Design in the manufacturing sector

The headline

Manufacturing is the sector most positive about design in the UK.

50% of manufacturers feel design has an either integral or significant role to play in their business, compared to a UK average of 37%.

And they’re convinced it has a vital impact on UK economy. 79% believe that design is integral to our future economic performance. And 77% recognise the link between design and profitability.

The details

How do businesses in this sector see design’s role?

Manufacturers are more positive about design’s role than any other sector. 50% feel it has an integral or significant role to play.
UK average 37%

A quarter of manufacturers rank design as the most crucial factor in their business success (UK average 15%). And over half (56%) feel design has become more important in the past decade.

Do businesses in this sector believe it’s worth investing in design?

Two thirds (69%) of manufacturers feel it’s worth investing in design.
UK average 50%

Manufacturing is the sector most likely to believe it’s worth investing in design.

The amount businesses invest is also rising significantly. Almost half (44%) now invest more than they used to.

How do businesses in this sector use design?

80% of manufacturers use design in their business. That’s more than in any other sector.
UK average 68%

Unsurprisingly, product and industrial design has huge appeal. Perhaps less expected is that digital and multimedia design is also more popular with manufacturers than with other sectors.

Manufacturers mostly apply design to externally facing functions (such as branding) and new product development. With the latter, they use design almost twice as much as the UK average.

One area for more activity could be applying design to internally facing functions, where manufacturers are less active than others.

Do manufacturers use designers?

Compared to others, manufacturers are more likely to have a dedicated design department. A third (34%) do.
UK average 25%

They’re also more likely to hire external design consultants.

Do manufacturers commission design from outside the UK?

A quarter of manufacturers (25%) have commissioned some of their design work from abroad. They’re by far the most active sector in this respect.
UK average 9%

In addition, 40% of manufacturers sell products made abroad. In 17% of manufacturers, up to a quarter of products are manufactured abroad. In 16% of businesses, more than three quarters are.

37% of manufacturers have some of their products designed abroad. For one in ten (11%), under of a quarter of their products are designed abroad. But for 15%, more than three quarters are.

How do businesses use design when developing new products or services?

Design either leads or plays a part in developing new products and services for over a third of manufacturers (36%).
UK average 29%

The majority (60%) of manufacturers have developed a new product or service in the past three years.

This compares well to the UK average (40%). And it’s way ahead of other sectors – such as primary industry, construction, utilities and communications (27%), and retail, wholesale and leisure services (34%).

How do businesses in this sector compete?

Innovation means more to manufacturers than it does to others. Nearly a third (29%) compete through it.
UK average 16%

Like businesses in other sectors, manufacturers are most likely to compete on the added value of their products or services (68%).

Manufacturers are also adept at finding new ways to compete. One in three (35%) now sell services attached to their product, such as repair work, supplies, financing or insurance.

How do manufacturing businesses think their customers make buying decisions?

Manufacturers think that 79% of their private sector customers and 83% of their public sector customers decide to buy based on the price or cost of their offer.
UK averages 65% and 69%

All other sectors rate the added value of the product or service as the main reason to buy.

Manufacturers think that 23% of customers (both private and public sector) buy because of innovation. That’s above the UK averages (14% and 19%).

Sector portrait

Manufacturing is a shrinking sector. In 2003, the sector employed around 3.5million people. In 2004 this had fallen by 3% to around 3.3million.

Total turnover in the sector in 2004 was £465billion. There were 154,926 businesses

According to the Design Council’s National Survey of Firms, 88% of manufacturers have been in business for 10 years or more. This highlights the low number of new businesses.

More sector information is available from the Office for National Statistics.

What approach can I take with this information?

If you’re a business intermediary

This report can support you in discussing the value of design with manufacturing businesses.

While most (69%) manufacturers think it’s worth investing in design, the third that don’t could be persuaded if they knew that:

• Firstly, 77% of manufacturers see a link between design and profitability.
• Secondly, they’re right to. Elsewhere in our survey, we found that increased investment in design over the past three years increased the chance of turnover growth.

Investing in innovation could be one avenue for them to explore. Innovation means more to manufacturers than it does to other businesses. 29% compete through it, compared to 16% of businesses overall.

Though manufacturers are active in most areas of design, they use it less in internally facing design (such as workplace design and internal communications) than others. This could be another opportunity for increased activity.

If you’re a design business

Manufacturers are more likely than businesses in any other sector to use design. 80% do so. And they’re more likely to have design departments of their own (34% compared to 25%) and hire external consultants (26% compared to 19%).

This is therefore a sector worth targeting.

As expected, new product and service development is a key area. Our survey proves this – 54% of manufacturers apply design here, well ahead of the average 28%. And design either leads or plays a part in a third (36%) of all development projects.

This survey also throws up some less obvious opportunities. For example, manufacturers are more likely than others to use digital and new media design.

It’s also worth staying abreast of legislative changes that apply to certain design sectors, such as packaging and labelling, as these can provide fresh opportunities within a sector like manufacturing.

If you’re a design educator or student

Investment in design by manufacturers is rising significantly. 44% now invest more than they did three years ago (UK average 31%).

For people researching issues around design, tracking this increase in investment against performance could prove interesting grounds for study.

For students interested in a career in design, it’s definitely worth familiarising yourself with the manufacturing sector. Its businesses use design a lot more than others, creating numerous opportunities for you. There are more dedicated design departments in manufacturing businesses than there are in most other businesses, and external agencies also get more work from this sector than from others.

And certain types of design are also strong here, most obviously product and industrial design. Less expected is the relative popularity of digital and multimedia design.