Watch manufacturing is an example of a small-scale industry.

Watch manufacturing involves the production of watches, which are intricate timekeeping devices that require specialized skills and precision. The manufacturing process includes various stages such as designing, assembling, and quality control.

Characteristics of small-scale industry:
1. Limited capital investment: Small-scale industries operate on a smaller scale with limited resources and capital investment compared to large-scale industries.
2. Localized operations: These industries are usually located in specific regions and cater to the local market demand.
3. Less number of workers: Small-scale industries employ a smaller workforce compared to large-scale industries.
4. Simple technology and machinery: The technology and machinery used in small-scale industries are relatively simpler and require less complex operations.
5. Flexibility: Small-scale industries have the flexibility to adapt to changing market demands and trends.
6. Entrepreneurial spirit: These industries are often driven by individual entrepreneurs or small business owners.

Why watch manufacturing is a small-scale industry:
1. Specialized skills: Watch manufacturing requires specialized skills and craftsmanship. The production process involves intricate detailing and precision, which is better suited for a smaller setup where attention to detail is easier to maintain.
2. Limited market demand: While watches are in demand globally, the market for high-end luxury watches is relatively niche. Therefore, watch manufacturing is more suitable as a small-scale industry to cater to the specific market demand.
3. Customization and uniqueness: Small-scale watch manufacturers often focus on customization and uniqueness, catering to niche markets and individual preferences. This level of customization and attention to detail is better achieved in a small-scale setup.
4. Cost-effective production: Large-scale production of watches requires significant capital investment in machinery, technology, and raw materials. Small-scale manufacturers can produce watches in smaller quantities, making it more cost-effective and manageable.

Conclusion:
Considering the specialized skills, limited market demand, customization, and cost-effective production, watch manufacturing is an example of a small-scale industry.