Creative Destruction: LEDs, the IoT and More Disruptive Lighting

At the 2017 Strategies in Light conference, Robert F. Karlicek, Jr., spoke about creative destruction in the lighting industry brought on by LED technology and the internet of things (IoT). Karlicek is a professor and director for the Center for Lighting Enabled Systems and Applications at the Rensselaer Polytechnic Institute, Troy, N.Y.


In 1942, economist Joseph Schumpeter coined the term “creative destruction” to describe the impact of innovation. In the lighting industry, LED technology and integration of IoT services are disrupting traditional lighting and legacy business structures, supply chains and distribution channels.


For the majority of the market, the primary focus is energy efficiency and performance. The high efficiency and longevity of LED products makes them appealing for both new and existing construction. This is destructive to traditional lighting manufacturing and distribution. 


In the specification-grade segment, innovation focuses on adding value—new form factors, features, color tuning, dimming, data production, IoT integration and visual light communication. As color tuning and IoT concepts continue to enter the market, Karlicek believes this segment will grow.


The rate of LED product innovation is so rapid that the market is seeing a broader range of styles and performance, highly compressed product cycles, and less standardization of components and how they connect. Karlicek said the lighting controls industry is at the juncture of change: LEDs’ lower wattage and additional sensors due to IoT integration will erode controls’ energy-saving value proposition. Meanwhile, its potential for flexibility, color tuning/circadian lighting, integration with display lighting, and data production/IoT integration offers new value. LED technology will continue to develop in areas such as laser-based lighting, pushing beyond traditional form factors, and using LEDs for both general lighting and information displays.


Circadian lighting is of particular interest because it could be transformative in how we think about lighting controls and their primary value. By adjusting intensity and color output, lighting systems can support circadian health.


Karlicek said some researchers and designers believe enough is known to begin implementing circadian lighting schemes. However, more research is needed to define optimal spectral distributions for circadian health.


“Gradually, new lighting specifications for optimal human performance will be redefined based on new research findings,” Karlicek said. “I say redefined because many of these specifications were defined decades ago for older light sources. LED lighting provides new degrees of freedom for spectral control, but now much of this human-factors research needs to be redone with data obtained from properly designed experiments.”


IoT a force for change


In the meantime, the IoT offers the biggest potential for creative destruction as it may subsume lighting into other disciplines and presents new threats and opportunities to contractors based on whether they can deliver required skill sets. As the IoT emerges, however, serving this field can be difficult due to the wide variety of proprietary systems and lack of interoperability between systems.


“Traditional sales channels will need to become savvy in terms of both lighting standards and networking protocols,” Karlicek said. “As lighting systems use sensors to become aware of their environment and supply data to other building services, controls supporting those capabilities and services become critically important, and sales channels and installers will increasingly need to have a degree of computer and network systems expertise in addition to their existing skill sets.”


Karlicek believes creative destruction will go on as LED technology continues to develop and various trends streamline from their messy beginnings and provide clear value propositions and standardized performance, installation and interoperability. As it unfolds, this destruction will result in winners and losers along the lighting supply chain.


ECs should expand their understanding of lighting, wireless controls and information technology to meet specifications (on which it will become increasingly difficult to substitute based on what distributors have available or what the contractor is comfortable with).


Karlicek said ECs could collaborate with IT specialists to address increasingly complicated installation demands. ECs who understand lighting design, DC power distribution systems, networking and control system programming may find themselves more in demand. Many of these skills also translate to other areas where conventional electrical work interfaces with the IoT.


“We are only at the beginning of a long and challenging process of redefining lighting,” he said. “The winners will be agile in developing the skills and/or business partnerships to meet customer needs and alert enough to avoid picking the wrong technology horses in a rapidly changing industry. Striking the right balance between being on the cutting-edge for some things and being a fast follower for others will be critical to success.”

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