Human settlement of the high Jura plateau was relatively late. The name of Le Locle, a small mountain village, does not appear until the Late Middle Ages, and that of the hamlet of La Chaux-de-Fonds not until even later. However, the two autonomous rural communities existed by the mid-17th century.
The birth of watchmaking at Le Locle is attributed to the semi-legendary figure of Daniel Jean-Richard, at the end of the 17th century, and then subsequently to other remarkable entrepreneurs of the 18th century. Technical watchmaking activity was then divided between rural workers, who were increasingly numerous, specialising in the making of a particular part. The parts were then brought together by the establisseur, who issued the orders. He assembled the basic movement of the watch in his own workshop in the village and finished it off, or if not sold the basic movement to a watchmaker from Geneva or Paris. Many craft specialities were necessary, but the division of labour meant that this was manageable and that the necessary labour force could be trained relatively rapidly.
In the 18th century, the Upper Jura farm was well adapted to this type of activity, which required a room, light, and the time made available by the long winter months. The establissage system at that time tended to be concentrated in the towns of Le Locle and La Chaux-de- Fonds, which were close to each other, and to become professionalised to meet the growing demand for watches. The town house permanently dedicated to watchmaking then took over from the farm. With two or three storeys and with an architecture that was sober and functional, a house of this type would accommodate several families of worker-craftsmen and their workshop rooms. This evolved into the vast colonies of rented accommodation in the second half of the 19th century. In 1870 some 90% of the Swiss watchmaking labour force consisted of home workers.
The fire of 1794 at La Chaux-de-Fonds and the fires at Le Locle in 1833 and 1844 made it possible to redesign the plans of these two watchmaking mountain towns in a more rational way, in order to make them into towns entirely dedicated to the development of watchmaking (see Description). The names of Moïse Perret-Gentil and in particular of the engineer Charles-Henri Junod are associated with these projects.
The urban population grew steadily from 1750 to 1830; there was then a considerable acceleration in urbanisation, particularly at La Chaux-de-Fonds between 1830 and World War I. The population of La Chaux-de-Fonds was then around 40,000 and that of Le Locle 13,000. The Industrial Revolution led to the building of a railway line between the two towns, in 1857, which was extended to Neuchâtel shortly afterwards. It fitted in well with the strip-based urban fabric. In addition to its transport function, the railway helped to strengthen earlier urban options and to encourage development along the axis of the valley. The town plans were extended, reinforced by the construction of a water supply system and a sewerage system; hygienic concerns were given priority. During the second part of the 19th century the watchmakers had to cope with various market pressures: an increase in output, the growing need for quality at a lower cost, and the shock of American competition based on another manufacturing business model. The Universal Exposition at Philadelphia in 1876 revealed the capacities of the new model. The production of fully interchangeable standardised parts, using sophisticated machine tools, provided an effective response to the new needs of the markets.
The watchmaking industry of the Neuchâtel mountains was the first in Europe to adapt to this competition. This led to the creation of integrated factories, or larger workshops in annexes to houses, but still in the pre-existing grid of streets. Not only did the Swiss watchmaking industry maintain its previous positions, it strengthened them, again dominating the world watch market.
The crisis of the 1930s left its mark on the region; the Swiss watchmaking industry coped thanks to a system of cartelisation under public control. Negative population growth occurred for the first time in the inter-war years, particularly at La Chaux-de-Fonds. There was then a substantial increase during the thirty years of post-war prosperity (1945-75), exceeding the previous record population levels of the early 20th century.
Another brutal change in the industrial system occurred in the 1970s, with the sudden arrival of quartz crystal and electronic techniques from foreign countries. This led to another drastic and rapid conversion of the manufacturing system, which after some difficult years again raised Swiss watchmaking to the position of unrivalled market leader. The number of watchmaking concerns is declining and populations are decreasing, but without a serious and irreversible crisis, as happens all too often in the industrial world.