I recently had the pleasure of interviewing Robert F. Karlicek, Jr., PhD, Professor and Director, Center for Lighting Enabled Systems & Applications, Rensselaer Polytechnic Institute. The topic: lighting industry disruption, specifically as a process called “creative destruction.” The interview informed an article I wrote for the June issue of tED Magazine.
DiLouie: In your talk at Strategies in Light earlier this year, you brought up the concept of “creative destruction” brought on by LEDs and the Internet of Things (IoT). What is creative destruction, and how do you see it currently applying to the lighting industry?
Karlicek: The concept of “creative destruction” is primarily attributed to Joseph Schumpeter, an economist who, in 1942, used it to describe the disruptive process of transformation that is associated with innovation. (See his book Capitalism, Socialism and Democracy, 1942). In the lighting industry, the creative aspects involve high efficiency LEDs that have long lifetimes and can offer new lighting based services, and the integration of various “Internet of Things” or IoT services that both depend upon and add new services to lighting systems. The disruption is to all forms of old, non-LED lighting, disruption of legacy business structures, supply chains and distribution channels and more (e.g. lighting control systems).
DiLouie: How do you see creative disruption as applying differently to the separate lighting markets—the white goods segment (focused on energy savings and maintenance) and the specification-grade segment (focused on innovating on value)?
Karlicek: At the level of energy efficient lighting, the white LED light source can clearly replace just about any form of incandescent, discharge or fluorescent lighting, but with moderate to significant improvements in both energy efficiency and lifetime (for a well-designed product). Increasingly, this is destructive to the manufacturers of older lighting sources (bulbs and tubes), but also has significant impacts on lighting control systems where previously, the value of the control system could be paid back in a reasonable period of time through energy savings, but with LED, the old value proposition lighting control is significantly weakened.
In the specification grade segment, LED lighting can add value by enabling new form factors and lighting features unencumbered by relying on a specific form of bulb or tube. Today, LED lighting can be used for color tunable lighting with good dimming characteristics, and since it is electronic lighting, the LEDs themselves can transmit both light and data, as some are seeing with so-called LiFi concepts for indoor localization that use digitized lighting with a camera app on a cellphone or tablet. These capabilities are simply not possible without LED lighting sources. Of course, LED capabilities in color control also have applications in human health and improved worker productivity, but these areas are only now emerging as continued research on lighting human factors involving lighting spectrum control opens new applications of LED lighting systems in a variety of markets (e.g. healthcare, eldercare, commercial and education).
DiLouie: If the market retains its traditional stratification between white goods (traditionally 80-90% of market) and spec-grade (traditionally 10-20% of market) segments, what impact would that have on channel segments like electrical contractors and distributors?
Karlicek: Let me first state that I am not an expert on lighting channels and distribution, so my views might be a bit distorted. In the near term, I would suspect that the impact on the market segmentation and channel segments would be minimal, except that there will be, for a while, many more LED products available and a broader range of styles and even quality (color stability and flicker can still be issues for some low cost LED lighting systems). Perhaps one of the biggest near term challenges is that the rate of innovation is so fast, product lifecycles can be short – so the availability of a given LED light source may be time limited (replaced quickly by a newer version with slightly different specifications). Over time, however, I would expect to see growth in the spec-grade markets at the expense of white goods as color tuning and IoT control concepts continue to enter the market, and lighting companies move to offering more sophisticated LED lighting capabilities and features in order to survive.
Electrical contractors and distributors will need to significantly expand their understanding of lighting, wireless controls and information technology (IT) to meet lighting and control system design specifications. Here there will continue to be some challenges, as I believe that the days of ignoring what the designer specifies for an installation, deciding instead to install what the distributor has on hand and the contractor is comfortable with are no longer tolerated.
DiLouie: Controls appear to be in a strange place as a potential beneficiary and victim of creative destruction. On the one hand, their energy-saving utility is being reduced by increasing LED efficacy. On the other hand, LED controllability and digital control create new potential applications. What do you see as the primary impacts of LED on controls now and moving forward?
Karlicek: Control systems are indeed in a particularly interesting situation. For the time being, regulations (like Title 24 and/or other requirements) will drive the installation of some forms of lighting control regardless of their inability to pay for themselves through energy savings over a practical period of time. Gradually, however, control system benefits will be through managing the many capabilities of advanced LED lighting systems to deliver new value-added services. This invariably is where IoT comes in, and will require lighting control systems to become smarter, even autonomous or self-commissioning (sort of like self-driving cars). Critical in this space is the user interface – which will need to become much simpler to use. One wild card in this space will be the emergence in voice commands (e.g. Siri or Alexa) where a simple voice/system interface that can interact with the user become important. One could even envision a system that reminds the user that a lower CCT might be best for a restful night’s sleep given the time of day.
Smarter, networked control systems will, however, face another challenge, because as lighting becomes more connected, use more sensors to figure out how to light a particular space, and employs greater computer power to be able to make those decisions, power consumption will go up. Control companies will, as always, need to show that the value of controls is justified by new benefits of properly control, but it will be much harder to do because the currently emerging benefits (on human health and productivity) are qualitative and may not of value to many facilities managers (at least not at the price point needed to provide that level of control). Gradually, with continued research on lighting and human health and wellbeing, the value proposition will be proven, but much more research is required.
DiLouie: One potential for LED technology is circadian lighting. How is LED uniquely suited to this? Where do you see this trend moving forward? On the one hand, we are confirming that we already know—that higher light exposure of shorter-wavelength light during the day, coupled with lower light exposure of higher-wavelength light at night, is good. On the other hand, application and producing standard templates remains challenging.
Karlicek: LED lighting is uniquely suited for circadian and human performance management primarily because of its color tunability. As most are aware, there are products now available from some companies claiming to be better for health and sleeping, but frequently with precious little or no clinical data to back up the claims – beyond a general feeling that blue in the day is good and too much blue at night is bad. Based on our Center’s interactions with both lighting companies and researchers in this space, I believe that there is still a lot more research needed to properly define the optimal LED lighting wavelength distributions (spectral power distributions) for optimal human outcomes. There are some researchers and designers who feel we know enough already to get started (and lighting companies are doing that now). Gradually, new lighting specifications for optimal human performance will be re-defined based on new research findings. I say re-defined 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.
DiLouie: Another potential for LED technology is to serve as infrastructure for IoT strategies. This perhaps has the biggest potential to disrupt the traditional lighting sales channel. What impact will the IoT have on demand for lighting controls and the traditional sales channel?
Karlicek: IoT will continue to look at lighting primarily as a source of power for its varied sensors that are needed to gather environmental (temperature, air quality) and even occupant/activity data. Traditional sales channels will need to become savvy in terms of both lighting standards and both wired and wireless networking protocols. As lighting systems, through sensors, become aware of their environment and supply data to other building services (e.g. HVAC, occupancy planning, security, etc.), 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. For the time being, however, properly serving this emerging field will be difficult because of the wide variety of proprietary systems and the lack of interoperability between platforms from different companies. This will likely take some time to sort out since both LED lighting design, sensing systems and IoT protocols continue to evolve quickly.
DiLouie: “Lighting as a service” has been touted as a potential future direction for various players in the lighting industry. Assuming certain trends continue to mature, what might this look like? What channel players would be affected (winners and losers)?
Karlicek: Lighting can be a service through spectral control (improved worker productivity and better healthcare outcomes), and it can also be a service through powering a bevy of environmental sensors for building systems management, as mentioned above. Channel players who embrace an awareness in the latest communications and control technologies, especially at the technology edges (lighting – building system control interfaces, LiFi, lighting for health, etc.), will increasingly be in greater demand.
DiLouie: What technologies are now emerging that will continue the process of disruption in the lighting industry?
Karlicek: I believe that there are several that will continue to drive disruption. At the light source level, some researchers are beginning to look at lasers, instead of LEDs, for lighting. These will likely become used in niche applications (spotlights, stadium lighting, etc.). At the luminaire level, designers will increasingly look to escape fixture form factors used by legacy light bulbs and tubes, driving new lighting capabilities requiring new methods of installation (e.g. sheets of light sold in rolls, or similar concepts). Increased importance of color tuning and spectrum management will likely emerge as value propositions tied to human psychophysiological well-being get redefined. Finally, I expect that we will see an increasing integration of lighting systems and information display technology (e.g. projectors that illuminate or project images or both, and some early systems are now commercially available). A variation on this theme would be high efficiency LED displays (not LCDs or OLEDs) that can replace windows and/or skylights and be bright enough to be considered sources of illumination. Some of this may seem farfetched, but companies are already talking about these kinds of lighting system product development.
DiLouie: How will all of this affect electrical contractors? What can electrical contractors do to make sure they’re winners in an LED/IoT future?
Karlicek: Electrical contractors will need to pair up with IT specialists and learn to work together to manage increasing complicated installation demands. Ideally, electrical contractors who understand programming, networking, lighting design as well as conventional electrician skills will be needed. In many cases, this will require completely different training programs – not only for lighting, but for any field where IoT interfaces with conventional electrical work.
DiLouie: How will all of this affect electrical distributors? What can electrical distributors do to make sure they’re winners in an LED/IoT future?
Karlicek: I think that this is a harder question because of the current state of proprietary standards and interoperability challenges, but ultimately, they will need to become – either alone or through partnerships, both an electrical and networking systems supplier.
DiLouie: If you could tell the entire electrical industry just one thing about disruption posed by LED/IoT, what would it be?
Karlicek: Start investing in re-educating your workforce, and pushing your local schools to develop the curriculum needed to train future installers and distribution managers so they can be skilled at AC and DC power distribution systems, networking and advanced control and lighting systems installation.
DiLouie: Is there anything else you’d like to add about this topic?
Karlicek: I would add that we are only at the beginning of a long and challenging process of redefining of lighting, networking and complex integrated systems. 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 or being a fast follower for others will be critical to success.