This week, the National Endowment for the Arts released a report on the importance of industrial design to the United States’ economic health. While it covers everything from Apple’s influence to a crash course in UX design principles, the report ultimately drives home one main point: Industrial designers can be a serious financial boon.
“In today’s hyper-competitive, global marketplace, manufacturers need effective tools to survive and thrive, and design is one of those tools,” Jason Schupbach, the NEA’s director of design and creative placemaking programs, said in a release.
While design thinking as a foundation for strong businesses has been explored here on Co.Design in the past, the NEA’s report–entitled “Industrial Design: A Competitive Edge for U.S. Manufacturing Success in the Global Economy”—argues specifically that industrial design is needed now, more than ever, to catalyze growth in small and medium-sized American manufacturers.
To support its assertion that industrial design is indispensable to these manufacturers, the NEA interviewed more than 40 design experts and scholars (including leaders at top firms like Frog, Ideo, and Whipsaw), analyzed economic and performance data, and conducted literature reviews. Here are three major takeaways from its findings.
The Apple Effect
“With growing global competition, intense pressure for successful product launches, the rise of Apple and the internet of things, and greater demand by customers for a better user experience, industrial design has become more important for manufacturing firms than ever before,” the NEA’s report states, citing a statistic from Forbes that every dollar invested in user experience design brings in $100 in return.
Of course, large manufacturers have already embraced the value of design. For example, design conscious companies like Apple, Coca-Cola, IBM, Disney, Herman Miller, and Nike saw 219% greater returns than non-design-conscious companies between 2004 and 2014, according to a 2015 report from the Design Management Institute cited in the report.
Investing in design may have indirect impacts on a business, too. Companies that integrate industrial designers into their teams have a 9.1% higher employment growth rate than companies that don’t, according to a 2015 white paper from the Organization for Economic Co-operation and Development.
Why Small Manufacturers Don’t Invest In Design
Even so, small and medium-sized companies–which have less than 500 employees, and are important to the national economy because they create 56% of new manufacturing jobs and represent 98% of manufacturing firms in the United States–tend to invest less in design. The NEA gives multiple reasons for this, including a lack of awareness about industrial design’s potential, insufficient funding to support designers, and a lack of interest in senior leadership in investing in design.
Yet when they do, the returns are considerable: Small manufacturers saw a 17.5% increase in average sales on improved goods and services when they invested in design, the report notes. And according to a 2008 report from the British Columbia Premier’s Technology Council, 48% of projects with additional design investment recovered total costs within a year or less after the market launch, and 90% of projects achieved payback within three years.
Design Is Being Severely Underutilized
While these statistics are compelling, the NEA’s report includes three figures that really emphasize how industrial design isn’t being used to its full potential. “Thirteen percent [of manufacturers surveyed] were familiar with industrial design; 72% said a lack of knowledge about industrial designers’ value prevents their center from engaging with designers, and over 56% do not have access to industrial designers at all,” it concludes.
If the country is serious about bolstering manufacturing, generating jobs in that sector, and remaining competitive globally–and if the current administration cares to listen–design should be part of the equation. The NEA hopes its report will help achieve exactly that. Read the full PDF here.