Markets for Creativity: Design Services & Innovation

RESEARCH TEAM:
Professor Bruce Tether, Dr Lawrence Green & Dr Andrea Mina

SPONSORS:
Economic and Social Research Council (ESRC)
Advanced Institute of Management Research (AIM)

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This project concerns the role of design consultancies in innovation. Relative to R&D, design has received little attention from innovation scholars. Yet appreciation of the importance of design for UK firms has steadily increased in recent years and is now seen as key especially to low-technology businesses and SMEs, which account for most of the UK economy, as recently reflected in the Cox Review and the parallel study on Design and Creativity in Business Performance by the DTI. The UK design consulting industry is growing – and changing – fast. It comprises over 4,000 firms, with a gross income of £4 billion, including £0.5bn from overseas. Employment in the sector has more than doubled from the mid-1980s and both the technologies and the skills required in the competitive process have changed dramatically since then. Also it client base has expanded and transformed and is now highly diversified.

Piechart showing the Client Base of the UK Design Consultancy Firms

In this project, we combine the collection of broad interview materials from leading practitioners with analyses of specialised survey data from the British Design Council (2005). We aim to (a) investigate and explain the major shifts in the design landscape that have taken place over the past twenty years, and (b) examine the factors that are structuring activities and operating environments in the contemporary industry. More specifically, it will address the following questions:

What have been the drivers of change and continuity in the industry throughout the past two decades?
What are the now the bases and nature of competition in the sector?
What are the implications of new technologies for design firms (in terms of skills and training, communication and relationships with clients, the organisation and prosecution of design work, internationalisation of markets etc.)?
What shifts in ‘demand’ have been witnessed – is there change in the nature and form of demand for design services?

A number of additional questions are also relevant and unavoidable. For example, the growth of outsourcing and the increasingly distributed nature of innovation processes is an essential part of the debate on the growing role of ‘knowledge intensive business service firms’ (KIBS) in ‘systems of innovation’ (notably, around 20% of R&D in the UK is now outsourced to specialised R&D enterprises, a proportion which has grown rapidly in recent years). Moreover, design is a pervasive component of a great variety of innovation processes in manufacturing and service sectors. It embraces a set of activities that are essential in shaping not only the aesthetics but also the functionality of goods and services and that are increasingly pointed at as a key source of competitive advantage in global markets at the highest levels of policy. Finally, a focus on design services offers us the opportunity to investigate at a finer level of resolution a growing niche of the Knowledge Economy and to explore an important and relatively under-researched service sector of the UK economy.

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