In the case study below, what sources of innovation are highlighted and would these sources work for a non-profit or governmental agency.

Kodak - Leveraging knowledge assets to create new innovation space Introduction The story of Kodak seems to follow a familiar pattern - from an entrepreneurial start-up using a novel technology which it brought to a mass market, through a sustained period of growth before disruption from a new technology which brought about its downfall. In 2011 Kodak filed for Chapter 11 bankruptcy and since then has been struggling to remake itself as a very different kind of business. It closed its film making operations and pulled back significantly from its once-dominant position in the domestic photography market - a move which many interpreted as a failure to master the digital revolution in both technology and user base. But behind this story a number of counter intuitive themes have been running. First it is important to note that from a technological standpoint Kodak was well aware of the significant shifts which digital imaging was likely to bring and indeed filed some of the earliest patents in the field. Like its rival Polaroid (also in Chapter 11 bankruptcy) Kodak's difficulties with the domestic photography market stemmed less from the technology than from the changing usage patterns enabled by cheap and widespread mobile phone availability and big changes in the way in which images were stored, retrieved and shared across the internet. It didn't help that the company was saddled with major commitments to physical film-making and distribution which meant its room to manoeuvre in the new innovation environment was constrained. It is also important to recognise that although Kodak made an early and significant commitment to R&D and sustained this through its long history, investing in technologies which linked in different ways to its core business of films and cameras. Like many giant corporations - 3M, Corning, Philips - this gave the company the chance to move into different fields and which enabled them to deal with a shifting external environment. Its core competence for many decades lay in coating complex emulsions on to a variety of surfaces and it was able to deploy this knowledge in many markets for example, in recording tapes and disk drives, as well as in photographic films and plates. The question now facing the company is whether - in the face of massive technological and market disruption - it is able to redeploy its considerable knowledge in new directions to allow the company to grow again? There are precedents for this - Corning for example moved from being a glass maker to become a major player in fibre optics and communications, and Philips has continuously reinvented itself around core knowledge, with the current shift in its lighting business from incandescent to slid state technology being the latest example. 3M famously began life with a disaster - the Minnesota Mining and Manufacturing Corporation found it was mining the wrong kind of carborundum and was forced to reconfigure itself rapidly to survive. The case which follows charts a seven year journey along these lines. It looks first at Kodak's significant history in R&D and knowledge accumulation before focusing on a particular transition - trying to

3 redeploy a powerful technology originally developed for their film business. In moving from film- making to high speed printing as an application domain they are also having to rethink themselves as a business to business (BtoB) rather than a business to consumer (BtoC) operation. But they are also trying to capitalise on another significant shift in the environment - the move towards low volume high variety and customisation of printing which used to be a high volume mass production domain. They characterise this as the move from a business model based on 'point and capture' (their old photo business which they understood well) to 'point and print' - essentially trying to deploy familiar marketing as well as technological knowledge in new ways. Looking back ..... In 1878 George Eastman demonstrated for the first time to the world the great convenience of gelatin dry plates over the cumbersome and messy wet plate photography prevalent in his day. Dry plates could be exposed and developed at the photographer's convenience; while wet plates had to be coated, exposed at once, and developed while still wet. In 1879 Eastman invented an emulsion-coating machine which enabled him to mass-produce photographic dry plates. A year later, Eastman began the first commercial production of dry plates in a rented loft of a building in Rochester, New York. In January 1881, Eastman and Henry A. Strong (a family friend and buggy-whip manufacturer) formed a partnership known as the Eastman Dry Plate Company. In September, Eastman quit his job as a bank clerk to devote himself full time to the business. Building a diverse business By the beginning of the 20th century, Kodak had become the 'Google' of its day, creating an entirely new set of businesses, many of which achieving significant and rapid growth: photography for the masses, motion pictures, and even the first X-ray film receiver. To support this Kodak had become a vertically integrated company and produced a great deal of what it needed internally. Through much of the 20th century it maintained involvement in activities as diverse as cow herding (for gelatin), forestry management (for chemicals), savings & loan banking (for employees) and even providing fire and rescue services. It became such a 'world unto itself' that it even redefined the concept of time in its internal operations! Some examples give a flavour of this internal diversification: Eastman Gelatin

4 At the end of 1881, customers complained about fogged and darkened plates. Gelatin - the key substance which provided the medium in which the active silver and other chemicals were held - was found to be the problem. Gelatin derives from cows and it turned out that Kodak's original gelatin supplier had changed its source. Where its original cows grazed on sulphur-rich mustard the later cows moved to different pastures and lacked sulphur in their diet and this had an impact on the quality of gelatin produced. To deal with this problem Kodak invested in its own herds of cattle to make sure the animals ate the right grass and thus ensured the consistency of photography! It was not until December 2011 that Kodak announced that it had agreed to sell its Eastman Gelatine Corporation business to Rousselot, part of the Dutch Vion Food Group. That decision was consistent with Kodak's previously announced intention to sell non-core assets to sharpen its focus on its digital growth initiatives. Within Kodak, Eastman Gelatin had been successfully managing the transition away from its traditional photographic market by increasingly expanding its sales into non-photographic categories, such as pharmaceuticals, edible protein and food/confectionery. Rousselot is positioned to help Eastman Gelatin continue this growth trajectory outside the photographic industry. Tennessee Eastman Corporation (now Eastman Chemical) World War I disrupted the supply from Germany of photographic paper, optical glass, gelatin, and many chemicals, including methanol, acetic acid and acetone. At the end of the war in 1918, Eastman Kodak founder, George Eastman, was determined to have an independent supply of chemicals for the photographic processes. Thus, Kodak bought the facilities to make its own supply including Appalachian forests which provided raw materials to make methanol and acetone and to have an independent supply of chemicals for the photographic processes. From its beginning more than 90 years ago, Eastman has grown to be a leader in the global chemical industry. Eastman Savings & Loan Eastman wanted to provide the employees with an institution that served essential financial needs, especially for mortgages. On February 1, 1996, Eastman Savings and Loan changed its charter and became ESL Federal Credit Union. Today, ESL offers members much more than just mortgages and is one of the largest and strongest credit unions in the country. It is the largest, locally owned financial institution in the Greater Rochester area and the largest credit union in New York State. ESL is in the top 1% of national credit unions ranked by assets. Since 1920 when George Eastman founded it, ESL Federal Credit Union turned into a full-service financial institution with $4.3 billion in assets. ESL employs more than 640 people locally and about 310,000 members world-wide. The company was twice recognized as one of the Best Small and Medium Workplaces in America by the Great Place to Photo: Kodak of 19th century

5 Work Institute and presented by Entrepreneur. Access to the credit union includes 19 branch locations and more than 40 ATM locations, a Contact Center, and Internet, online and mobile banking channels1. ...and even the Fire Department Eastman Kodak Company's Kodak Park plant included 121 major manufacturing buildings, nearly 30 miles of roads, 22 miles of fence line, two power plants, its own sewer system, water treatment facility and even the fire department. Since 1897, the Kodak Fire Department maintained a 24 hour presence at Eastman Business Park and responded to all sorts of emergency calls such as fires, chemical spills, odors, elevator rescues and emergency medical service2. Cotsworth Calendar The International Fixed calendar is a solar calendar that provides for a year of 13 months of 28 days each, with one or two days a year belonging to no month or week [(13 x 28) = 364]. It is therefore a perennial calendar, with every date fixed always on the same weekday. Though it was never officially adopted in any country, it was the official calendar of the Eastman Kodak Company from 1928 to 1989 because it fitted beautifully with the manufacturing schedule. The 13-month calendar (also known as the Cotsworth plan, the Eastman plan, or the Equal Month calendar) was in use at Kodak until 1989 for pay and reimbursement schedules. Commitment to technology As many other corporations which came to dominate the 20th century landscape, Kodak made an early and significant commitment to R&D. In 1912 George Eastman hired Dr. C.E. Kenneth Mees, a British scientist to organize and head a research laboratory in Rochester, one of the first industrial research centers in the U.S. Kodak Research became one of the pioneers of industrial research with General Electric and AT&T. Its record is impressive - amongst technological achievements Kodak can number several breakthroughs including electrophotography (1975), OLED* displays (1987), inkjet printer (2007), APEX 2008, stream technology 2009. Significantly it produced the world's first digital camera in 1976.