Survey Design crucial for recovery

October 30, 2010
| By Pete Daly |
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Design has always been a critical element in the success of both automotive and furniture manufacturers — everybody has heard of the Edsel — but a new survey reveals the continuing importance of design in the West Michigan economy.

The survey, an attempt to identify the key factors of growth for West Michigan business, was done late in the summer by the W.E. Upjohn Institute for Employment Research in Kalamazoo. More than 2,200 West Michigan companies were surveyed, with 376 responding, and 75 percent of those indicated they either “agree” or “strongly agree” that their success over the next five years will rely on being able to compete in product or service design. Design even placed higher than many traditional factors business owners and managers hope for, such as less government regulation and engineering the waste out of their current processes.

Despite the current lackluster economy, about one out of every four firms indicated they will likely or very likely hire a new production or system designer during the next five years — a higher rate than either information technology or accounting professionals, both of which had seen strong hiring rates in the past.

The survey also showed that the average rate of sales growth over the past five years was 9.9 percent for those firms with an expressed interest in design, while companies that weren’t as interested reported an average sales growth rate of 5.6 percent. An Upjohn Institute spokesperson cautioned, however, that that difference may be statistically insignificant due to the small sample size and high variability.

The survey was commissioned by Kendall College of Art & Design on behalf of Design West Michigan, a professional organization of design practitioners, which is affiliated with and supported by Kendall College of Art & Design of Ferris State University.

"This report is significant because it provides evidence of the role that design and design thinking play in a business's success,” said Oliver H. Evans, president/vice chancellor of Kendall. “Beyond that, the overriding significance of this report is its development of a research methodology that can identify that significance. The report goes beyond the anecdotal and breaks ground in developing research that supports design's significance. For a college that prepares its graduates for professional lives as designers, this report both affirms the reality and value of the new paradigms in design education Kendall is developing and implementing. As a part of Ferris State University, with its commitment to economic development and the professional preparation of its graduates, Kendall College of Art & Design is proud to have been able to support Design West Michigan and the Upjohn Institute in this significant study."

George Erickcek, senior regional analyst at the Upjohn Institute who worked on the survey, jokingly described it as a “stealth” survey because it was written in a way that did not reveal that its focus was on the role of design in West Michigan business.

The names of the 2,280 West Michigan companies that received the three-page survey in the mail were provided by economic development agencies including The Right Place, Muskegon Area First, Lakeshore Advantage, Battle Creek Unlimited, Southwest Michigan First, Southwestern Michigan Economic Growth Alliance, Cornerstone Alliance and the Chamber of Grand Haven/Spring Lake/Ferrysburg.

The first part of the survey was a list of 19 factors, with the companies asked to rate them as to which are key factors impacting that company’s success in the next five years. Lower taxes was rated the highest, with 81.4 percent of respondents saying they “agreed” or “strongly agreed” it was key. Taxes was followed by “being price competitive,” “controlling labor costs,” “ability to enter new markets,” and then “ability to compete on product design,” which got a 75 percent rating. “Ability to redesign existing products” was rated 48.1 percent, above “growth of medical devices industry” (39.9 percent), “growth of auto industry” (37.2 percent) and “growth of furniture industry” (32.7 percent).

The survey also asked companies to rate the importance of activities that may be undertaken by the regional economic development agencies. “Carry out retention calls and visits to your firm” got the lowest rating, with only 16.5 percent rating it “important” or “very important,” while “improve the state’s business climate” was rated 90.4 percent. The second-lowest rated factor of the eight listed was “providing seminars on design/engineering topics,” at 21.3 percent. “Provide access to capital” was rated 56.1 percent.

All the companies were promised anonymity. A little over one-third of all the responses came from companies in auto parts, fabricated metal products and industrial machinery or equipment. Plastics and service companies each represented about 5 percent of the responses, with furniture parts and finished furniture together totaling about 7 percent. Food products and processing was about 5 percent; pharmaceuticals about 3.5 percent; medical instruments and equipment about 3 percent; and electronics or computers about 3 percent.

Most of the firms targeted for the surveys were concentrated in the manufacturing sector because companies that make complex products are the most likely to utilize and benefit from design as a competitive advantage, according to the Upjohn Institute report on the survey. Manufacturers also play a dominant role in the West Michigan economy, “which makes their continued success of great concern to economic developers and others,” according to the report.

Brad R. Watts, a regional analyst at the Upjohn Institute who worked on the survey with Erickcek, said there has not been much research done in the past on the importance of industrial design in the West Michigan economy, and “really a lack of it, even nationally.”

John R. Berry, executive director of Design West Michigan, said he was “not aware of anywhere in the U.S. that has looked at relating design to business success.” He noted, however, that there have been such studies in Great Britain and perhaps in Sweden and Finland.

Berry said the British Design Council was established by an act of Parliament about 25 years ago. It is a nonprofit organization that is “helping Britain use design to build a stronger economy and improve everyday life,” according to its website. The government set up the organization “because they believed design was important to the economic future of the country,” said Berry. “They wanted to have an organization that could help people understand design, promote design and validate the value of design.”

The British Design Council is “probably one of the world’s best design councils,” with a staff of 45, added Berry. The council has “validated in their country the fact that people who invest in design have a much higher return on investment, and are out-performing companies that don’t invest in design,” he said.

There is a U.S. National Design Policy Initiative, based in Washington, D.C., which hosted the International Design Education Alliance for Schools Conference in April, the first of several such conferences. According to the Initiative website, the round table topics included identification of the key factors in a successful 21st century education system for K-12 students, educators and society, and “the role of design (making and thinking) in enabling this educational success.”

Jake Lefebure, a co-founder of the award-winning Design Army graphic and interactive design agency in Washington, D.C., was scheduled to be in Grand Rapids last weekend as a special guest at the “Freak Show & Tell” party for designers put on by AIGA West Michigan.

Lefebure told the Business Journal he was aware of the industrial design reputation of West Michigan manufacturing.

“Herman Miller is there, right? That’s a pretty big one, right there,” he said.

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