20% profit gain thanks to design

Philips Ambient Experience is an example of how design can change an unpleasant hospital procedure into a more positive experience which even makes children lay still in the MR scanner. This is vital in order to produce good images. Design: Philips Design, The Netherlands. Photo courtesy of Philips.

Download high resolution image

The profitability of a new product gains by 20% if design plays an important role in its development phase. This has been determined by the scientific research programme ‘Effectiveness of Design’, initiated by the Association of Dutch Designers (BNO) and financed by Stichting Pictoright and the Ministry of Economic Affairs. The study was conducted by Erasmus University Rotterdam and Delft University of Technology, with the participation of 400 managers of Dutch firms in the manufacturing and services sectors.

Tom Dorresteijn, BNO Chairman and initiator of the study: "We now have evidence for the economic-commercial value of design based on scientific, independent research. A greater focus on design by companies boosts financial performance and enhances the appeal of their products. With this research, the Netherlands has broken new ground. Design has been the subject of many studies, but a causal relationship between investing in design and commercial yield has never before been established.’ At the same time, the BNO Chairman views the research report as a first step that requires further elaboration and supplementary research.

Main conclusions of the research report

• The financial performance of a new product with much attention for both experience design (that stimulates the senses, invites self-expression and evokes emotions) and functional design (focusing on technology, functionality and ergonomics) is approximately 20% higher, on average, than the performance of new products with an average interest for the two design aspects.
• A new product will be more successful if a lot is invested in design during the development phase, and if designers are involved in its development. The research shows that several positive effects of design are greater to the extent that the designers have more freedom to investigate ideas that fall outside the scope of the project.
• The innovative quality of design in the field of experience and functionality has a positive effect on the quality of a product.
• Closely involving the commissioning client does not have a positive effect on the experience quality of a new product. A possible explanation is that designers focus more on innovation, while the client focuses more on the product features and functionality with which he is familiar.
• Involving designers in developing a company's website or corporate style (visual identity) enhances the company's image in areas such as corporate social responsibility, emotional appeal, financial success and good employer practices.

Design is also effective in Norway
A survey conducted last year by the Norwegian Design and Synnovate shows similar results: The study Design Diagnosis, concluded that design is an important driver in the development of the economically most successful companies in Norway. Not only has design led to increased turnover, market share and competitiveness, but companies with a focus on design is twice as innovative as compared with others.

Downloads

Download the report from the Norwegian study (PDF)

Download the Dutch research report: Design Effectiveness - Industry Report (PDF)

The Dutch research team

The research team consisted of project leader Professor Jan van den Ende, Dr. Marina Candi and a number of research assistants of the Rotterdam School of Management (Erasmus University), and Dr. Gerda Gemser of the Faculty of Industrial Design (Delft University of Technology).