the economical impact of design on companies in flanders

The economical impact of design on

companies in Flanders

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.

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.

Survey 2007

Questionnaire

Business Performance

Indicators

Survey 2003

Questionnaire

Indicators

ComparisonManufacturing

companies

Evolution in function of

design implementation

Comparison Manufacturing

vs. Service companies

amongst 400 manufacturing

companies with at least 5 employees

companies and 100 service companies with

at least 5 employees

Indicators ofbusiness performance

Indicators of business performance

Business performance parameters included in the analysis:

• Turnover

• Number of employees

• Profitability

• Solvency

• Liquidity

Indicators of business performance

Profitability =PROFITEQUITY

Solvency = EQUITYTOTAL LIABILITIES

Liquidity =CASH + ACCOUNTS RECEIVABLE < 1yearCURRENT LIABILITIES / DEBTS <1year

To what relative extent is the company making profit

To what extent can the company survive when business is bad

To what extent is the company able to fulfil short-term financial obligations

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)

28 design indicators

Office furniture is designed by an external specialist

Patent application

The production hall is dressedPackaging is designed by an external specialist

Receive media attention for innovative productsHouse style developed by an external specialist

Regular rethinking of the work place interiorExplicit dress code exceeding safety requirements

Regular rethinking of packagingRegular updates of packaging

Visits to design fairs / consulting design magazinesIn house designer

Product development in partnershipDesign used as tool for making a difference (USP)

Rethinking of product functionalitiesDevelopment of more ecological productsResearch into user friendliness of products

Regular updates of product modelsRegular updates of the shape of products

Continuous search for new materialsFocus on long lasting use of materials

Regular update of the technology used in productsRegular rethinking of the production process

Service design departmentResearch into customer needs and expectations

Development of procedures to improve our services

Registration of brand namesRegistration of models

Measurement of design application

Half of the Flemish companies indicate to

apply design

Already 12% of the Flemish companies indicate to apply

design strategically

0% 25% 50% 75% 100%

production 2007

services 2007

Design as a strategic value Use of design for the development of products Use of design for the finishing of products

No systematic use of design No implementation of design

Implementation of design

Degree in which design is used in the company.

19,5 20,322,2

20,7 19,9

14,912,5

Sample(Turnover)

Not applied(Turnover)

Occasionally(Turnover)

For productfinishing

(Turnover)

Integrated(Turnover)

Strategic(Turnover)

2001'2005'

Average turnover (in million €) in function of the degree of design implementation

Manufacturing companies

43,540,7

33,736,7

41,539,5

Sample(#employees)

Not applied(#employees)

Occasionally(#employees)

For productfinishing

(#employees)

Integrated(#employees)

Strategic(#employees)

2001'2005'

Average number of employees in function of the degree of design implementation

Survey 2003

Questionnaire

IndicatorsEvolution in function of

17,7 18,3

9,9 10,9

34,5 34,9

1999' 2001' 2005'

Sample (Turnover) Low group (Turnover) High group (Turnover)

42,4 43,2 42,1

21,3 20,9 20,4

99,0106,6 103,9

1999' 2001' 2005'

Sample (# employees) Low group (# employees) High group (# employees)

There is a positive relationship between design

implementation and the profitability of the company

ProfitabilityProfitability 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.

Profitability

29,3 29,6

32,6 33,1

1999' 2001' 2005'

Sample (Profitability) Low group (Profitability) High group (Profitability)

Implementation of design: High vs. Low

42,06% 43,10%51,85%

57,94% 56,90%48,15%

Sample Low High

Increased Decreased

Profitability: increase or decrease from 2001 2005

There is no relationship found between design

implementation and the solvability and liquidity of the

company

Survey 2007

Questionnaire

Indicators

Survey 2003

Questionnaire

Indicators

ComparisonManufacturing

companies

Comparison Manufacturing

vs. Service companies

companies and 100 service companies with

at least 5 employees

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

Total Survices Manufacturing265 53 212

Development of procedures to improve our services 79,25% 84,91% 77,83%Regular rethinking of the production process 77,36% 71,70% 78,77%

Regular update of the technology used in products 68,30% 86,79% 63,68%Research into customer needs and expectations 61,51% 73,58% 58,49%

Focus on long lasting use of materials 58,11% 32,08% 64,62%Continuous search for new materials 51,70% 24,53% 58,49%

Regular updates of the shape of products 43,02% 45,28% 42,45%Rethinking of product functionalities 42,64% 45,28% 41,98%

Registration of brand names 36,60% 37,74% 36,32%Research into user friendliness of products 35,85% 37,74% 35,38%Development of more ecological products 35,85% 32,08% 36,79%

Regular updates of product models 35,09% 37,74% 34,43%Product development in partnership 33,21% 30,19% 33,96%

House style developped by an external specialist 30,94% 47,17% 26,89%Registration of models 24,15% 15,09% 26,42%

In house service designer 23,77% 28,30% 22,64%The production hall is dressed 21,13% 49,06% 14,15%Regular updates of packaging 20,38% 16,98% 21,23%

Regular rethinking of packaging 18,87% 11,32% 20,75%Explicit dresscode exceeding safety requirements 16,60% 18,87% 16,04%

Office furniture is designed by an external specialist 15,85% 26,42% 13,21%Design used as tool for making a difference (USP) 15,85% 11,32% 16,98%

Patent application 15,47% 9,43% 16,98%In house designer 14,72% 5,66% 16,98%

Packaging is designed by an external specialist 13,96% 9,43% 15,09%Receive media attention for innovative products 11,32% 15,09% 10,38%

Regular rethinking of the work place interior 10,57% 18,87% 8,49%Visits to design fairs / consulting design magazines 9,81% 3,77% 11,32%

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 don’t 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

Implementation of designBased upon “The Danish Design Ladder”

• Design is not implemented (n=212)

• Design is implemented for styling (n=58)• Occasionally (n=24)• For product finishing (n=34)

• Design is implemented systematically or strategically (n=129)

• Integrated in business processes (n=81)• Strategically (n=48)

Total Not applied For styling ImplementedTotal 400 212 58 129

Regular rethinking of the production process 84,25% 78,77% 94,83% 88,37%Development of procedures to improve our services 84,50% 77,83% 96,55% 89,92%

Focus on long lasting use of materials 69,25% 64,62% 65,52% 78,29%Regular update of the technology used in products 73,25% 63,68% 77,59% 86,82%

Continuous search for new materials 71,75% 58,49% 79,31% 89,92%Research into customer needs and expectations 63,00% 58,49% 63,79% 69,77%

Regular updates of the shape of products 56,75% 42,45% 67,24% 75,19%Rethinking of product functionalities 51,50% 41,98% 65,52% 60,47%

Development of more ecological products 48,50% 36,79% 58,62% 62,79%Registration of brand names 41,50% 36,32% 36,21% 51,94%

Research into user friendliness of products 46,75% 35,38% 56,90% 61,24%Regular updates of product models 54,00% 34,43% 62,07% 82,17%Product development in partnership 44,75% 33,96% 56,90% 56,59%

House style developped by an external specialist 35,75% 26,89% 43,10% 47,29%Registration of models 30,25% 26,42% 29,31% 37,21%

In house service designer 30,50% 22,64% 36,21% 40,31%Regular updates of packaging 28,50% 21,23% 37,93% 35,66%

Regular rethinking of packaging 28,75% 20,75% 36,21% 37,98%In house designer 42,50% 16,98% 50,00% 80,62%

Design used as tool for making a difference (USP) 41,25% 16,98% 50,00% 77,52%Patent application 20,75% 16,98% 18,97% 27,91%

Explicit dresscode exceeding safety requirements 18,75% 16,04% 15,52% 24,03%Packaging is designed by an external specialist 21,75% 15,09% 32,76% 27,13%

The production hall is dressed 24,25% 14,15% 29,31% 38,76%Office furniture is designed by an external specialist 21,00% 13,21% 24,14% 32,56%Visits to design fairs / consulting design magazines 30,50% 11,32% 31,03% 62,02%

Receive media attention for innovative products 22,00% 10,38% 22,41% 40,31%Regular rethinking of the work place interior 24,50% 8,49% 39,66% 44,19%

Implementation of designBased upon 28 indicators

25% companies with overall the highest degree of implementation (n=101)

25% companies with overall the lowest degree of implementation (n=97)

Sample (Turnover) Low group (Turnover) High group (Turnover)

Sample (# employees) Low group (# employees) High group (# employees)

Design was mentioned as a key success

factor for business performance

Design was, however, the least important of all factors presented

To which extent are the different aspects of doing business determining for the success of the company?

Scores were given from 1 up to 7.

1 2 3 4 5 6 7

Financial management

Internal communication

Operational management

Marketing and sales

Design

Production 2007 Services 2007

n=400 n=100

Better business performance is especially

prominent (turnover, profitability, solvency,

liquidity) in companies that implementeddesign for:

- Multimedia applications- Communications & Brand - Interior & Exhibition design- Service design

0% 25% 50% 75% 100%

Multimedia applications

Product&industrial design

Communications&brand

Interior&exhibition design

Service design

Clothing or textiles

production 2007 services 2007

Implementation of designPurposes 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

n=188 n=47

Multimedia applications• Design is used (n=97)

• Design is not used (n=303)

19,5 19,5 19,420,7

Sample (Turnover) No Use of design (Turnover) Design of Multi Media (Turnover)

Design used for multimedia applications

Average turnover (in million €) in function of use of design

60,42% 57,84%66,67%

39,58% 42,16%33,33%

Sample No use of design Design in Multi Media

Increased Decreased

Number of companies with increased/decreased turnover

Average number of employees in function of use of design

Sample (# employees) No Use of design (# employees) Design of Multi Media (#employees)

Number of companies with increased/decreased # of employees

48,54% 48,45% 48,81%

50,29% 50,78% 48,81%

Increased Decreased

42,046,2

Sample (Profitability) No Use of design (Profitability) Design of Multi Media(Profitability)

Profitability in function of use of design

Number of companies with increased/decreased profitability

41,18% 40,76% 42,25%

57,25% 58,15% 54,93%

Increased Decreased

Solvency in function of use of design

36,7 36,238,5

39,838,6

Sample (Solvency) No Use of design (Solvency) Design of Multi Media (Solvency)

2001'2005'

56,36% 54,58%61,90%

39,02% 40,46%34,52%

Increased Decreased

Number of companies with increased/decreased solvency

13,2 13,6

15,3 14,9

Sample (Liquidity) No Use of design (Liquidity) Design of Multi Media (Liquidity)

Liquidity in function of use of design

54,20% 51,72%61,90%

45,80% 48,28%38,10%

Increased Decreased

Number of companies with increased/decreased liquidity

Communication & Brand• Design is used (n=75)

19,5 18,9

21,720,7

Sample (Turnover) No Use of design (Turnover) Design of communication(Turnover)

Design used for communication & brand

60,42% 58,41%67,74%

39,58% 41,59%32,26%

Sample No use of design Design in communication

Increased Decreased

Design used for communication &brand

Sample (# employees) No Use of design (# employees) Design of communication (#employees)

48,54% 48,58% 48,33%

50,29% 50,00% 51,67%

Increased Decreased

56,360,0

40,342,038,7

Sample (Profitability) No Use of design (Profitability) Design of communication(Profitability)

41,18% 39,13%50,00%

57,25% 59,42%47,92%

Increased Decreased

36,7 37,135,1

39,8 40,138,5

Sample (Solvency) No Use of design (Solvency) Design of communication(Solvency)

2001'2005'

56,36% 55,79% 59,02%

39,02% 38,95% 39,34%

Increased Decreased

13,2 13,8

15,3 15,7

Sample (Liquidity) No Use of design (Liquidity) Design of communication(Liquidity)

54,20% 54,58% 52,46%

45,80% 45,42% 47,54%

Increased Decreased

Interior & Exhibition design• Design is used (n=72)

19,518,8

Sample (Turnover) No Use of design (Turnover) Design of workplace (Turnover)

Design used for interior & exhibition design

60,42% 59,50%65,22%

39,58% 40,50%34,78%

Sample No use of design Design in workplace

Increased Decreased

43,5 42,5

41,5 40,2

Sample (# employees) No Use of design (# employees) Design of workplace (#employees)

48,54% 47,87% 51,67%

50,29% 51,06% 46,67%

Increased Decreased

56,361,0

42,039,7

Sample (Profitability) No Use of design (Profitability) Design of workplace (Profitability)

41,18% 38,28%

54,35%

57,25% 61,24%

39,13%

Increased Decreased

36,7 36,9 35,9

Sample (Solvency) No Use of design (Solvency) Design of workplace (Solvency)

2001'2005'

56,36% 56,29% 56,67%

39,02% 40,56%31,67%

Increased Decreased

13,2 13,8

15,3 14,9

Sample (Liquidity) No Use of design (Liquidity) Design of workplace (Liquidity)

54,20% 53,33% 58,33%

45,80% 46,67% 41,67%

Increased Decreased

Service design• Design is used (n=53)

19,5 20,1

20,7 20,3

Sample (Turnover) No Use of design (Turnover) Design of services (Turnover)

Design used for service design

60,42% 58,20%

72,73%

39,58% 41,80%

27,27%

Sample No use of design Design in services

Increased Decreased

43,5 43,146,5

41,5 41,0

Sample (# employees) No Use of design (# employees) Design of services (# employees)

48,54% 47,64%54,35%

50,29% 51,01%45,65%

Increased Decreased

56,359,1

39,842,0 42,3

Sample (Profitability) No Use of design (Profitability) Design of services (Profitability)

41,18% 40,37%45,95%

57,25% 58,26%51,35%

Increased Decreased

36,7 37,2

39,8 39,9 39,2

Sample (Solvency) No Use of design (Solvency) Design of services (Solvency)

2001'2005'

56,36% 55,33%63,04%

39,02% 40,00%32,61%

Increased Decreased

13,2 13,7

15,3 15,5

Sample (Liquidity) No Use of design (Liquidity) Design of services (Liquidity)

54,20% 52,84%63,04%

45,80% 47,16%36,96%

Increased Decreased

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

Domain of implementation and company size

The attitude of companies towards

design is broadening

0% 25% 50% 75% 100%

Form, design, product appearance

Renewing, innovative

In a modern way

Distinctive, original

Creation, Product development, invention

Differently

Style, irradiation

Packaging

production 2003 production 2007 services 2007

Attitude towards design: association with design

n=400 n=400 n=100

the economical impact of design on companies in flanders

Documents

in flanders fields

in flanders field

flanders (1)

challenges for utility companies in flanders to accommodate...

vet in flanders. flanders in belgium flanders = flemish...

imade flanders inshape

moll flanders

flanders information evening

tourism in flanders

flanders literature

fabulous flanders

flanders today march

taste flanders' finest - koelnmesse hall 4.2 - ism2015 -...

the management plan for flanders moss 2016-2026 · flanders...

abc plurilingualism flanders

halte shuttle kant flanders ... -...

nanos flanders synergy

ffm flanders-programme

reputation study flanders 2017...9 people from the...

education in flanders - unesco · education in flanders /5...