And adapt while it had the chance
Could Kodak have predicted that digital photography would dominate over film? And if yes, how early could they have known?
If Focus would have existed at the time, Kodak could have known its film business would eventually be disrupted as early as 1983.
Kodak was the largest photography company in the world by far, until it missed the boat on the digital photography revolution.
“It would have been great if we’d had something like Focus to show management how serious the situation was”
One of the most famous technology disruptions in history is the disruption of Kodak, where its main product, silver halide photo film, was entirely replaced by digital imaging photography (more specifically, by CCD digital imagers). If Focus would have been around at the time, could Kodak have seen it coming?
In this example we investigate how Kodak’s management could have used Focus to predict what was going to happen to the photography industry. All the insights generated in this example were generated with invention data that was publicly available at the time. There is no hindsight whatsoever.
If Kodak would have had access to Focus at the time, they could have trained 2 AI classifiers. One for silver halide film technology, and one for CCD digital imagers. With these classifiers, Kodak could have identified all relevant inventions, and Focus would have been able to calculate the improvement speeds for each technology.
First let us look at the patent trend for each technology. All patents in this chart were identified with Focus AI classifiers.
As can be seen, CCD digital imagers only start out-patenting film in 2010, when film’s disruption was already well underway. If the goal is to predict the future, studying patent counts is unhelpful at best, and deceiving at worst.
Next, let us take a look at Focus’ technology improvement speed estimate, which is calculated using the same patent data, but then while looking at Focus’ cycle time and knowledge flow metrics rather than patent counts
In the chart above, you can see that the improvement speed for CCD digital imagers has been consistently higher than that of silver halide film since 1983. If technology A consistently improves faster than technology B, then disruption is only a matter of time.
If Kodak’s management would have had access to this insight in 1983, it would have had 17 years to come up with a plan before film sales went off a cliff in 2000.
Kodak’s management could have known that its film business was about to be disrupted almost 2 decades before it eventually happened.
With Focus, you can see technology disruption coming up to decades in advance. After training AI classifiers, which takes only a few hours, you can monitor the improvement speed of any technology. Among competing technologies, the fastest improving one ultimately always wins.