There is no doubt that the UK is in a period of economic and social change. We are transitioning from an economy powered by might and machine to one increasingly powered by services and technology. Productivity is stagnant. Business growth is unequal across the regions and automation is impacting on living conditions and job security. Against this backdrop Design Council’s Design Economy 2018 sets out the position of UK design and establishes a vision for its future.
Design is responsible for shaping the built environment, the digital world and the products and services we use. It’s design that creates better places, better products, better processes and better performance. Yet too few places, people and businesses benefit from the full potential of design.
Our flagship state of design report The Design Economy 2018 builds from our 2015 research, to measure the value of design to the UK economy, to understand how businesses are using it and what impact it is having on people working in design occupations and the places that access it across the UK.
In 2015 we calculated the economic value of design to the UK for the first time. Now in 2018, we have also sought to understand the wider impact that design businesses and design professionals are having on UK growth and innovation; whilst understanding more about the people that make up key sectors in design.
The research tells a compelling story of escalating growth, the rapid rise of digital design and deep-rooted connection to UK innovation. In 2016 the design economy generated £85.2billion in gross value added (GVA) for the UK. That’s about 7% of our annual GVA. This value continues to be bolstered by designers operating across the economy, in non-design firms, generating 68% of design GVA. Significantly, design GVA has grown 10% since 2014, outstripping the UK growth rate of 7% during the same period. Even more compelling is the speed of this growth compared to other sectors. Between 2010 and 2016 the design economy grew by 51%. Between these years, film, TV, video, radio and photography grew by 20%.
To try and understand the nature of the demand for design and design skills in the UK today we measured the growth of design firms and surveyed wider UK businesses on their use and plans for design in the future. The number of design firms has grown by 63% since 2010. Businesses on average grew just 3.7%. This huge growth has largely been fuelled by start-ups who have been increasingly successful. 60% of these types of firms survived more than three years, exceeding the UK average of 44% for small and medium enterprises. Clearly design is in demand with new and existing firms benefiting from this demand and a shift in the way economies work in the fourth industrial revolution.
But it’s not just design firms reaping the benefits from the growing importance of design. Designers operate in non-design businesses in large numbers and UK businesses are increasingly using design to innovate and drive improvement in productivity. UK tech, telecommunications, banking, aerospace and advanced manufacturing are investing significantly in design and design skills to improve their products and processes to drive the innovation and customer experience expected in the digital age.
1.69 million people now work in the design economy – an increase of 29% since 2010. This is about the same number that work in the hospitality sector, but it’s the pace of this growth that tells the story of design and its deep connection to the fourth industrial revolution. This is almost three times the rate of growth in employment for the UK economy as a whole over the same period.
The demand for design skills and knowledge is building and building at pace. The digital design subsector is the fastest growing part of the design economy and firms in this sector experienced an 85% growth in turnover between 2009 and 2016. Digital design is also the UK’s most valuable design exporter. Overall, we are still a global player in design exports, we are now sixth in the world behind France, Switzerland, USA, Hong Kong and Germany. However, this has slipped one place since our 2015 report and provides an amber warning.
As we head towards Brexit, design has a crucial role to play in helping the UK respond to long term economic shifts and challenges. But to do this we must address the challenges design faces.
Design has a diversity challenge, with women particularly being left behind. This is a stubborn trend, failing to shift since 2015 and men make up 78% of the design economy. And in some sectors, such as industrial and product design it is even more pronounced, at 95% male. When women do make it into design occupations they are not reaching management and leadership positions. This was a disappointing finding.
London and the south-east continue to benefit most from the design economy. Almost one in three design firms operate in London, facilitating wide access to the range of design sectors and jobs that combined contribute to innovation and growth. In contrast design activity outside the capital and its surrounding counties operate in clusters with cities like Manchester and pockets of the West Midlands benefiting from growth in high level design skills and firms. However, our analysis found design activity categorised by clusters with stark contrast between level of design activity in hub locations and those places and regions without these design clusters. This uneven distribution of design risks a growing divide between those businesses, places and people that have access to design and those that do not.
Internationally, other markets like China, South Korea and the UEA are investing significantly in innovation and design at a time when investments in UK design and design skills is slowing. Again, highlighting an emerging challenge to the UK design economy as other nations wake up to the importance of design.
Addressing the UK’s stagnant productivity, its regional imbalance and its response to global economic change requires new economic foundations. It requires access to skills and assets that drive innovation, accelerate growth and provide higher value, resilient jobs across the country.
The use of design in the UK economy is not only growing, it is helping firms to innovate, improve their productivity and grow. Yet this potential remains untapped in too many places and businesses in the UK. Whilst this is disappointing, it highlights huge potential for design to grow and power the UK economy as it has done previously, at key moments of industrial change in our history, helping UK firms, regions and people thrive. So as the country faces seismic economic challenges and change, it is time to once again turn to design.
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