In 1975, Steven Sasson, an engineer at Eastman Kodak built an early prototype of the first digital camera. Over the next 14 years, he went on to develop the first DSLR camera (similar to the ones on the market today). It used memory cards and compressed the image.
This brilliant invention was however resisted by the marketing department of Kodak. By the time the company eventually embraced the digital revolution it was too late. Kodak filed for bankruptcy in 2012.
The Shipping industry has always been considered a dinosaur of sorts. It is one of the oldest forms of transportation that is still economically effective with low costs for high volumes of cargo. It has had no need to innovate. In this regard it is much like Kodak- a Company that made money off the photography industry every step of the way. Innovation of any sort seemed unnecessary and needlessly expensive. Why sell a digital camera when film cameras dominate the market?
Senior managers at large shipping companies readily admit that they are “reluctant” to embrace technological innovation. A recent study by TomTom Telematics showed that cost is often listed as the main barrier to technology adoption. The cost of most nascent technology can often be so high that they don’t deliver sufficient return-on-investment.
A relevant example here would be that of Maersk Line, the shipping giant which entered into (in hindsight) an expensive contract to provide Internet on its ships. This was a benefit for the employees but was primarily a means for its customers to keep track of their Reefer containers and as such was a hugely popular service.
What Maersk didn’t anticipate was the steep drop in costs and the rapid increase in Internet speeds. This left the Shipping Giant tied into a long-term contract and enabled competitors to provide a better service. This is the one of the most frustrating problems with pursuing innovation.
However, this tends to obscure the more real risk of not innovating.
Kodak was not the only company driven to bankruptcy by its failure to adopt technology.
Between 2004 and 2010, Netflix drove Blockbuster (the video rental service) to bankruptcy.
Toys R us and Borders – both driven to bankruptcy by Amazon.
Nokia – driven to its demise by the arrival of the iPhone.
Xerox, invented the PC but…
Yahoo, undervalued the search engine…
IBM, Blackberry, Myspace… the list goes on.
And this is the very real danger that a lot of major shipping companies face. Some of the most promising advances in safety and efficiency in the shipping industry is being pioneered by smaller companies. Be it the use of intelligent, intuitive Software to carry out effective Risk Management or the use of automation to minimize Crew resources. We are living in an age where innovation is being carried out at the click of a mouse. Why is it that so many still refuse to take advantage of the technology at their fingertips?
It is okay to adopt a cautious approach to what is possibly ground breaking innovation. The challenge is not to be left too far behind.
And this is what Companies need to learn. Embrace technology, cos if you don’t somebody else will.
About Nautix Technologies
Nautix Technologies is a modern maritime software company that provides next-generation SaaS products to ship owners and technical managers. Contact us to find out more.