Investing in Industrial Design

As in many others, also in the industrial field, differentiation is very difficult to achieve, besides the adjusted prices dictated by the market, also companies have to comply with technical specifications, standards, etc. … which complicates the task of adding value to products, making even more difficult the desired differentiation. Precisely because of this difficulty, I think it is worth considering investing in Industrial Design as profitable way to compete.

From the point of view of Engineering and Production, Industrial Design is often seen as something merely formal or aesthetic, in other words, superficial, and therefore dispensable in products whose mission is to solve a technical problem. This perception is linking design to sectors such as fashion, decoration and certain consumer categories that clearly have little to do with mass production of a functional product highly technical. However, this interpretation is not correct and it is worth remembering the extended definition that the International Council of Design ICSID makes of this discipline:

“Industrial Design is a strategic problem-solving process that drives innovation, builds business success and leads to a better quality of life through innovative products, systems, services and experiences. Industrial Design bridges the gap between what is and what’s possible. It is a trans-disciplinary profession that harnesses creativity to resolve problems and co-create solutions with the intent of making a product, system, service, experience or a business, better. At its heart, Industrial Design provides a more optimistic way of looking at the future by reframing problems as opportunities. It links innovation, technology, research, business and customers to provide new value and competitive advantage across economic, social and environmental spheres.

Industrial Designers place the human in the centre of the process. They acquire a deep understanding of user needs through empathy and apply a pragmatic, user centric problem solving process to design products, systems, services and experiences. They are strategic stakeholders in the innovation process and are uniquely positioned to bridge varied professional disciplines and business interests. They value the economic, social and environmental impact of their work and their contribution towards co-creating a better quality of life”

As in any definition, some of the statements are points of discussion, but what is clear to everyone is that Industrial Design as a discipline has a role in the industrial development that goes beyond the formal aspect, ranging from functional and technical aspects up to the user experience.

Design as a competitive weapon

Even having a consensus on that the design can be applied to industrial products, regardless how technical they are, can we say that Design is a way to compete? Clearly yes, not only because there are many examples¹, but because there are several studies that prove it statistically.

The first research that I would like to mention is the Gemser – Leenders², University of Groningen published in 2001, which concludes that there is a positive correlation between business performance of the companies analyzed and their investment effort in Industrial Design. In other words, the better the Industrial Design is integrated into the process of new products creation and greater investment in ID, the more competitive the companies are. Finally, the study noted that the more focused the design is on innovation, then the most visible the correlation appears.

The other reaserch that I want to share was published in 2005 by Platt – Hertenstein – Veryzer³, Harvard. In this case the study deepens more in companies, analyzing the main financial indicators (including sales, EBITDA, Cash, ROA …) of 70 companies in different sectors, indeed, some of them really industrial ones. Findings could not be more clear:

“This research suggests that there is a strong relationship between effective industrial design and better corporate performance. If one accepts that effective industrial design leads to better financial performance, then the robustness of these findings suggests that expenditures on industrial design should be considered investments similar to expenditures on capital equipment. As such, industrial design investments are capable of generating financial returns.”

We all know that, there is a certain distance from theory to practice, but I’m sure that at least it is worth thinking a bit more about the possibilities that this discipline offers, do you agree?

¹If you are interested I recommend a short and very entertaining book by Andre Ricard, called “Cases of Design”.

²Gemser-Leenders: “How Integrating Design in the Product Development Process Impacts on Company Performance”

³Platt-Hertenstein-Veryzer: “The Impact of Industrial Design Effectiveness on Corporate Financial Performance”