Yesterday it was confirmed that Kodak has filed for Chapter 11 bankruptcy protection in New York; the final chapter in a long and painful fall from market dominance in the 1980s.

This humiliating ‘Kodak moment’ came about largely because the camera brand failed to embrace digital technology.

The company invented the hand-held camera also claims to have invented the digital camera in the 1970s, but Kodak executives sat on the technology for fear of cannibalising its core business of selling films.

A press statement said: “The business reorganisation is intended to bolster liquidity in the US and abroad, monetise non-strategic intellectual property, fairly resolve legacy liabilities, and enable the Company to focus on its most valuable business lines.”

Founded in 1880, Kodak reached its heyday in the 1980s with 145,000 global employees – a number that now stands at just 19,000.

Its market value has shrunk to less than $150m from $31bn 15 years ago, and it hasn’t seen profitability since 2007.

Management could tell the writing was on the wall but hid its head in the sand – only in 2003 did it announce that it would stop investing in its traditional product to refocus on digital printers.

In an interview with Econsultancy in 2010, Kodak chief marketing officer Jeffrey Hayzlett said the company did 70% of its business in digital and was attempting to reinvent the way it did business.

He spoke about how Kodak was using social media to engage with its customers, but the new look digital Kodak was locked in permanent decline.

Last year it announced a plan to sell 1,100 patents and this month it restructured its business units from three to two – but sadly it was just too late.

Kodak, which has secured a $950m credit line from Citigroup, will keep operating while it works out what to do with the rest of the business. But with $5.1bn in assets and nearly $6.8bn in debts the future doesn’t look good.

The lesson to take from Kodak is that no matter how big companies are, they need to innovate or risk becoming obsolete.

In the 1970s who would predict that Kodak, the company that provided Neil Armstrong with the equipment to take photos on the moon, would end up being seen as a company associated with technologies that were out of date.

There are certainly parallels to be drawn with Yahoo; CEO Jerry Yang’s departure marked the end of a poor run for the company largely contributable to his refusal to adapt the business.

Yang focused on search at the expense of other key business areas in much the same way as Kodak refused to let go of camera film.

Right now it is unthinkable that the likes of Apple and Google will fall into the same trap as Kodak as they are constantly working on new projects and looking to bring out game-changing products.

Google famously allows staff to work on their own projects for 20% of the working week, which has resulted in wildly popular products including Gmail and Google Reader.

So while these companies remain focused on trying new things and aren’t afraid to fail in new endeavours, they’ll stay out of trouble. But that’s probably what people said about Kodak once upon a time.