Research Policy 43 (2014) 1730–1746 Contents lists available at ScienceDirect Research Policy jo ur nal ho me p age: www.elsevier.com/locate/respol Light emitting diodes and the lighting revolution: The emergence of a solid-state lighting industry Susan Walsh Sanderson a,1 , Kenneth L. Simons b,∗ a Lally School of Management, Rensselaer Polytechnic Institute, 110 8th Street, Troy, NY 12180-3590, USA b Department of Economics, Rensselaer Polytechnic Institute, 110 8th Street, Troy, NY 12180-3590, USA a r t i c l e i n f o Article history: Received 1 June 2012 Received in revised form 11 October 2013 Accepted 25 April 2014 Available online 13 August 2014 Keywords: Industry emergence Technology evolution Technological trajectories Market niches Patent litigation Disruptive technology a b s t r a c t Emergence of new industries from evolving technologies is critical to the global economy, yet has been relatively understudied due to the paucity of available data. This study draws lessons on industry emer- gence, by analyzing how a solid-state lighting (SSL) industry grew out of light emitting diode (LED) technologies that evolved for half a century, with participation by tens of thousands of researchers in universities, national laboratories, and firms. Using data on publications, patents, and firms combined with business history we trace the evolution of SSL through a succession of market niches. At times a few researchers with unorthodox research approaches made breakthroughs that greatly advanced particular technology trajectories and pushed LED research in unexpected directions. A succession of LED market niches advanced the technology and provided profits to incentivize continuing research while reduc- ing cost and improving efficacy of LEDs. Innovating firms developed a thicket of patents and captured substantial profit, but were embroiled in extensive litigation that was ultimately resolved through cross- licensing. A major new generation of lighting products is now disrupting the traditional lighting industry. Although the leading incumbent lighting firms all invested early and heavily in SSL, the industry’s future leadership is uncertain. © 2014 Elsevier B.V. All rights reserved. 1. Introduction The light emitting diode (LED), first commercialized in the 1960s, is now poised to replace most light bulbs with a high-tech alternative known as solid-state lighting (SSL). If SSL achieves even a little of its expected potential, it will save energy and money compared to existing light bulbs (incandescent and fluorescent), spur radical approaches to lighting design and products, and inte- grate with electronic circuitry to facilitate surprising applications. By 2013, SSL replacement bulbs are common in stores and have reached a cost low enough to be attractive to many consumers. Firms with SSL products have been flooding the lighting industry: light emitting diode producers like Cree making solid-state replace- ment lights; entrepreneurial startups like Soraa and BridgeLux creating new solid-state lighting devices; and firms like Samsung and Sharp with experience in related technologies, now competing ∗ Corresponding author. Tel.: +1 518 276 3296; fax: +1 518 276 2235. E-mail addresses: sandes@rpi.edu (S.W. Sanderson), simonk@rpi.edu (K.L. Simons). 1 Tel.: +1 518 276 2933; fax: +1 518 276 8661. with incumbent light bulb makers Philips, Osram-Sylvania, and GE in the newly emerged solid-state lighting industry. This study draws lessons from the co-evolution of basic science, industrial technology, and niche applications that are stepping-stones to a mass market application. Development of today’s SSL products required a maze of technology evolution, with false starts and unexpected turns. The many thousands of researchers and organizations who developed these technologies experimented with poorly understood materials, pioneered man- ufacturing methods, and redesigned complementary technologies such as encapsulants, phosphors, driver electronics, heat sinks, and fixtures to create light-emitting properties they needed. As these players interacted and competed, they created new uses and mar- kets for their technologies, from the initial red indicator lights to calculator and watch displays, signs, flashlights, brake lights, traffic lights, architectural lights, and backlights for mobile devices and televisions. Myriad characteristics and colors that were developed along the way combine to make today’s efficient white light. Solid-state lighting development was by no means a discrete event, but grew out of multiple generations of technology, innova- tion, and niche applications. Once mere indicator lights, LEDs made steady inroads into niche markets that provided stepping-stone profit opportunities to help propel LED science and technology, http://dx.doi.org/10.1016/j.respol.2014.07.011 0048-7333/© 2014 Elsevier B.V. All rights reserved.