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Innovation in Global Industries: U.S. Firms Competing in a New World - Collected Studies
supporting development and diffusion of new lighting technologies and speculate about how these efforts may affect the location of R&D, manufacturing, and headquarters of surviving lighting producers.
EVOLUTION OF THE LIGHTING INDUSTRY
Globalization of Lighting Production
The global lighting market in 2004 was worth some $40 billion to $100 billion, about one-third of which represented lamps.1 U.S. apparent consumption of lamps, fixtures, and other equipment totaled about $14.8 billion in 2004.2 U.S. production of lamps grew steadily until the early 1970s, then fluctuated over the next 20 years, stabilized during the 1990s at about 1970 levels, and finally fell somewhat at the start of the 21st century, as shown in Figure 1.
The eventual leveling off and downturn in U.S. lamp production in the 1990s can be explained, in part, by a steady increase in imports over the past two decades. Total imports, as a percentage of U.S. apparent consumption, increased from less than 20 percent in 1989 to around 50 percent in 2004, as shown in Figure 2.3
About half of the imports come from China, Mexico, and Japan, with China representing the largest share as of 2004. In 1989, less than 3 percent of lamps were imported from China. By 2004, Chinese lamp imports represented 26 percent of all lamp imports, having grown more rapidly than imports from any other supplier nation, and 10 percent of apparent lamp consumption in the United States. Once concentrated in the hands of three large manufacturers, the incandescent bulb industry has new competitors, primarily low-cost manufacturers in Asia.
In the fixtures industry, broken down in Figure 2, these trends are more intense, with 86 percent of all fixtures imports in the United States arriving from China by 2004. Increased fixture imports are the result of both incursion of lower-cost Chinese manufacturers and shifting production abroad by U.S. firms that seek lower-cost manufacturing sites. An exception to this trend is Genlyte
Hadley et al. (2004) cite the figure of $40 billion, one-third of which represents lamps, but publicly available estimates of the size of the global lighting industry vary greatly, and the firm Color Kinetics in a communication with us cites the figure of $100 billion based on data from Fredonia Marketing Research.
Apparent consumption equals U.S. production plus imports less exports, where U.S. production is measured as value of shipments from Bureau of Economic Analysis data, and import and export data are from the U.S. International Trade Commission.
Not shown in Figure 2 is an additional trade category “Other Lighting Equipment,” for which imports increased from 38 percent in 1989 to 57 percent in 2004, with China’s share of imports growing from 24 percent in 1996 to 32 percent in 2004.