Most industries experience change on a fairly regular basis. Although there have been many significant technical achievements in the 100 years since Thomas Edison invented the incandescent lamp, the single most transformative development of the past decade has been the adoption of LEDs. This one technological transformation has served as the catalyst for a revolution in lighting.
Solid-state lighting’s impact can be seen in every aspect of the industry, from changes in product development and manufacturing to distribution processes to the way in which lighting designers call upon this new source in design applications. Never before have designers had so many options available to them.
The innovations of the past decade have charted the lighting industry on a new course. At times it has felt like a very bumpy road, as the industry works to keep pace with each new development. This has led to some uncertainty, and the industry as a whole has had to learn how to adapt and right itself more quickly than it previously was used to. The one constant over the past few years has been change itself, and in 2016 the lighting community should expect more of the same. Let’s look at some of the areas under transformation.
As the lighting community has rebounded from the recession of 2008–09, firms have seen a steady pace of work. Typically, lighting firms are small, and that size has provided a welcome level of flexibility, allowing designers to stay fairly nimble through difficult economic times. But it has also meant that there is now a great demand to fill vacant positions in firms. That, coupled with a general low supply of new graduates into the lighting design profession, means that most firms are operating understaffed.
A high level of demand across the United States and around the world has also meant that many firms are looking to expand into new cities. For example, established offices such as New York–based Fisher Marantz Stone opened a new location in Seattle. Los Angeles–based Kaplan Gehring McCarroll, which celebrated its 30th anniversary in 2015, made a move east and opened a New York City office. (The firm had previously expanded to Shanghai.) HLB Lighting Design, which already has four U.S. offices—in New York, Los Angeles, San Francisco, and Boston—opened a new branch in Miami.
Even younger firms, such as Brian Orter Lighting Design (BOLD), which was founded in 2008 in New York, have grown to the point where a second location has proven opportune. In 2015, BOLD opened a Los Angles studio and established lighting designer Dawn Hollingsworth serves as its design director.
In the past few years, a number of midcareer professionals, those who have been in the industry 10 to 15 years, have decided to branch out and open their own offices. One such example is newly formed Loop Lighting. The New York City firm was launched in 2015 by Alina Ainza, John Newman, and Ryoko Nakamura.
U.S. firms aren’t the only ones experiencing growth. Electrolight, a lighting firm which was first established in Australia in 2004 by Paul Beale, opened a London office last year. And at the end of 2015, the firm announced that it had opened a San Francisco satellite, to be led by local lighting designer Claudio Ramos, previously of BanksRamos.
With legacy firms expanding and a new wave of younger firms branching out, the diversification of lighting firms and practitioners appears strong, and these successes lay the groundwork for other firms contemplating such moves.
Last year saw the debut of the Certified Lighting Designer (CLD) program, and the program began accepting applications on April 29. According to Theresa Nissen, director of training and professional development for the International Association of Lighting Designers (IALD), 11 candidates have completed the CLD program and earned the credential since that launch. The breakdown by nationality is as follows: six from the United States, two from Australia, and one each from Singapore, Canada, and Italy. Better still, 81 applications are presently at various stages of completion.
The lighting community has struggled throughout its maturation with the issues surrounding qualifications and what form of recognition might be best suited for lighting designers: credentialing, certification, or licensure. The 2009 Texas House Bill 2649 incident that would have made it illegal for a lighting designer to practice their craft in the state if they were not licensed, was a wake-up call for the architectural lighting community and served as the rallying point to seriously address qualifications once and for all.
In response to the Texas episode, the IALD formed a task force and, from 2010 through 2014, went through a rigorous and methodical process to evaluate credentialing that included fact finding, member surveys, public discussion, the development of a list of core competencies, and two rounds of testing to determine if the application process and program website was clear and user-friendly.
In the year ahead, it will be interesting to see how the CLD program’s numbers grow. And while it was created by the current generation of practitioners, it was developed with future generations in mind. It will be interesting to see how Millennials who are currently enrolled in lighting programs or recently graduated engage with credentialing.
At the Parsons Lighting Design MFA Program’s 30th anniversary symposium in October, titled “Light Years: 1985–2015–2045,” a panel made up of current students and recent graduates overwhelmingly expressed a lack of interest or desire to participate in any kind of formal professional structure. This was most likely an anomaly, but one that the lighting community and the CLD program should keep in view as this generation moves into the workplace.
Impact of New Technologies
Among the most significant developments in the past few years have been the evolution of lighting from analog to digital and the introduction of the Internet of Things. A luminaire is no longer just a stand-alone object but a key component of a larger building system. In the year ahead, we can expect to see more product announcements that speak to this “smart lighting” trend. Industry analysts expect the total market for smart lighting to reach $8.14 billion by 2020.
More focus will also be given to OLEDs and their development. In September, the U.S. Department of Energy’s (DOE) solid-state lighting (SSL) program hosted stakeholders at a meeting in Pittsburgh to discuss OLED technology, advances in research and development needs, opportunities for collaboration, and the requirements for increasing OLED market viability. The DOE’s OLED testing program, which was launched in 2014, generates a report each year, unlike the two-year time frame for other DOE R&D projects. The greater frequency of feedback will allow manufacturers to more quickly adopt the latest technical information into their OLED product development.
The Business Landscape
The past decade has seen a steady round of mergers and acquisitions, initiated by Philips’ 2007 acquisition of Color Kinetics. Since then, LEDs have become the light source of choice, and a pattern has arisen wherein established lighting companies first acquire an LED business, and then a lighting controls manufacturer.
For a time, there were even some acquisitions of companies in the daylighting sector. Industry analysts predict that the global luminaire market will grow at a compound annual growth rate of 2.07 percent from 2014 to 2019.
As solid-state lighting has become more prevalent, a number of global electronics companies such as Toshiba, Samsung, and Panasonic entered into the lighting market. But with the changing demand for LEDs worldwide and a saturation in the marketplace, these companies have all but retreated from the lighting arena, despite predictions that the global LED lighting market will grow at a rate of 25.89 percent from 2014 to 2019. The industry seemed to be heading toward a state where it was made up of only a few large publicly traded lighting conglomerates and a few small and mid-sized independently owned lighting companies. But then a big surprise caught many off guard: Legacy companies such as Osram and Philips began divesting their lighting businesses. GE Lighting has skirted the issue, claiming it is “transforming” its lighting business. It’s almost unimaginable to think that these three companies, mainstays of the pre-LED industry, might no longer be part of the lighting equation.
The “sell-off” process began in 2013 when Siemens sold Osram. In January, Osram announced that it had decided on a name for what it calls the “carve-out” of its general lighting lamps business, a move that was approved in June 2015 by the supervisory board of Osram Licht AG. The company’s new name is LEDVANCE.
According to the Osram press release, “the LEDVANCE product portfolio will include traditional lighting, modern LED lamps and standardized over-the-counter luminaires, as well as connected and intelligent lighting solutions for smart homes and smart buildings.” The company will be led by Jes Munk Hansen, who has been overseeing the lamps business for the past year, after his previous tenure as president and CEO of Osram Americas.
The future is unclear as to how things will play out for Philips, which was working on a deal to sell its lighting-components and automotive-lighting unit for $2.8 billion to a Chinese investor, Go Scale Capital, an investment fund led by Chinese venture-capital firm GSR Ventures. In October, The Wall Street Journal reported that “regulatory concern in the U.S.” by the Committee on Foreign Investment in the U.S. (CFIUS) had the deal in limbo. CFIUS had also halted the completion of Philips’ sale, also to Go Scale Capital, of 80 percent of its interests in the Lumileds brand, valued at $3.3 billion, until all of the committee’s concerns had been addressed.
In January, LEDinside, a market intelligence resource, reported that Philips had terminated the agreement with Go Scale Capital due to the “inability to resolve CFIUS’ unforeseen concerns.” Philips in turn was beginning talks with other interested parties, according to the report. This latest development does not impact Philips separation process of its remaining lighting business from Royal Philips.
This fall, GE announced it was launching “Current, powered by GE,” an “energy company that integrates GE’s LED, Solar, Energy Storage and Electric Vehicle businesses.” Maryrose Sylvester, president and CEO of GE Lighting, will lead the new company.
The change in makeup of the lighting industry should give us pause, if not cause for alarm. In all of these industry moves, there are long-term implications for product availability and quality control, as everyone learns which lighting companies will remain on the scene.
While 2016 promises continued innovation of lighting technology, the question of who will be responsible for its delivery will remain somewhat in flux, as the lighting industry continues to adopt to an LED world. •