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Design: an ingredient to growth National Survey of Firms 2002 The last three years have

Design: an ingredient to growth

National Survey of Firms 2002

The last three years have seen difficult times in the economy, with growing competition from overseas and a strong pound making life difficult at home and abroad. Yet despite this, there are companies who have been able to grow. The annual National Survey of Firms conducted by the Design Council has for the first time shown the link between growth and use of design.

The majority of companies in the UK are small and medium enterprises and for them the importance of design has closely matched the economy's fluctuations. The number saying it is integral to their business or has a significant role to play has fallen over the last three years and this has dragged the overall opinion of companies in the UK to an all time low. Only 24% of companies in the UK say that design is integral/significant to their business. The chart below maps the survey alongside the FTSE100 index over the past three years.

Design has an integral/significant role to play in UK firms Source: PACEC 34% 46% 38%

Design has an integral/significant role to play in UK firms

Design has an integral/significant role to play in UK firms Source: PACEC 34% 46% 38%

Source: PACEC

Design has an integral/significant role to play in UK firms Source: PACEC 34% 46% 38%
Design has an integral/significant role to play in UK firms Source: PACEC 34% 46% 38%

34%

46%

38%

Source: National Survey of Firms 2002

But the overall figure for UK companies as a whole hides the real value design is giving to some companies.

Companies that have seen rapid growth in the last 12 months rate design, innovation and creativity higher as a key ingredient of business success than those companies who have seen moderate to no growth. Seventy-one per cent of them also say design is integral/significant to their business compared to the national figure of just 34%.

Rapidly growing companies are also deriving more benefits from design activity than their less successful counterparts. The following table shows the extent to which design, innovation and creativity have contributed to various aspects of business in the last three years.

Design, innovation and creativity have contributed to a great/fair extent in the last 3 years to the following.

 

UK Firms in general

Static

Rapidly

companies

growing

 

companies

Increased employment

13%

9%

38%

Increased turnover

15%

10%

38%

Increased profit

16%

9%

33%

Reduced costs

10%

8%

29%

Improved quality of products/services

20%

5%

56%

Development of new markets

17%

3%

38%

Increased market share

15%

4%

39%

Improved internal comms

9%

7%

14%

Improved comms with customers

24%

10%

50%

Improved image of organisation

22%

5%

51%

Competitiveness

18%

10%

33%

Productivity

18%

8%

48%

New products/services

19%

8%

52%

Source: National Survey of Firms 2002

The results also show that a larger number of firms that have grown rapidly in the last 12 months (83%) have introduced a new product/service in the last three years. The figure for static companies is only 27%. This may help explain some of the differences seen above.

Design activity in UK firms

 

UK Firms in general

Static

Rapidly

companies

growing

 

companies

Dedicated design

16%

4%

30%

department

Employ internal designer(s) but no department

5%

2%

13%

Employ external design consultant(s) on ad-hoc basis

16%

19%

30%

Other approaches

13%

8%

18%

No design activity

51%

67%

9%

Source: National Survey of Firms 2002

Expenditure on design is also closely linked to growth, with rapid growers showing the largest increase in design expenditure in the last 12 months. Fifty-five per cent say spending has increased, compared to only 4% of static companies and 20% overall.

This may reflect rapid growing companies' strategy, which is based on anticipating changes in their market as opposed to reacting, which the majority of static companies admit to.

The approach to winning new customers is also more aggressive, with the majority of rapid growers basing their strategy on competitive pricing and better products and services as opposed to one or the other.

Research on markets, competitors and customers is also undertaken more by rapid growers than it is by static companies or the national norm.

Research undertaken by UK firms

 

UK Firms in general

Static

Rapidly

companies

growing

 

companies

On markets

33%

18%

74%

On customers

36%

20%

76%

On competitors

29%

16%

63%

Source: National Survey of Firms 2002