National survey of firms 2008
The increasing importance of design
UK firms are attaching increasing importance to design. The evidence for this comes, in part, from comparing the results of our latest survey to those from similar research conducted in 2005. For example, over the last three years the proportion of firms:
- who regarded design as integral to their operation has doubled to 30%
- making use of the various design disciplines has risen by 15 percentage points
- who had developed new products and services and reported design as leading or guiding the whole process had increased.
This comparative evidence is consistent with results from within the 2008 survey, which reports positive views of design across a range of measures. For example:
- 23% of businesses thought design had become a lot more important over the last three years in enabling the firm to achieve its business objectives.
- 30% said it was a little more important and only 5% considered it less important
- more than half (52%) of firms agreed or agreed strongly that design is integral to the country’s future economic performance – 16% disagreed or disagreed strongly
- 59% of firms agreed or agreed strongly that there was a clearly positive link between investment in design and profitability – 13% disagreed or disagreed strongly
- over the last twelve months 34% of firms had seen design expenditure grow moderately or rapidly whilst only 5% had seen it decrease.
Design in the downturn
Over half (54%) of firms believe design will help them stay competitive during the economic downturn.
However, design was not seen as a panacea – almost as many firms (44%) thought design had not been important in meeting the challenges they had faced in the last three years.
The role of design
Design plays an important role in developing new products and services – particularly among larger businesses.
Large firms were twice as likely (69%) to have developed new products and services than micro businesses (33%).
The most common use of design is still marketing (71%) and other external facing functions (62%), such as corporate branding and websites.
Design disciplines
Communication and multimedia design are the most common forms being used (61% and 55% respectively).
Design spending
For most firms (61%) design expenditure had stayed the same over the last 12 months.
Over a quarter of firms (27%) have seen their design spending grow over the same period.
Expectations for the coming year were virtually identical.
Commissioning design
Over a third of firms (39%) have commissioned designers in the past 12 months – the majority of those designers (88%) were from the UK.
Larger businesses were almost twice as likely as micro businesses to have commissioned designers in the past 12 months (61% compared to 32%) – though this still represents a substantial number of micro businesses.
95% of firms were very or quite satisfied with the design services they had commissioned over the last 12 months.
Selecting a design consultant was most commonly done through personal contacts with two-thirds (67%) of firms using this approach.
Differences by firm size, sector and location
Over a third (35%) of large firms say design is integral to their operation and almost a further half (47%) describe it as having a significant role.
The role of design within a businesses also varies between sectors: 46% of the sector covering manufacturing said design was integral to their business – almost double the proportion in the construction, transport and agriculture sector (24%).
Regional variations show a concentration of design use in the South East, with 48% of firms in London saying design is integral to operations.
Firms in the North East were least likely to see design as this significant (20%) and also had one of the highest proportions (23%) saying design had no role in their firm.
Design and sustainability
Consumer demand for sustainable products is not yet a major issue for most firms.
41% thought there was some demand for sustainability in their sector – 30% thought there was no demand at all.
The importance of design to UK businesses
Design clearly has an increasingly important role to play for UK businesses, and is valued – particularly among larger, rapidly growing and manufacturing businesses – for its perceived ability to boost profits and maintain competitiveness.
The details
What role does design play in UK businesses?
85% of rapidly growing businesses consider design to be integral or significant to their operations. Overall, 30% of businesses view design as integral – that’s twice as many as three years ago. Over half (56%) now consider design to be either integral or having a significant role to play within the business.
In addition, the proportion of firms that see no role for design in their business has halved to 13%.
Larger firms are still most likely to see design as important for commercial success: 82% said design was integral or had a significant role to play; but there is also considerable interest among the smallest businesses, with almost half (48%) seeing design in this way.
There are also variations between sectors and regions.
Companies in the manufacturing, mining and utilities sectors see design as having the greatest role to play, with 71% regarding design as either significant or integral to operations. By contrast, 19% of agriculture, construction and transport firms report that design has no role in their business.
Regional variations show that London firms are most likely to consider design as a business tool: nearly half (48%) said design was integral to their operation. However, 23% of businesses in the North East, and the same proportion in Wales, believe design has no role to play.
Do firms equate design with success?
Design is considered the sixth most important factor driving business success – higher than R&D and marketing. This ranking was the same in 2005. Quality of staff has overtaken financial management as the most important factor in business success, according to the firms surveyed.
Do firms link design and profitability?
Nearly two-thirds (59%) of UK businesses agree or strongly agree that there is clearly a positive link between investment in design and profitability.
The majority of rapidly growing businesses believe investing in design leads to profitability: 74% agreed there was a positive link between the two.
In fact, the response to this question was generally positive throughout the survey, regardless of business size, type or growth rate. 71% of companies in manufacturing; 63% in finance and business; 62% in wholesale, retail and hospitality; and 52% in farming, construction and transport recognised a link between design investment and profit.
Regionally there is greater variation, but even so, up to 71% of businesses (those in London and Northern Ireland) were in agreement; the lowest figure (from the North East) was 43%.
Is design becoming more important to UK businesses?
53% of UK companies report that design has become more important in helping them meet their business objectives – for 23% it has become a lot more so.
This view is even more strongly held by rapidly growing companies, 79% of which believe design has become more important to them over the past three years.
How important is design in the current economic climate?
80% of UK businesses believe that to some extent design will help them stay competitive in the current economic climate. This figure rises to 97% among rapidly growing companies.
Even among businesses whose turnover has remained the same in the past year, 77% believe design will have a part to play in helping to them compete in the current climate.
When looked at regionally, 85% of businesses in the South East believe design will have a positive impact on their ability to compete. Even the lowest figure, reported in the North East, shows that over half the businesses (59%) expect design to help them stay competitive to some extent.
How important is design for meeting specific business challenges?
16% percent of UK firms believe design has been crucially important in helping to meet their biggest business challenges of the past three years.
Despite design reportedly having a clear role in helping most UK businesses compete during the recession, comparatively few firms said design had been important in enabling them to meet their most pressing commercial challenges.
Is design considered integral to the UK economy?
52% of UK businesses believe design is integral to the country’s future economic performance.
The most positive response comes from the manufacturing sector, where 71% agree or strongly agree that design is integral.
And there is widespread agreement on this issue among firms of all sizes– over half the businesses from every category say that design is central to the UK’s future economic performance.
It should be noted, however, that once again the North East and Wales regions responded with the lowest figures to this question, with over a quarter in each case (26% and 29% respectively) not seeing design as having an important role to play in the UK economy.