In 1987 the world of telephony saw something akin to a miracle. All over Europe, as well as in the US and Japan, companies, universities and research institutions were rushing to develop their own technical standards for the emerging mobile phone market. A self-defeating competitive mess loomed, just as earlier the videotape format war between Sony and JVC had hampered growth in that market for a decade.
Then Europe came up with the first agreed GSM technical specification. All the leading players in Europe lined up behind it, and five years later Nokia launched the first commercial GSM digital mobile phone. The mobile revolution was born.
This is the kind of thing the proponents of open innovation would like to see happen in LED lighting. Nils Erkamp of TNO, the Netherlands Organisation for Applied Scientific Research, believes the industry is at a tipping point. Two key developments – digital controls and human-centric lighting – could propel the industry into a fruitful era of mass sales and high profits, with widespread economic and social benefits. Or plunge it into a morass of incompatible standards, competing claims and customer disillusion.
Open innovation in LED lighting is the brainchild of an EU-commissioned project, SSL-erate (SSL is short for solid-state lighting, which is techspeak for LED lighting). The initiative was set up to encourage coordination within the European SSL industry. The aim is to promote mass acceptance of the technology, helping the market to grow, create jobs and improve health and wellbeing. As part of the project, a web-based platform has been established called Lighting for People (lightingforpeople.eu) to share information and facilitate collaboration on human-centric lighting applications.
So far, so idealistic. But if open innovatoin is to have any real effect in the lighting world, hard-nosed commercial companies must be persuaded to subordinate their own narrow interests to the wider good. Competition is in the very genes of our capitalist system – so can it really happen? ‘It’s a difficult thing,’ acknowledges Erkamp. ‘It means they have to realise the value in it, because at the end of the day a company invests its own money and resources and wants a return on that investment.’
When lighting companies claim without hard evidence that their method is better than their competitors, customers think this is just marketing crap”
The fear of losing hard-won knowledge to potential competitors is particularly acute for big, established companies. ‘They perceive a new and open standard as a risk to their market position. They tend to defend their existing market share, whereas small start-up companies try to get a position in a new market.’
Which is one reason why Erkamp thinks ‘open innovation’ is a misconceived term. ‘What we are talking about is collaborative innovation,’ he says. ‘Bringing different kinds of company together to solve problems that cannot be solved within one company or domain. Open innovation suggests results are accessible to everyone, which is not necessarily the case.’ He prefers the term ‘shared innovation’. ‘It’s about sharing information with trusted partners. That’s an important limitation of risk.’
Fine, but at the end of the day, what’s in it for them? The answer, says Erkamp, is the very thing that might initially hold them back – self-interest. ‘Smart streetlighting has existed for 20 years, but market penetration only ever reached one or two per cent. There were no savings for customers and companies did not get the turnover they were looking for. Why? Because the companies involved did not collaborate to ensure a solution that would be useful in the field, where most customers use products from different vendors. This led to a very low market acceptance, despite an important energy-saving potential for customers.’
Companies fixated on their own proprietary systems risk strangling a new market at birth”
Open innovation works best for emerging markets with potential, he says. Companies fixated on their own proprietary systems risk strangling a new market at birth because customers will not risk tying themselves to such products. But it’s not just a question of establishing open standards, modularity and interoperability. It’s also about concepts.
‘For example, what is healthy lighting?’ Erkamp says. ‘It’s about the influence of light beyond its visual performance. Research has demonstrated that blue lighting can “activate” people – but when companies claim without hard evidence that their method is better than what competitors are offering, the end result can be that customers think this is just marketing crap.’
He adds: ‘No single company can claim “we have human-centric lighting but no one else does”. It’s a new concept that requires further research. It’s about developing a common concept of how the benefits of healthy lighting can be realised in the market. No company or research institute can do it on their own, so open or shared innovation is important.’
In an encouraging indication of a new cooperative culture, ‘clusters’ have emerged in Europe (although not yet in the UK) bringing together key stakeholders such as electronics, communications and product design companies, hospitals and local government clients. They operate much like social networks, says Erkamp, with mutual trust as the glue holding everything together. Cluster members are working with Lighting for People on ‘business development experiments’ that it is hoped will lead to the joint creation of beneficial real-world applications.
Nothing solid has yet emerged from all this activity, but developments are ‘in the pipeline’, according to Erkamp. His own focus is on lighting as an ingredient in creating smart cities and buildings. ‘For example, a light point could act as a sensing platform for a smart city,’ he explains. ‘You could combine the lighting domain with another domain to run the city better. You could put sensors on streetlights to automatically sense noise in the city; the same measurement could also identify someone crying out for help when attacked.
‘This is ongoing and under development. But it’s only possible if lighting companies collaborate with companies looking at the sensors and the cloud platform, and all the competencies needed for that.’
LEDs have opened up a new world of possibilities, but will the old system of secrecy and in-house development predominate, or can the industry find the will – and the courage – to work together? Companies need to fight for their own profit, Erkamp says, but that doesn’t have to mean fighting against everyone else. ‘To develop a new market, sometimes collaboration with a competitor is needed – and then it’s a win-win.’