Innovation Investment

Kodak had a virtual monopoly on the United States photography market, and it made money on every step of the photographic process. If you wanted to photograph your child’s birthday party, you would likely be using a Kodak Instamatic, Kodak film, and Kodak flash cubes. You would have it processed either at the corner drugstore or mail the film to Kodak and get back prints made with Kodak chemistry on Kodak paper. It was an excellent business model. The first digital camera was created by Steven Sassoon in 1973. The basis for the US patent was filled in 1977 and issued in 1978. In 1975, this Kodak employee invented the digital camera. His bosses at Kodak never let it see the light of day. Why are managerial decision-making mechanisms important in determining innovation outcomes in the short-term and competitive advantages of firms in the long-term? Why do scientists and engineers care about internal resource allocation decisions including innovation budgeting?