The Impact of Design on Business

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The impact of design on business
Design Council briefing
October 2008
To survive in challenging economic conditions
and stay ahead of overseas competition,
UK businesses must add value – designing
innovative products and services instead
of cutting prices.
However, design is increasingly being used
beyond this traditional remit as a strategic tool
which enhances performance and unlocks
innovation. Research has begun to examine
this interdisciplinary role of design, and future
work must aim to understand its full impact
on business performance.

Design Council Research Team
34 Bow Street
London WC2E 7DL
research@designcouncil.org.uk
www.designcouncil.org.uk

DC Briefing_Doc_No.1_v5.indd 3

01/04/2010 14:38

Design Council briefing 01 The impact of design on business

The contribution of design to
innovation has been widely recognised

Investing in design allows businesses to compete
in numerous ways:

Design is the process that links creativity and innovation
Design has been defined as the process that links creativity and innovation.1 It does this by shaping ideas to become
practical and attractive propositions for users or customers. Innovation – the successful exploitation of ideas – requires the use of design to develop new products, services or processes. This interdependency is why design is now increasingly seen as a vital part of innovation along with business and technological expertise.2 The contribution of design to innovation processes has been found in several important studies.3

– Creating new products and services
Design enables the creation of innovative products
and services, allowing companies to open new income
streams and compete overseas.10 According to
PricewaterhouseCoopers, top innovators generate
over 75 per cent of revenue from products not in
existence five years ago.11

The design industry is a source of innovation
for UK businesses
Creative sectors such as design are a significant factor
in innovation and growth throughout the UK economy.4
Where businesses exploit the skills of UK designers, significant performance benefits have been demonstrated – for example, manufacturers who invest in design see significant outcomes
as a result, including improved quality of goods and services, and increased market share.5
This reflects recent research by NESTA suggesting the creative industries may play a greater role in the UK’s innovation system than has previously been recognised by policymakers.
For instance, firms that spend double the average amount on
creative inputs – including design – are 25 per cent more likely to introduce product innovations.6 Further research found that designers are increasingly being asked by clients for intelligence on future market trends. As a result ‘front-end research’ (e.g. materials development, market evolution), which helps to

inform innovation processes and activities, is becoming
seen as a staple activity for designers.7

Design is a significant source
of competitive advantage
– Adding value through innovation
Rapidly growing businesses are twice as likely as others to
compete on the basis of innovation.12 Design can enhance the outcomes of numerous innovation activities, bringing benefits such as increased quality of goods and services, improved
production flexibility and reduced materials costs.13
– Stimulating exports
51 per cent of Queen’s Award for Export Achievement winners in 2002 directly attributed overseas sales success to their
investment in design. Over 90 per cent found that design
was valued by their international customers and 86 per cent
indicated that design helps them to compete internationally.14 – Attracting investment and identifying markets
The Design Council’s business support programme,
Designing Demand, has helped technology companies
to attract investment by using design to shape strategy
based on customer needs and market opportunity:

Good design is a...
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