The fall of Kodak

The average life span of a Korean corporation is 27 years, more than double the world average of 13 years. In today’s world, it is hard to find companies that last more than 100 years due to cutthroat competition, the rapidly changing market environment, and light-speed advances in technology. Eastman Kodak is that rare long-lasting company. Established by photography technician George Eastman in 1881, Kodak boasts 131 years of history. Kodak, which has been a symbol of America Inc. together with Coca-Cola and Wal-Mart, filed for bankruptcy protection Thursday. Just 80 years after the founder`s death, the company is at a crossroads of life and death.

Kodak grew into a film empire by taking the lead in technological development such as films and Kodak cameras. In the 1970s, it controlled 90 percent of the U.S. film market and 85 percent of the camera market as well as employing more than 140,000 workers. The company`s failure to jump on the digital bandwagon in the 1980s, however, dealt a fatal blow. Though Kodak produced the world`s first digital camera, it chose to stick to the film business, in which it controlled two-thirds of the world market. Because Kodak was resting on its laurels thanks to its dominance in an existing market, Sony and other companies opened the era of digital cameras. Kodak’s share price once approached 100 U.S. dollars but plunged below 1 dollar a long time ago as the film giant’s losses continued to accumulate.

On the other side of Kodak are IBM and Apple. Once a leader in the computer industry, IBM left the PC sector in the early 2000s, as latecomers rapidly caught up with it. IBM then specialized in software and system design, transforming itself into the world leader in integrated solutions. Apple, which lost in the competition against IBM and HP in the PC market, made it big with such innovative products as the iPod, iPhone and iPad thanks to the creative mind of CEO Steve Jobs who urged “Think different.

Rochester, New York, where Kodak is headquartered, has long depended on the film company. Kodak provided jobs for generations after generations of residents and continued the philosophy of sharing started by the founder, who donated most of his assets to the Rochester community. Kodak has advanced technologies to the extent that it possesses some 11,000 patents. Many of its former employees have started their own businesses in making medical, optical and imaging equipment thanks to the know-how they learned at Kodak and its research infrastructure. Therefore, the number of jobs is increasing in Rochester despite Kodak’s fall. This is Kodak’s precious legacy.

Editorial Writer Lee Hyeong-sam (hans@donga.com)