Innovation, as defined by the Merriam-Webster dictionary, is “the act or process of introducing new ideas, devices, or methods”. Expanding that definition, innovation also encompasses creating products people didn’t even know they wanted.

The watch business does precisely that. Many timepieces now considered iconic were born of such circumstances. Take Audemars Piguet’s Royal Oak, which created a completely new segment – the luxury sports watch – when it was launched in 1972.

At over CHF3,000 – a princely sum at the time – it was a steel watch that cost as much as a gold watch. Despite its naysayers, the Royal Oak has sold very well over the years. Patek Philippe went down the same pricing route with its Nautilus, launched in 1976 and designed by the great Gerald Genta, who also designed the Royal Oak.

And then there’s Richard Mille. Before the auto-racing watch designer arrived on the scene, the idea of a watch made of a high-tech polymer and costing as much as a reasonably sized home would have been preposterous. Today, the brand’s carbon fibre and ceramic timepieces are far more desirable than its precious-metal ones.

Innovation can also mean repurposing an existing idea. Panerai, for one, started life as the maker of timepieces for the Italian navy. In fact, the Florence-based brand was actually a maker of horological instruments, not watches, so the early Panerai timepieces used Rolex movements, cases and screw-down crowns. They were no-nonsense, workhorse watches built for diving professionals.

When the Richemont Group acquired Panerai in 1997, it reinvented the brand as a status symbol for yuppies by keeping its distinctive design but supercharging its marketing and PR efforts. As a result, over the past decade, Panerai has become one of the It brands.

Another example is specific product innovation – making something better. Like introducing silicon parts into the escapement, as Omega and Patek Philippe have done, to improve reliability and reduce the need for potentially expensive servicing.

Perhaps the most audacious innovation of all is taking someone else’s idea, making it better or different, and selling it for more. Apple has done that with remarkable success, and so has Hublot, whose guiding spirit, Jean-Claude Biver, is often regarded as the Steve Jobs of watchmaking.

Hublot’s spectacular revival in the mid-2000s – sales grew fivefold in three years – was thanks to its Big Bang watch, which was strikingly similar in look and concept to the Royal Oak Offshore – one of the hottest watches of that period.

Today, the watch market is undergoing a cyclical slowdown, which is putting a damper on the industry. Brands are adopting a more prosaic form of innovation by trying their best to make their products cheaper and thus more accessible. That usually means either creating new products at lower prices, or reducing pricing on existing ranges.

Much of the more substantive innovation in watchmaking has been in creating affordable watches. Swatch, for example, made a big leap forward in manufacturing technology with its Sistem51, launched last year. The $200 timepiece is the first mechanical watch made entirely by machine. It’s the first of its kind in Switzerland, though Japanese watchmakers like Seiko have achieved nearly 100 per cent automation.

Swatch’s parent company, Swatch Group, is the most successful watch outfit in Switzerland when it comes to boldly commercialising various materials and technologies on a very large scale. That is due in large part to its ownership of various enterprises that make key components for timepieces on a massive scale, like hairspring maker Nivarox and movement manufacturer ETA.

It also helps that the Hayek family, who founded and still controls the group, has long emphasised engineering, rather than marketing.

Omega, which it also owns, is probably the largest maker of timepieces with silicon components inside the movement. Its latest generation of movements promises magnetism resistance to over 15,000 gauss – equivalent to that generated by an MRI machine – a remarkable achievement that makes the movement impervious to any sort of magnetism encountered in daily life.

Touted by watchmakers as the material of the future, silicon is non-magnetic and shock-resistant – ideal properties for the hairspring, balance wheel and escapement, which are the regulating organs of a watch.

Equally important is the high-tech method of etching silicon parts, which creates identical components that are precise to the micron, regardless of the quantity made. Such mass-produced perfection is ideal for a watch’s regulating organs because they boost stability and reliability and reduce the need for servicing.

Rolex, that other great engineering powerhouse in Swiss watchmaking, has also climbed onto the silicon bandwagon, albeit very recently. It unveiled its first silicon-equipped wristwatch only earlier this year.

With the sluggish state of the market now, this sort of staid, technical innovation is likely to be the order of the day for the foreseeable future. It won’t make watches cooler, but it’ll make them better. Isn’t that what innovation is all about?