Newly-published data shows design exports are rising, but not fast enough. Here’s why you – and George Osborne – should care.
As every economist knows, growing exports is central to improving prosperity. The government’s 2015 Productivity Plan set an ambitious target of growing exports to £1 trillion by 2020. This number isn’t quite as made-up as Dr Evil made it sound, but it is just about as unachievable if current trends don’t dramatically improve. To get there, we’re going to need a bit more creative thinking - and design could be the key.
Data from our newly published Design Economy research shows how much design the UK is currently exporting. The UK's total design economy exports rose from around £22bn in 2009 to around £34bn in 2013. As a benchmark, that’s slightly less than the total value of Ukraine’s exports, and slightly more than New Zealand’s.
Design-focussed companies grow faster ... and tend to compete on quality or brand rather than price. If this lot aren’t exporting, then it paints an even more negative view of UK exports than has previously been suggested.
So it’s big, and it’s growing, but not much more than the rest of the economy. Design exports amounted to 7.2% of the UK total in 2009. Five years later it was 7.3%. Crucially too, these figures are probably below what we should reasonably be expecting. The UK has the largest design sector in Europe, and possibly the world, but lags behind several countries - including Germany and Italy - on design exports. There’s definitely room to grow.
So why are these numbers interesting to non-designers (George Osborne included)? Well, three big reasons:
1. This isn’t 'design sector' data.
A sector that’s 7% of the economy is very important, but no more so than the other 93%. The design economy is our measure of all the areas of the economy where design is adding value.
Around £9.8bn of these figures comes from design industries, the rest is from the wider economy. These numbers cover everything from architects to aeroplanes (or a percentage of them, anyway). That means that the health of the design economy is a very good bellwether for the rest of the economy.
In fact, it’s even more than that. National export figures can be suppressed by any number of things, but often it comes down to basic price issues: fluctuations in currencies and commodities which we can’t do much about. But these figures are a bit different. Design-focussed companies grow faster, they’re more innovative, and tend to compete on quality or brand rather than price. If this lot aren’t exporting, then it paints an even more negative view of UK exports than has previously been suggested.
Looking at the sector data in the graphic, we see that digital design (representing everything from systems designers to Grand Theft Auto) makes up a big percentage of these figures, as well as a fair amount of the growth. This data would seem to validate the government’s decision in January 2015 to digitise UK Trade & Investment and to focus on "strong sectors". It’s clear from the relatively flat lines though that there’s still a long way to go.
2. Because exporting 'design' isn’t the same as exporting cars or computers.
Most exports are either goods (actual things) or services. The figures above are unique, in that they represent a mixture of both. Design, if you like, is both a noun and a verb.
This means that within that £34bn we’re talking about two quite different things, both important:
- Goods make up a lot of the value: around £23.6bn or 69% of the total. This represents designers creating British things, which people abroad want to buy. Growing this figure doesn’t just mean selling more stuff, it means selling more stuff that has stemmed from design’s creativity and innovation. This is most definitely a Good Thing.
- Services on the other hand represent £10.4bn (31%). This is designers, selling their services directly overseas (to make things for Britain to import, perhaps). This, arguably, is more important still, because of what it tells us about the strength of the UK’s skills, capacity and reputation for design. We know that using design helps grow businesses, whether exporting or otherwise. If skilled designers are readily available in the UK (and getting paid by overseas buyers) then there are likely to be beneficial knock-on effects across the economy. Design was the focus of UKTI’s 2015 Global Investment Conference for a reason - increasing design exports is a virtuous circle.
3. We should all care because design exports go beyond simply selling chairs to China (and way beyond selling guns to Africa).
Design is at its heart a problem-solving activity, which tries to make the world a more delightful and less frustrating place. In Britain we have some great chair designers, but we also have excellent service designers, social innovators, planners and architects who are redesigning products and places to solve the world’s problems. 2015 saw the export of the UK’s Government Digital Service (GDS) design to New Zealand, for example, making their government more transparent and accessible. If there’s global demand for this type of British design, that’s a good thing for everyone.
When you look at how these exports are distributed across the UK, a familiar and depressing pattern emerges. London is the big player, as usual. The South East also looks strong, but when adjusted for population, it’s pretty much on par with the South West and East of England. The big losers are Wales, the North East, and in last place, Northern Ireland - even taking its comparatively low population into account.
£34bn should be a number that we all want to see increased. More than anything, it points to the need for government to get smarter about export support. Trade deals are one thing, and there may indeed be a lot of businesses out there who would export more tomorrow if Chinese tariffs were lower. But to get to that stage we need companies who are designing things that people want to buy, and have the skills to sell them abroad. Design might just be the answer.
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