Hong Kong prides itself on the flexibility to remain competitive as a finance and services hub. Long may it be able to. The fate of Eastman Kodak, a faded icon of American capitalism now filing for Chapter 11 bankruptcy protection from its creditors, is a reminder of the need to adapt to change and innovate to avoid becoming an also-ran.
Kodak, the company that invented the box Brownie - whose pioneering technology empowered ordinary people to capture images of a century of change, from fashions to transport - itself fell victim to change. An early leader in digital camera technology, ultimately it relied on brand, marketing and acquisitions to maintain its position. This was a victory for executives who built their careers on dominance of a market for film. But it spelt disaster for a company rated one of the world's most valuable brands only 20 years ago, as digital photography and smartphones took over from film and cameras. A poorly executed acquisition strategy did not help. As a result, annual revenue has plunged from US$16 billion 15 years ago to a forecast US$6 billion last year.
In human terms, Kodak has shed all but a tenth of a global workforce that peaked at more than 140,000. Many of the remainder, half of them in the US, fear for their jobs under the Chapter 11 reorganisation to make the business viable again, and 25,000 retirees fear their company health-care benefits will shrink.
Ironically, the innovation and adaptation lacking at Kodak was to be found in abundance at its rival Fujifilm, which confounded a Japanese corporate reputation for resistance to change with a restructuring of its business model through effective diversification and acquisitions. As a result, its market capitalisation is now nearly 50 times that of Kodak.
By the same token, brand Hong Kong must be prepared to adapt to the change that is being wrought by the shift of economic power to Asia and slower growth in rich Western markets.