Supply and demand

This section is about the numbers of designers and design businesses in the UK. It shows where design businesses are based, how long they have been trading, the disciplines they cover and who they employ

How much money does the design industry turn over every year?

The turnover of UK design businesses totalled £11.6 billion in 2004–05; 77% of design businesses have a turnover of less than £100,000 a year

Turnover for the three main types of design business:

• Design consultancies: £5.1billion
• Freelance designers: £2.0billion
• In-house design teams (budget): £5.5billion

So how much is the industry worth? Because design businesses often collaborate with one another, it’s not possible to just add these figures together to get a total value for the design industry. But by taking into account the extent to which businesses sub-contract and reducing the turnover and budget figures accordingly, we get an overall total of £11.6 billion.

Because there are so many small design consultancies and freelances working in the industry, just over half (51%) of design businesses have a turnover or budget of less than £50,000. However, for an estimated 1% of design businesses and in-house teams, turnover and budget stands at more than £2million per annum.

Was the past financial year better than the previous one?

43% of businesses report an increase in their turnover or budget compared to the previous year, while 19% report a decrease

We asked design businesses how their turnover compared to the previous year. Far more businesses (43%) report an increase in turnover or budget than report a decrease (19%). And among those who had seen turnover rise, nearly a third saw an increase between 20% and 29%.

Financial prospects are slightly less positive for freelances. Nearly a quarter (23%) report a fall in turnover.

Just over half (52%) of digital and multimedia businesses report an increase in turnover, along with 46% of product and industrial designers. Interior and exhibition designers (40%) were the most likely to report a reduction in income.

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How do designers structure their fees?

Only 3% of design consultancies receive royalties from intellectual property rights

Is the demand for design services increasing?

Designers are more likely to have seen an increase in demand for their services than to have suffered a decline

We asked design businesses whether, over the last three years, they thought that demand for their services had decreased, stayed the same or increased.

Responses are broadly positive: in all disciplines more designers have seen an increase in demand than have seen a decrease.

There is also evidence that when there is a decrease in demand it is freelances who feel it most. The predominance of increased over decreased demand is weakest for freelances in every discipline except digital and multimedia design.

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How optimistic are design businesses?

Just over half (54%) of design businesses think their turnover will rise in the coming year; 7% think it will decrease

We asked design businesses to predict the financial outlook for the coming year. They were broadly positive: most businesses think turnover or budget will rise.

Consultancies are the most positive, with 64% predicting a moderate or substantial increase in turnover; freelance designers are close behind with 55% predicting increases. In-house designers are more cautious, with 29% expecting a moderate or substantial increase in budget.

More than a third (38%) of respondents from in-house teams do not know how their budget will change in the next financial year.

Design businesses in Scotland and Northern Ireland are the most positive about increases in budget in the next financial year.

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What are design businesses’ long-term plans?

Over half of design business owners do not know what will happen to their businesses after they leave

The longer-term plans of individual design businesses, particularly regarding succession, are slightly more worrying. Over three quarters (77%) of the designers in consultancies that we spoke to were the owner of or a partner in their business, yet half of them do not have any plans for the continuation of the business when their involvement ends. Only 12% say that the business will carry on under the management of an existing colleague.

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How well does the design industry communicate the value of design?

Almost four in ten designers think their colleagues do not communicate design well

Designers identified the ability to communicate the value of design to business as a key challenge for the industry. Nearly six out of ten (59%) say it is done well but 38% think it isn’t