UK businesses reaping rewards of £27 billion spend on design

Design chief warns many companies are 'missing out' on business potential of design

12 February 2001

UK business is investing almost £27 billion a year in design, according to a major new survey commissioned by the Design Council. The research highlights the contribution which design makes to company profitability and competitiveness. But it also suggests some businesses are not making the most of its potential, prompting Design Council Chief Executive Andrew Summers to warn that many businesses are 'missing out' by failing to exploit the power of design as a business tool.

The new survey paints the clearest picture yet of the role of design in the UK economy. It indicates that almost three per cent of total corporate turnover (£ 26.7 billion) is being invested annually in design, either as an in-house resource or a bought-in service. That is significantly more than the two per cent business spent on research and development in 1999. The research reveals that one million people are now employed working part or full-time in design functions in the corporate sector.

The tangible benefits earned through design are also highlighted. Looking at the last three years, well over half of businesses (55%) said design had contributed to higher profits and turnover. Almost as many (46%) reported that design had helped them grow their market share. Nearly 58% of businesses surveyed said they'd used design as a strategic business tool that helped them stay competitive in the market place.

Design Council Chief Executive Andrew Summers said: 'This survey indicates, in hard cash terms, just how seriously many of the UK's businesses are investing in design and why. They have told us it is contributing to their bottom line and helping them to become more competitive.

'But the full potential value of design is only unlocked when it is placed at the heart of how a business thinks and plans its activities. It then becomes a powerful strategic tool. Our survey indicates that companies which have got this message profit most from design. Unfortunately, too many companies still employ design as a peripheral add-on to their business, to be used only in very specific circumstances. Inevitably, they're missing out and getting less from design.'

The new research shows that design is most important to companies in the manufacturing sector, where more than two out of three (70%), say it's integral to their operations and plays a significant role. Two out of three manufacturing companies (66%) report that design is contributing to higher profits. But manufacturing is not the biggest spending sector. Financial and business services companies invest almost £9 billion a year in design. However, less than half (46%) of these reported that design had helped increase profits.

A similar pattern emerges when the data is analysed in terms of company size. The smallest companies, employing fewer than 20 people, together spend more than £11 billion on design. But it is least likely to be integrated into businesses like these, and only one in three small firms says it contributes to profits. In contrast, although big business invests far less in design (£5 billion), three out of five big companies say it has increased profits. It's in businesses like these that design is playing the most significant role.

Andrew Summers commented: 'If companies want to maximise the return they get from investing in design, they need to integrate it into their operations and use it more strategically. Our research establishes that there is a huge demand from UK business for advice and help about how to do this. Much of our work at the Design Council is now being directed towards satisfying that demand. We aim to enable UK businesses to use design to drive innovation and create effective strategy as well as generate more direct financial benefits.'

Eighty-eight per cent of firms said they would benefit from advice on how design can help the innovation process, 47% said they would welcome help in appreciating design's role in restructuring and 42% said they would benefit from support in seeing how design can aid strategic planning.

Notes to Editors

1. The Design Council is the UK's national authority on design, working with partners in business, education and government to promote its effective use.

2. The survey results referred to in this release are based on in-depth interviews carried out among a representative sample of 700 chief executives or heads of design by Public Corporate Economic Consultants (PACEC).

3. A fuller version of the survey results is available as a PDF document.

4. For Media enquiries, contact Steve Annett on 020 7420 5239 (mobile 07976 557880), or Garfield Myrie on 020 7420 5273 (mobile 07957 558478).