From Jacques David to Nicolas Hayek- Third edition
Chapter 2: The challenge of industrialization (1870–1918)
The challenge of industrialization (1870–1918)
The établissage system of production peaked at the beginning of the 1870s. From then on, the Swiss watch industry entered a period of profound modernization of its structures, which is characterized by the assertiveness of the factory and the industrialized mode of production. Mechanization of work and concentration of workers into plants did not however appear as a sudden change. On the contrary, there was a slow but irreversible trend which lasted until the 1910s.
The industrialization of the Swiss watch industry was driven by two external factors: American competition, on the one hand, and the world economic crisis of the 1870s and 1880s, on the other hand. The problem of the American challenge was indeed coupled with the effects of the Great Depression of 1873–1896. This period of crisis created a context which helped the acceptance of the mutation of the production mode in the watch industry. It reinforced the necessity to modernize the manufacture of watches with the introduction of machines as a mean to get cheaper products, and to diversify the outlets in order to reduce the dependence on the American market. Nevertheless, concentration into large organizations was limited. The Swiss watch industry did not give up its existing structure, typical of what economists call the industrial district.52 This concept describes industries concentrated in a region and whose internal organization is based on numerous small and medium sized companies, which are competitors...
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