1. The economical impact of design on companies in Flanders

2. The 2003 study

3. 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.

4. The 2007 study

5. 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.

6. Survey 2007 Questionnaire Business Performance Indicators Survey 2003 Questionnaire Business Performance Indicators Comparison Manufacturing companies Evolution in function of design implementation Comparison Manufacturing vs. Service companies amongst 400 manufacturing companies with at least 5 employees amongst 400 manufacturing companies and 100 service companies with at least 5 employees

7. Indicators of business performance

8. Indicators of business performance Business performance parameters included in the analysis: Turnover Number of employees Profitability Solvency Liquidity

9. Indicators of business performance Profitability = PROFIT EQUITY Solvency = EQUITY TOTAL LIABILITIES Liquidity = CASH + ACCOUNTS RECEIVABLE < 1year CURRENT 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

10. Rentabiliteit = WINST EIGEN VERMOGEN Solvabiliteit = EIGEN VERMOGEN TOTAAL VERMOGEN Liquiditeit = KAS + VORDERINGEN < 1 JAAR SCHULDEN < 1 JAAR Indicators of business performance

11. Measurement of design application

12. 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)

13. 28 design indicators Office furniture is designed by an external specialist Patent application The production hall is dressed Packaging is designed by an external specialist Receive media attention for innovative products House style developed by an external specialist Regular rethinking of the work place interior Explicit dress code exceeding safety requirements Regular rethinking of packaging Regular updates of packaging Visits to design fairs / consulting design magazines In house designer Product development in partnership Design used as tool for making a difference (USP) Rethinking of product functionalities Development of more ecological products Research into user friendliness of products Regular updates of product models Regular updates of the shape of products Continuous search for new materials Focus on long lasting use of materials Regular update of the technology used in products Regular rethinking of the production process Service design department Research into customer needs and expectations Development of procedures to improve our services Registration of brand names Registration of models Measurement of design application

14. Half of the Flemish companies indicate to apply design

15. Already 12% of the Flemish companies indicate to apply design strategically

16. Implementation of design Degree in which design is used in the company. n=400 n=100

17. Average turnover (in million €) in function of the degree of design implementation Manufacturing companies Implementation of design

18. Average number of employees in function of the degree of design implementation Manufacturing companies Implementation of design

19. Survey 2003 Questionnaire Business Performance Indicators Evolution in function of design implementation amongst 400 manufacturing companies with at least 5 employees

20. There is a positive relationship between design implementation and company size. This shows both in turnover and the number of employees

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

22. Average number of employees in function of the degree of design implementation Implementation of design

23. There is a positive relationship between design implementation and the profitability of the company

24. 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.

25. Implementation of design Profitability

26. Implementation of design: High vs. Low Profitability: increase or decrease from 2001  2005

27. There is no relationship found between design implementation and the solvability and liquidity of the company

28. Survey 2007 Questionnaire Business Performance Indicators Survey 2003 Questionnaire Business Performance Indicators Comparison Manufacturing companies Evolution in function of design implementation Comparison Manufacturing vs. Service companies amongst 400 manufacturing companies with at least 5 employees amongst 400 manufacturing companies and 100 service companies with at least 5 employees

29. 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

31. 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

32. Implementation of design Based 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)

33. Implementation of design

34. Based upon 28 indicators 25% companies with overall the highest degree of implementation (n=101) Vs. 25% companies with overall the lowest degree of implementation (n=97)

35. Average turnover (in million €) in function of the degree of design implementation Manufacturing companies Implementation of design

36. Average number of employees in function of the degree of design implementation Manufacturing companies Implementation of design

37. Design was mentioned as a key success factor for business performance

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

39. Implementation of design 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. n=400 n=100

40. Better business performance is especially prominent (turnover, profitability, solvency, liquidity) in companies that implemented design for: - Multimedia applications - Communications & Brand - Interior & Exhibition design - Service design

41. 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 n=188n=47

42. Multimedia applications Design is used (n=97) Design is not used (n=303)

43. Design used for multimedia applications Average turnover (in million €) in function of use of design Manufacturing companies

44. Number of companies with increased/decreased turnover Design used for multimedia applications

45. Average number of employees in function of use of design Manufacturing companies

46. Number of companies with increased/decreased # of employees Design used for multimedia applications

47. Profitability in function of use of design Manufacturing companies

48. Number of companies with increased/decreased profitability Design used for multimedia applications

49. Solvency in function of use of design Manufacturing companies

50. Number of companies with increased/decreased solvency Design used for multimedia applications

51. Liquidity in function of use of design Manufacturing companies

52. Number of companies with increased/decreased liquidity Design used for multimedia applications

53. Communication & Brand Design is used (n=75) Design is not used (n=325)

54. Design used for communication & brand Average turnover (in million €) in function of use of design Manufacturing companies

55. Number of companies with increased/decreased turnover Design used for communication &brand

56. Average number of employees in function of use of design Manufacturing companies Design used for communication &brand

57. Number of companies with increased/decreased # of employees Design used for communication &brand

58. Profitability in function of use of design Manufacturing companies Design used for communication &brand

59. Number of companies with increased/decreased profitability Design used for communication &brand

60. Solvency in function of use of design Manufacturing companies Design used for communication &brand

61. Number of companies with increased/decreased solvency Design used for communication &brand

62. Liquidity in function of use of design Manufacturing companies Design used for communication &brand

63. Number of companies with increased/decreased liquidity Design used for communication &brand

64. Interior & Exhibition design Design is used (n=72) Design is not used (n=328)

65. Design used for interior & exhibition design Average turnover (in million €) in function of use of design Manufacturing companies

66. Number of companies with increased/decreased turnover Design used for interior & exhibition design

67. Average number of employees in function of use of design Manufacturing companies Design used for interior & exhibition design

68. Number of companies with increased/decreased # of employees Design used for interior & exhibition design

69. Profitability in function of use of design Manufacturing companies Design used for interior & exhibition design

70. Number of companies with increased/decreased profitability Design used for interior & exhibition design

71. Solvency in function of use of design Manufacturing companies Design used for interior & exhibition design

72. Number of companies with increased/decreased solvency Design used for interior & exhibition design

73. Liquidity in function of use of design Manufacturing companies Design used for interior & exhibition design

74. Number of companies with increased/decreased liquidity Design used for interior & exhibition design

75. Service design Design is used (n=53) Design is not used (n=347)

76. Design used for service design Average turnover (in million €) in function of use of design Manufacturing companies

77. Number of companies with increased/decreased turnover Design used for service design

78. Average number of employees in function of use of design Manufacturing companies Design used for service design

79. Number of companies with increased/decreased # of employees Design used for service design

80. Profitability in function of use of design Manufacturing companies Design used for service design

81. Number of companies with increased/decreased profitability Design used for service design

82. Solvency in function of use of design Manufacturing companies Design used for service design

83. Number of companies with increased/decreased solvency Design used for service design

84. Liquidity in function of use of design Manufacturing companies Design used for service design

85. Number of companies with increased/decreased liquidity Design used for service design

86. 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

87. The attitude of companies towards design is broadening

88. Attitude towards design: association with design n=400 n=100