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22 ECONOMY AND DESIGN, 2006 | Editorial

ECONOMY AND DESIGN






As noted by Robin Roy1 in Can the benefits of Good Design be quantified? (1994), many managers need to be convinced by quantitative data of the benefits of focusing more on design as a strategic element and of improving management guidelines before deciding to invest effectively in design.

Until very recently, there was no quantitative information on the direct or indirect impact of design on company results and on the economy. In fact, the only quantitative information available was that obtained by studies on success or failure in processes of innovation and product development2.

On the other hand, there is some information from the economic research carried out to date, where design is occasionally presented as a factor, among many others, that influences company competitiveness. It is therefore no surprise that, today, design and its management still does not have the recognition enjoyed by other areas involved in business development, such as marketing, communication, R&D or production.

In spite of this traditional lack of quantitative data to explain the economic impact of design on companies, there have been a few researchers who, since the 80s and throughout the 90s, have undertaken research projects aimed at improving our knowledge of how design behaves and its impact on economic development.

In this area and this period, we should note the effort and dedication of certain people or teams that have studied and analysed the area of the economic impact of design on companies and the economy and that have circulated their findings. In this respect, we should mention the work carried out by the Design Innovation Group, V. Walsh, J.H. Hertenstein and M.B. Pratt, the Groupe Bernard Julhiet. G. Gemser. F.A, Roerdinkholder, J. Montana and I. Moll, the Centre for Economic Forecasting, the Design Council, Brigitte Borja de Mozotta, etc., to whom we may also add other authors who have researched areas3 complementary to the economic impact of design.

These works allow us to detect certain behavioural patterns but do not provide absolute findings. We may conclude that these projects did not manage to get enough financial support to continue to progress and achieve new levels of knowledge.

In the last few years, with the impact globalisation and the consequent transformation of the production system have started to have on the economy, interest has revived for areas that can provide alternatives for the new scenarios that must be dealt with. Within this context design, together with innovation and creativity, have become points of reference in order to progress. The first indication of this new situation is provided by the interest shown by public administrations and the business sector of various European countries in encouraging the study and research of the behaviour of the area of design.

The works presented in this TdeD are an example of what some European countries and also Catalonia are doing to measure design's contribution to the their economies as a whole or particular sections. It can be observed that, in spite of the commendable efforts represented by the studies we have published and their unquestionable usefulness, they are no more than a first step towards the public recognition of the role played by design in the various areas of society today. In all, this first attempt must stimulate us to make every effort necessary to demonstrate the importance of placing design among the decisive elements of a productive economy.

These works also provide quantitative data, conceptual thoughts, suggestions and methodologies that help us discover the economic role played by design and, at the same time, demonstrate that:

—There are problems concerning the definition of design: the dichotomy continues between design understood from a perspective related to aesthetics and design understood from a perspective related to innovation. Furthermore, there are still no defined limits of design within the context of the production process.

—The use of design from a strictly aesthetic point of view is no longer a comparative advantage for companies because it is a widely used strategy. On the other hand, the use of design from the point of view of innovation opens up a new area of differentiation for company products, even increasing sales and improving results.

—There is no established methodology to facilitate the economic evaluation of design. Indicators have not been configured to determine the specific economic impacts of design on companies and the economy and there is a lack of databases to enable the quantification and evolution of design.

—It is not clear if the quantified impact of design on the competitiveness of companies is a result of its influence per se or if there are other elements affecting the results.

The articles contained in this TdeD represent the paths currently being followed in European countries in the area of "Design and Economy". At the same time, an indirect view has been included of the influence of design on certain economic sectors in Catalonia. These articles therefore provide us with an idea of the scope of the use and the economic significance of design.

Anders Krezschmar has directed the study organised by the Danish Design Centre in collaboration with Advice Analyse, I&A Research, Anders Holm and Bella Markmann, from the University of Copenhagen, have taken part in this study and it aims to initiate the creation of a database on the economic effects of design, while taking the Danish economy as its reference point.

The work is based on the hypothesis that there is no study presenting a complete view of the economic parameters related to design and, consequently, it aims to establish a methodological platform to further this.

The study, which analyses the economic effects of applying design, is based on 1017 tetephone interviews with private Danish companies of a minimum of 10 workers, and aims to examine:

—Total investment in design.

—The performance of gross income, the trends in hiring and the increase in exports related to the turnover of Danish companies with at least 10 workers.

—The differences in the areas of gross income, employment and exports between companies adopting a comprehensive approach towards design and those that do not apply design in any way.

The conclusions of this work indicate a very clear correlation between the use of design and economic success obtained by the firms, in turn benefiting the whole of society. This is such an evident correlation that it cannot be ignored nor doubted The correlation is particularly notable in those companies adopting a comprehensive approach with respect to design.

Premsela offers us the findings from the study on The role of design in the economy of the Netherlands, showing that:

—The growing impact of design on the economy is due to the behaviour of society, which increasingly values lifestyle, ease of use and the experience of product quality, as well as the fact that this discipline greatly helps to develop new services and up-to-date goods.

—Design is a profession that requires the intensive use of highly qualified workers. In this respect.
its contribution to the intensive labour market in terms of knowledge is highly valuable. This professional level of employment is closely related to the current western creative economy, difficult to transfer to other regions.

— Companies that apply innovations in design such as non-technological innovations experience larger increases in their market share than companies that do not apply them.

— In regions where design has traditionally been predominant, the specialised areas of design usually grow to a higher level than the corresponding local demand, the availability of teaching institutions and training centres and the real implementation of the profession in the region. This means that the tendency to satisfy the needs of national and international markets has replaced the dependence that could have existed previously in the local market. Therefore, the success of design with respect to these regions depends on finding clients and on exploiting markets outside the region, preferably abroad.

Design directly and considerably influences the process of innovation and can strengthen the competitiveness of a country outside its borders, helping to develop the international market, guaranteeing many employment opportunities for highly qualified workers and generating an increase in the added value of products.

David Kester has directed a research programme promoted by the Design Council in order to analyse the effects of design investment on the evolution of companies in the United Kingdom that are listed on the stock market. It is well known that the United Kingdoms design capacity places it at the forefront of the global experience. But, so that design is applied to companies, confidence must be increased
in terms of its potential and precision in the measuring of its contributions. Companies must justify their investment made in all commercial activities and specific repercussions on productivity and profitability must be measured.

This study also aims to establish objective global mechanisms to identify those companies that are active and effective design users, as well as comparing their overall results with other companies listed on the stock market, thereby extending our understanding of investment and the value of company capitalisation.

The study's conclusions state that companies that apply design effectively do better than the rest. There is therefore a direct relation between the effective application of design on the part of companies and an increase in performance in the share price and, consequently, in the increase of profits for shareholders.

Jordi Berrio introduces us to the experience of Ireland, a small country which, over the last few years with its joining the European Union and the aid it has received, has seen a veritable revolution in its production structure. Industry and services have become the main components of this country's gross domestic product and its primary sector, as in all developed countries, has gone to 3rd position both in terms of employed workforce and wealth created.

Within this context, and basically focusing on industrial design, the article outlines a model of possible policies to promote design, in which its importance in developing production is repeatedly demonstrated. The article also highlights the little interest and even mistrust which, to date, has been shown by Irish companies to design and the professionals working in this area. This fact is explained by the low turnover achieved by companies in this country.

This article therefore shows us how a country that is starting its industrial adventure very late in the day in
comparison with most of the countries in the European Union can arrive, per se, at the same conclusions with respect to design as the countries that started their industrialisation much earlier.

Design in Finnish companies covers the findings from the study designed and carried out in 2002 by Designium (New Centre of Innovation in Design of the Helsinki University of Art and Design) and run by Professors Sampsa Piira and Juha Jarvinen, as commissioned by the National Technology Agency of Finland. The aims of the study are to provide a view of the current status of design in Finnish industry, exhaustively gathering quantitative data on the design sector of this country and on how industry applies design, creating questionnaires that help to monitor and extend studies concerning the development of the design sector

The article strives to overcome the view of design as a simple aesthetic finish applied at the end of the manufacturing process, fully integrating design in the production and distribution process. This work, which uses opinion surveys as its basic methodology for obtaining information (quantitative data on the design services offered by design companies, on their operations or the repercussions on their clients' activities have never been gathered), is the first in-depth study carried out in Finland in this respect. The article highlights the influence of the business dimension and economic sectors (metal, textile and food) as a variable directly linked to the consumption of design and strives to overcome the view of design as a simple aesthetic finish applied at the end of the manufacturing process, fully integrating design in the production and distribution process. Professor Josep Tresserras speaks about industrial design as a key factor for innovation and competitiveness of Spanish and particularly Catalan firms, highlighting its strategic importance and suggesting that society at large should attain a more committed and consolidated knowledge and culture of product design and innovation.

These are key aspects at a time when the industrial fabric is facing the challenges of globalisation.

Tresserras also includes an analysis of the study Market Success and Design, promoted by CIDEM, which observes and evaluates the presence of design and innovation as relevant factors for company results based on a series of companies with success in the Catalan business world.

In an imaginative way, Xavier Ferras introduces us to design via packaging, a transversal sector with a highly significant weight in present-day economies and in which design has a key presence. The author places packaging and, consequently, design within the context of the Catalan economy.

This article shows how, in our macro-economic environment, industry trends are heading towards an increasingly greater concentration of perceived value by the market at the ends of the production chain. In other words, the actions at the beginning and end (research, development, design,
personalisation, logistics and marketing) will accumulate more value (generally greater margins) and design will therefore extend its role in this process.

On the other hand, the author also notes that, in an environment that tends towards an excessive supply of goods, companies will increasingly opt for differentiation strategies for their products based on quality, functionality, brand value and technical and/or aesthetic characteristics.

Finally, it should also be mentioned that the recent contributions, of which this issue of TdeD reflects the main conclusions, deduce that design related to the process of innovation is a highly important strategic instrument in encouraging the competitiveness of firms and affecting the behaviour of economic sectors. It is also concluded that the design sector, in spite of it having begun to transmit its personality and value, is still in an initial phase of development as an economic sector in most countries. But to promote this we need greater commitment from public administrations and business organisations.



Aleix Carrió Millá




1 Robin Roy is Senior Lecturer in Design at the Faculty of Technology of the Open University (United Kingdom). In 1979 he founded the Design Innovation Group.
2 See Christopher Lorenz. The Design Dimension (Oxford and New York: Basil Blackwelt, 1986); James Pilditch, Winning Ways (London: Harper and Row, 1987).
3 Kotler & Rath, Design: a powerful but neglected strategic tool. EUA. 1984; Hart & Service, The effects of managerial attitudes to Design a company performance. GB, 1988; Hart & Service. Design orientation and market success; GB. 1988, Svengren, Industrial Design as a Strategic Resource, Sweden, 1995; Arbonies, Product Design and the rote of external Design consultants. Spain, 1996.




Contents



22 ECONOMY AND DESIGN, 2006

JOSEP TRESSERRAS I PICAS
Industrial design as a factor for innovation and competitiveness


This article aims to convey the strategic importance of industrial design in aspects related to competitiveness and company success within the context of the industrial fabric. It also studies the Spanish manufacturing industry, with particular emphasis on Catalan industry, related to the application of design factors. The text also comments on the two most significant factors of the study promoted by CIDEM: market success and design.

[...]


22 ECONOMY AND DESIGN, 2006

SAMPSA PIIRA, JUHA JÄRVINEN
Survey of industrial design in Finland


Designium, the New Centre of Innovation in Design, is built on close cooperation between the University of Art and Design Helsinki, University of Lapland, Helsinki University of Technology and the Helsinki School of Economics and Business Administration, as well as other universities, polytechnics, businesses and public bodies. The mission of Designium is to promote the development of national design policy, the internationalisation of the sector, and enhance the competitiveness of Finnish industry through multi-disciplinary research and innovation. Tekes, the National Technology Agency provides funding and expert services for the development of internationally competitive products and production techniques. The agency annually spends over 390 million euros in grants and loans to technology development projects. Technology programmes create new technological expertise in Finland in cooperation with businesses, research institutions and universities. The purpose of the programmes is to raise the technological competitiveness of Finnish industry in the key industrial sectors of the future. Currently, the agency has about 50 ongoing technology programmes.

[...]


22 ECONOMY AND DESIGN, 2006

XAVIER FERRÁS
The packaging sector in Catalonia


In this report Xavier Ferras introduces us in an imaginative way to the world of design as manifest through the container and packaging, a transversal sector which is now important in the economy today, and in which design is a key presence. The author places packaging, and, consequently, design, in the context of the Catalan economy today. This article shows how at a macroeconomic level the industrial tendencies are increasingly moving towards a concentration of perceived value at the extremes of the chain of production. This means that as time goes by the interventions effected at the beginning and end of the chain (research, development, design, personalization, logistics and marketing) add in more value (generally through greater margins) and that therefore design is taking on a greater role in the process. Another matter the author remarks on is that within a context in which there is a tendency towards the excess supply of goods, companies are increasingly basing their operational strategies on differentiating their products in terms of quality, functionality, brand value and their technical and/or aesthetic characteristics.

[...]


22 ECONOMY AND DESIGN, 2006

JORDI BERRIO
Design and Irish manufacturing industry


Jordi Berrio introduces us to the experience of Ireland, a small country which, over the last few years with its joining the European Union and the aid it has received, has seen a veritable revolution in its production structure. Industry and services have become the main components of this country's gross domestic product and its primary sector, as in all developed countries, has gone to 3rd position both in terms of employed workforce and wealth created. Within this context, and basically focusing on industrial design, the article outlines a model of possible policies to promote design, in which its importance in developing production is repeatedly demonstrated. The article also highlights the little interest and even mistrust which, to date, has been shown by Irish companies to design and the professionals working in this area. This fact is explained by the low turnover achieved by companies in this country. This article therefore shows us how a country that is starting its industrial adventure very late in the day in comparison with most of the countries in the European Union can arrive, per se, at the same conclusions with respect to design as the countries that started their industrialisation much earlier.

[...]


22 ECONOMY AND DESIGN, 2006

DAVID KESTER
The impact of design on stock market performance


David Kester has directed a research programme promoted by the Design Council in order to analyse the effects of investment in design on the evolution of companies in the United Kingdom that are listed on the stock market. It is well known that the United Kingdom's design capacity places it at the forefront of the global experience. But, so that design is applied to companies, confidence must be increased in terms of its potential and precision in the measuring of its contributions. Companies must justify investment made in all their commercial activities and specific repercussions on productivity and profitability must be measured. This study also aims to establish objective global mechanisms to identify those companies that are active and effective design users, as well as compare their overall results with other companies listed on the stock market, thereby extending our understanding of investment and the value of company capitalisation. The study's conclusions state that companies that apply design effectively do better than the rest. There is therefore a direct relation between the effective application of design on the part of companies and an increase in performance in the share price and, consequently, in the increase of profits for shareholders.

[...]


22 ECONOMY AND DESIGN, 2006

DUTCH DESIGN FOUNDATION PREMSELA
Design in the economy of the Netherlands


This work summarises the findings of the study carried out by TNO Strategie, Technologie en Beleid (2004), commissioned by the Dutch design foundation Premsela and the Ministry of Education, Culture and Science in the Netherlands. The work aims to evaluate the role of design in the economy of the Netherlands. Premsela offers us the results achieved with the study on the role of design in the economy of the Netherlands, showing that: a) The growing impact of design on the economy is due to the behaviour of society, which increasingly values lifestyle, ease of use and the experience of product quality, as well as the fact that this discipline greatly helps to develop new services and up-to-date goods. b) Design is a profession that requires the intensive use of highly qualified workers. In this respect, its contribution to the intensive labour market in terms of knowledge is highly valuable. This professional level of employment is closely related to the current western creative economy, difficult to transfer to other regions. c) Companies than apply innovations in design such as non-technological innovations experience larger increases in their market share than companies that do not apply them. d) In regions where design has traditionally been predominant, the specialised areas of design usually grow to a higher level that the corresponding local demand, the availability of teaching institutions and training centres, and the real implementation of the profession in the region. This means that the tendency to satisfy the needs of national and international markets has replaced the dependence that could have existed previously in the local market. Therefore, the success of design with respect to these regions depends on finding clients and on exploiting markets outside the region, preferably abroad. Design directly and considerably influences the process of innovation and can strengthen the competitiveness of a country outside its borders, helping to develop the international market, guaranteeing many employment opportunities for highly qualified workers and generating an increase in the added value of products.

[...]


22 ECONOMY AND DESIGN, 2006

ANDERS KRETZSCHMAR
The economic effects of design


Summary of the study organised by the Danish Design Centre in collaboration with Advice Analyse, I&A Research (information gathering) and with the participation of Anders Holm and Bella Markmann from the University of Copenhagen (methodology and IT), directed by Professor Anders Krezschmar. The aim of the study is to initiate the creation of a database on the economic effects of design, while taking the Danish economy as its reference point. The work is based on the hypothesis that there is no study presenting a complete view of the economic parameters related to design and, consequently, it aims to establish a methodological platform to further this. The study, which analyses the economic effects of applying design, is based on 1017 telephone interviews with private Danish companies of a minimum of 10 workers, and aims to examine: a) Total investment in design, b) The performance of gross income, the trends in hiring and the increase in exports related to the turnover of Danish companies with at least 10 workers, c) The differences in the areas of gross income, employment and exports between companies adopting a comprehensive approach towards design and those that do not apply design in any way. The conclusions of the work indicate a very clear correlation between the use of design and economic success obtained by the firms, in turn benefiting the whole of society. This is such an evident correlation that it cannot be ignored nor doubted. The correlation is particularly notable in those companies adopting a comprehensive approach with respect to design.

[...]