We live in an age of rapid innovation, so it should come as little surprise that even the technology for something as simple as a common lamp is in a state of flux.

According to a recent forecast, light-emitting diodes (LEDs) are vying for the spotlight. Mountain View, Calif.-based Strategies Unlimited, a market research firm covering the industry, projects robust growth for the LED downlight market over a five-year period.

LED downlights are defined as recessed, surface-mount, pendants, ceiling lights, spotlights and track lights that are used in commercial and residential indoor applications. The report, “LED Downlights Market Analysis and Forecast—2012,” projects the global market to expand by a compound annual growth rate (CAGR) of 28 percent between the years 2011 and 2016. The figure reflects the peculiar dynamics at play within the market. The report projects a CAGR in unit demand of 52 percent but an annual decline of 16 percent in selling price over the same period.

All of this is a good sign for the industry. Rising demand reflects growing consumer awareness, and falling prices reflect innovations that cut the costs of manufacturing and make the products more accessible to that growing legion of buyers.

According to the report, the biggest market expansion will occur in growing economies where new construction projects and expansion of the retail sector will fuel a CAGR of 167 percent. Still, in the advanced economies of North American and Europe, the market is projected to experience revenue growth of 31 percent and 27 percent, respectively. Much of that growth is being fueled by sales in big-box retail stores, where declining prices and growing consumer awareness have a great impact.