Product design and manufacture is the easy part. Ensuring effectiveness of the product is the difficulty. Yep, you can easily light something up; however making that light communicate something to a motorist is a whole 'nuther thing all together. The problem with indicator lights on a bike is that, because of the narrow distance between lights, there is not really a reliably perceived reference. Even something like an animated LED arrow could be misinterpreted by a driver.

I recommend scouting your Library for a copy of the Handbook of Human Factors and Ergonomics. It has a great discussion on signalling devices.