The economical impact of design on

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The economical impact of design on companies in
Flanders
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The 2003 study
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The 2003 study
In 2003 we studied the impact of implementing
design on business performance. Design was
defined as
a holistic dealing with matters, that besides
the styling and restyling of products, extends to
the application of innovative and alternative
materials, ergonomics, engineering, ecology and
ethics, psychology, culture and last but not
least management. (Definition of design
according to Flemish Ministry of Economy)
For this study, 400 managers of Flemish
manufacturing companies were interviewed about
the way they run their business. Business
performance and the evolution in business
performance (1999-2001) was analysed in function
of the extent to which the companies implement
design activities.
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The 2007 study
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The 2007 study
In the 2007 study, a new random sample of 500
managers was interviewed about their design
implementation, their attitude towards design and
its impact on business performance. Amongst them
were 400 managers of manufacturing companies and
100 managers of businesses in the service
sector. Business performance and the evolution
in business performance (2001-2005) was analysed
in function of the extent to which the companies
implement design activities. The latter analysis
was also performed on the 2003 sample. To that
end the 2003 sample was enriched with business
performance indicators for 2005.
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Survey 2007 Questionnaire Business Performance
Indicators
Survey 2003 Questionnaire Business Performance
Indicators
amongst 400 manufacturing companies with at least
5 employees
amongst 400 manufacturing companies and 100
service companies with at least 5 employees
Comparison Manufacturing companies
Comparison Manufacturing vs. Service companies
Evolution in function of design implementation
Evolution in function of design implementation
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Indicators of business performance
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Indicators of business performance

• Business performance parameters included in the
  analysis
• Turnover
• Number of employees
• Profitability
• Solvency
• Liquidity

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Indicators of business performance
To what relative extent is the company making
profit
Profitability
To what extent can the company survive when
business is bad
Solvency
To what extent is the company able to fulfil
short-term financial obligations
Liquidity
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Indicators of business performance
Rentabiliteit
Solvabiliteit
Liquiditeit
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Measurement of design application
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Measurement of design application

• Implementation of design was measured in
  different ways
• By means of a straightforward question
  (European standard Danish Design Ladder)
• Please indicate which situation you think is
  most typical for your company
• No application of design
• Occasional application of design
• Only used in the stage of product finishing
• Integrated in the production process
• Applied strategically
• By means of 28 design indicators (as in 2003)

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Measurement of design application
Regular rethinking of the production process
Regular update of the technology used in products
Focus on long lasting use of materials
Continuous search for new materials
Regular updates of the shape of products
Regular updates of product models
Research into user friendliness of products
Development of more ecological products
Rethinking of product functionalities
Design used as tool for making a difference (USP)
Product development in partnership
In house designer
28 design indicators
Visits to design fairs / consulting design
magazines
Regular updates of packaging
Regular rethinking of packaging
Explicit dress code exceeding safety requirements
Regular rethinking of the work place interior
House style developed by an external specialist
Receive media attention for innovative products
Packaging is designed by an external specialist
The production hall is dressed
Office furniture is designed by an external
specialist
Service design department
Research into customer needs and expectations
Development of procedures to improve our services
Patent application
Registration of brand names
Registration of models
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Half of the Flemish companies indicate to apply
design
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Already 12 of the Flemish companies indicate to
apply design strategically
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Implementation of design
Degree in which design is used in the company.
n400
n100
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Implementation of design
Average turnover (in million ) in function of
the degree of design implementation
Manufacturing companies
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Implementation of design
Average number of employees in function of the
degree of design implementation
Manufacturing companies
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Survey 2003 Questionnaire Business Performance
Indicators
amongst 400 manufacturing companies with at least
5 employees
Evolution in function of design implementation
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There is a positive relationship between design
implementation and company size. This shows both
in turnover and the number of employees
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Implementation of design
Average turnover (in million ) in function of
the degree of design implementation
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Implementation of design
Average number of employees in function of the
degree of design implementation
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There is a positive relationship between design
implementation and the profitability of the
company
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Implementation of design
Profitability Profitability is higher for
implementers of design than for those who
implement design rarely. In the Design group,
profitability was lower in 2001 than in 1999. No
such drop in profitability was observed in de
non-Design group. In 2003 it was concluded that
the Design group suffered more from the 9/11
crisis. In 2005, 4 years after 9/11
profitability is lower for all companies. The
profile is however similar to that in 1999, with
companies that implement design being more
profitable than the other companies.
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Implementation of design
Profitability
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Implementation of design High vs. Low
Profitability increase or decrease from 2001?
2005
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There is no relationship found between design
implementation and the solvability and liquidity
of the company
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Survey 2007 Questionnaire Business Performance
Indicators
Survey 2003 Questionnaire Business Performance
Indicators
amongst 400 manufacturing companies with at least
5 employees
amongst 400 manufacturing companies and 100
service companies with at least 5 employees
Comparison Manufacturing companies
Comparison Manufacturing vs. Service companies
Evolution in function of design implementation
Evolution in function of design implementation
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Although half of the companies indicate not to
implement design, all of them do indicate to
apply activities that can be considered as design
activities
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(No Transcript)
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• 212 manufacturing companies and 53 service
  companies indicate NOT to apply design in their
  business.
• However, when questioned about specific design
  activities, all of them do seem to apply design
  activities. Among the manufacturing companies
  that dont apply design
• 78 develop procedures to improve services
• 65 focus on long lasting use of materials
• 59 continuously search for new materials
• 42 regularly update the shape of products
• 34 regularly update product models
• 27 have their house style developed by an
  external specialist
• 17 use an in-house designer

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Implementation of design Based upon The Danish
Design Ladder

• Design is not implemented (n212)
• Design is implemented for styling (n58)
• Occasionally (n24)
• For product finishing (n34)
• Design is implemented systematically or
  strategically (n129)
• Integrated in business processes (n81)
• Strategically (n48)

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Implementation of design
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Implementation of design Based upon 28 indicators
25 companies with overall the highest degree of
implementation (n101) Vs. 25 companies with
overall the lowest degree of implementation
(n97)
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Implementation of design
Average turnover (in million ) in function of
the degree of design implementation
Manufacturing companies
36
Implementation of design
Average number of employees in function of the
degree of design implementation
Manufacturing companies
37
Design was mentioned as a key success factor for
business performance
38
Design was, however, the least important of all
factors presented
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Implementation of design
To which extent are the different aspects of
doing business determining for the success of
the company?
n400
n100
Scores were given from 1 up to 7.
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• Better business performance is especially
  prominent (turnover, profitability, solvency,
  liquidity) in companies that implementeddesign
  for
• Multimedia applications
• Communications Brand
• Interior Exhibition design
• Service design

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Implementation of design
Purposes of design. Which sub-aspects of design
were used in the past 3 years? Percentages based
on companies that implement design 47 in the
manufacturing sector 47 in the service sector
n188
n47
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Multimedia applications

• Design is used (n97)
• Design is not used (n303)

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Design used for multimedia applications
Average turnover (in million ) in function of
use of design
Manufacturing companies
44
Design used for multimedia applications
Number of companies with increased/decreased
turnover
45
Design used for multimedia applications
Average number of employees in function of use of
design
Manufacturing companies
46
Design used for multimedia applications
Number of companies with increased/decreased of
employees
47
Design used for multimedia applications
Profitability in function of use of design
Manufacturing companies
48
Design used for multimedia applications
Number of companies with increased/decreased
profitability
49
Design used for multimedia applications
Solvency in function of use of design
Manufacturing companies
50
Design used for multimedia applications
Number of companies with increased/decreased
solvency
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Design used for multimedia applications
Liquidity in function of use of design
Manufacturing companies
52
Design used for multimedia applications
Number of companies with increased/decreased
liquidity
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Communication Brand

• Design is used (n75)
• Design is not used (n325)

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Design used for communication brand
Average turnover (in million ) in function of
use of design
Manufacturing companies
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Design used for communication brand
Number of companies with increased/decreased
turnover
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Design used for communication brand
Average number of employees in function of use of
design
Manufacturing companies
57
Design used for communication brand
Number of companies with increased/decreased of
employees
58
Design used for communication brand
Profitability in function of use of design
Manufacturing companies
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Design used for communication brand
Number of companies with increased/decreased
profitability
60
Design used for communication brand
Solvency in function of use of design
Manufacturing companies
61
Design used for communication brand
Number of companies with increased/decreased
solvency
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Design used for communication brand
Liquidity in function of use of design
Manufacturing companies
63
Design used for communication brand
Number of companies with increased/decreased
liquidity
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Interior Exhibition design

• Design is used (n72)
• Design is not used (n328)

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Design used for interior exhibition design
Average turnover (in million ) in function of
use of design
Manufacturing companies
66
Design used for interior exhibition design
Number of companies with increased/decreased
turnover
67
Design used for interior exhibition design
Average number of employees in function of use of
design
Manufacturing companies
68
Design used for interior exhibition design
Number of companies with increased/decreased of
employees
69
Design used for interior exhibition design
Profitability in function of use of design
Manufacturing companies
70
Design used for interior exhibition design
Number of companies with increased/decreased
profitability
71
Design used for interior exhibition design
Solvency in function of use of design
Manufacturing companies
72
Design used for interior exhibition design
Number of companies with increased/decreased
solvency
73
Design used for interior exhibition design
Liquidity in function of use of design
Manufacturing companies
74
Design used for interior exhibition design
Number of companies with increased/decreased
liquidity
75
Service design

• Design is used (n53)
• Design is not used (n347)

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Design used for service design
Average turnover (in million ) in function of
use of design
Manufacturing companies
77
Design used for service design
Number of companies with increased/decreased
turnover
78
Design used for service design
Average number of employees in function of use of
design
Manufacturing companies
79
Design used for service design
Number of companies with increased/decreased of
employees
80
Design used for service design
Profitability in function of use of design
Manufacturing companies
81
Design used for service design
Number of companies with increased/decreased
profitability
82
Design used for service design
Solvency in function of use of design
Manufacturing companies
83
Design used for service design
Number of companies with increased/decreased
solvency
84
Design used for service design
Liquidity in function of use of design
Manufacturing companies
85
Design used for service design
Number of companies with increased/decreased
liquidity
86
Domain of implementation and company size

• There is a positive relationship between the
  domain of design implementation and the company
  size.
• Packaging design (78 low vs. 89 high)
• Regular updates of packaging
• Regular rethinking of packaging
• Packaging is designed by an external specialist
• Client-centred design (94 low vs. 67 high)
• Research into user friendliness of products
• Rethinking of product functionalities
• The production hall is dressed
• Service design department
• Research into customer needs and expectations
• Cooperation with external partners (73 low vs.
  73 high)
• Product development in partnership
• House style developed by an external specialist

87
The attitude of companies towards design is
broadening
88
Attitude towards design association with design
n400
n400
n100