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Which firms will successfully ride this new wave of innovation and what impact these changes will have on incumbents are not yet determined. Although the first wave of lighting innovation in the early 20th century spawned the development of global companies like GE, OSRAM, and Philips, these 21st-century innovations will create challenges for incumbents. New firms are emerging at all levels of the value chain to address the opportunity presented by solid-state lighting technologies.

In this chapter we contrast traditional lighting technologies with LED technologies. Traditional lighting technologies we define as incandescent, gas-discharge, and electric arc lighting (which includes fluorescent, high-intensity discharge, mercury and sodium vapor, metal halide, and neon lamps). We exclude lighting technologies such as chemiluminescence that yield insufficient light for illumination (such lights can be seen but not seen by). LED technologies (including organic and polymer LEDs) are the only nontraditional technology considered because LEDs are the only alternative lighting approach that has reached sufficient maturity to be considered commercially viable in the trade, technology, and technical literatures.

This chapter analyzes changes in lighting technology over the past two decades and its implications for U.S. industry competitiveness. We explore whether the rise of global competition is limited to low-cost manufacturing or whether strategic centers of decision making and research are moving away from the regions and firms that once dominated the industry. We examine the causes of these changes and what aspects of innovation in lighting, particularly in the arena of research and development (R&D), have changed since the 1990s. We speculate about the implications of these changes for firm strategy in the new era of intense global competition, we analyze how national policies have affected the development and diffusion of traditional and new lighting technologies, and we explore how public policy can best address the challenges and opportunities offered by solid-state lighting to aid countries in their struggles to conserve energy and reduce global warming.

We are entering an era of faster-paced competition as the lighting industry, which has been dominated by a few firms (at least in the lamp sector), faces competition from new technologies, firms, and regions. Asian firms, as well as firms headquartered in the United States and Europe, have performed strongly in patent invention for solid-state lighting and are making key contributions to these new technologies. Both new firms and incumbents are investing heavily in solid-state lighting technologies, and it remains to be seen which firms will predominate.

Public policy will likely play an important role in future developments by stimulating demand for energy-saving lighting, providing funding for R&D, and incubating startup companies as they seek to commercialize these new technologies. But retail firms like Wal-Mart are increasingly playing a role in the diffusion of energy-saving lighting technologies. We compare the policies of countries



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