Design and competitiveness

The headline

As you’d expect, businesses have to balance their design activity with other factors. But its significance rises when a business is growing rapidly, suggesting a link between design and growth.

The details

How do UK businesses compete?

Rapidly growing businesses are twice as likely as others to compete on the basis of innovation. A third (34%) do so.
UK average 16%.

Bigger businesses are also more likely to compete through innovation than smaller ones. A quarter of large businesses do so.

Businesses recognise that adding value to products and services is a much more significant factor (77%) in competing than innovating in the abstract (16%). Adding value is often achieved through a design process that understands and meets users’ needs and is, of course, a key means of delivering innovation.

For more on adding value and the impact of using design to do so, see Adding value through design.

'Innovation through design can help firms avoid competing on price alone. While some consumers will always buy the cheapest product or service in the market, non-price attributes such as quality can often be more important determinants of overall demand than price.'

DTI Economics Paper 15, Creativity, Design and Business Performance, November 2005

Looking at sectors, businesses in manufacturing are most likely to compete on innovation. Those in retail, wholesale and leisure and primary industry, construction, utilities and communications are least likely to do so.

How do businesses think their customers make buying decisions?

Businesses think 81%of their private sector clients and 74% of their public sector clients base their decision to buy on the added value of products or services.

In contrast, businesses think innovation ranks low as a factor in buying.

These findings broadly mirror those for how businesses compete.

Most (95%) of the businesses we surveyed had private sector customers. 41% had public sector customers.