessity the swiss had also shifted to quartz technologies and for a brief period of time it seemed like mechanical watch production techniques would be lost to the sands of time but the swiss mechanical watch industry has made a bit of a comeback since then having recognized that their products have value beyond just accurately keeping the time restructuring into the swatch group the swiss created luxury watch brands and have since thrived in their niche the japanese watch industry on the other hand peaked in the 1980s challenged by industrial competitors in hong kong and then china the industry stagnated and relocated their manufacturing abroad they have since struggled to return to the peaks of their glory years but that is a story for another time all right everyone that's it for tonight thanks for watching subscribe to the channel sign up for the newsletter and i'll see you guys next time

Channel: Asianometry

Views: 349,624

Keywords:

Id: V2MWfQkVo6s

Length: 20min 50sec (1250 seconds)

Published: Sun Aug 07 2022