Embracing change is a matter of survival
In 1989, Steven Sasson, an employee at Kodak, presented to his boss the world’s first DSLR camera, a side project the photographic film company half-heartedly allowed Sasson to work on for over a decade.
Far improved from the prototype Sasson invented in 1975, the 1989 machine was similar to digital cameras we use today, with a 1.2-megapixel sensor, image compression capability and memory cards.
According to a New York Times report, Kodak shut down Sasson’s project. “Kodak didn’t really embrace any of it. That camera never saw the light of day,” Sasson said.
Fearing that digital cameras would cannibalise Kodak’s hugely profitable film business, the company’s marketing department refused to sell the product. Instead, Kodak stood by as its competitors moved into the new market and, despite earning billions through its digital camera patent, Kodak’s failure to seize the initiative led to its downfall. The company filed for bankruptcy in 2012, five years after its digital-camera patent ran out.
Kodak’s failure to take advantage of its lead in the digital-camera market is all the more astonishing. Applying Moore’s Law, Sasson told Kodak in 1989 that he expected it would take 15 to 20 years for digital cameras to reach a level that would allow them to compete with film cameras. His prediction turned out to be correct. Digital cameras outsold film cameras in 2003. Kodak launched its first digital camera in 2007, the year its patent expired.
Around the same time Sasson unveiled his DSLR camera, the company hired futurist Faith Popcorn to examine the future of film. When the company was told that “print film was dead and the future was all about digital,” it fired the futurist. Despite enjoying a huge head start in the digital-camera business, receiving an unequivocal warning on the future of consumer photography and even being given a timetable for digital camera development, the company insisted on ignoring the trend until it was too late. This is a case in which personnel shortsightedness trumped long-term strategy. Sasson accurately described the attitude of his boss in 1989: “When you’re talking to a bunch of corporate guys about 18 to 20 years in the future, when none of those guys will still be at the company, they don’t get too excited about it.” Moreover, executives are reluctant to push for changes that would render their own experience redundant, even though they know the changes are necessary.
The Kodak story is a cautionary tale not only for businesses but also for policymakers in this fast-changing world. If there is any consolation for Kodak, it is the fact that only 10 years after digital cameras overtook film cameras, digital cameras themselves face technological challenges, as smartphones are packed with increasingly powerful image-capturing devices.
Despite its talk of innovation, Taiwan’s government has been slow to adapt to key global trends. For example, it rejects ride-sharing apps such as Uber without encouraging local enterprises to tap into the potential of the sharing economy and autonomous transportation. The nation has also been slow to develop technology such as mobile payment systems, despite having the perfect market with high bank account ownership rates, a high density of convenience stores and high Internet penetration rates.
Ten years ago, now-ubiquitous smartphones did not even exist and they might not exist in 10 years’ time. Tech companies – and nations that rely heavily on the industry, such as Taiwan – must be nimble to stay ahead of the curve. Sometimes that means embracing dramatic changes and long-term goals, even if they present challenges in the short term.
