ID is Key to Growth of Manufacturing Sector

NEA Publishes Industrial Design: A Competitive Edge for US Manufacturing Success

The National Endowment for the Arts has published Industrial Design: A Competitive Edge for US Manufacturing Success in the Global Economy to help advance design as an asset for improving manufactured products and processes. "Another example of the arts positively impacting business is the growing recognition among manufacturers of the value of industrial design and thinking," the NEA announced on April 2, 2017.

“In today’s hyper competitive, global marketplace, manufacturers need effective tools to survive and thrive, and design is one of those tools,” says Director of Design and Creative Placemaking Programs Jason Schupbach. “This publication is another way that the NEA is helping advance the fields of industrial design and design thinking, integrating design into business to improve the world we live in.”

The report makes the case that ID is an underutilized growth catalyst for US small and medium-sized manufactures (SMMs). Based on interviews with more than 40 field experts and an extensive literature review, the report lays out why industrial design is important, offers data and examples to support those assertions and shares successful models of practice from across the country.

Industrial design has become more important to manufacturing because of:

  • global competition and the imperative to innovate;
  • unforgiving pressure for successful product launches; 
  • high market expectations brought about by Apple;
  • hyper-connected products and systems through the Internet of Things (IoT);
  • and consumer demand for a responsive and high-quality user experience.

Among the benefits of industrial design are:

  • increased corporate value, with some design-led companies outperforming the S&P by 219 percent (Design Management Institute’s Design Value Index);
  • greater product innovation and company growth, where companies that integrate design have a 9.1 percent higher employment growth rate and 24 percent greater likelihood of product innovation (Fernando Galindo-Rueda and Valentine Millot, Measuring Design and its Role in Innovation); 
  • and cost savings, recognizing that 70 to 90 percent of a product’s cost are determined in the design phase.

IDSA Executive Director Daniel Martinage, CAE, and IDSA Board of Directors At-Large Director Paul Hatch were among those thanked by the NEA Design Program "for their valuable assistance with this report."

In addition, the NEA's Office of Research and Analysis and the US Commerce Department's Bureau of Economic Analysis have released the latest Arts and Cultural Production Satellite Account (ACPSA), and, for the first time, State-Level Estimates of Arts and Cultural Employment—an interactive map based on the ACPSA.

"Design services"—defined as "production of arts and cultural goods"—added $17 billion to the US economy in 2014 and sustained 2.6 percent average annual growth from 2012 to 2014. The ACPSA indicates that industrial design is one of the fastest-growing arts industries. Between 2012 and 2014, average annual growth in real value added by ID was 4.1 percent. By comparison, the overall arts economy grew by 1.4 percent and US GDP average annual growth was 1.3 percent. 

Michigan, Ohio, Vermont and Oregon have the highest concentration of industrial designers and the highest compensation for industrial designers. In 2014, Michigan’s ID firms employed 4,774 workers and Ohio’s employed 3,301. As a share of each state’s total workforce, arts and cultural employment in ID services was, respectively, 5.6 times and 3.1 times greater than the national index.

In Vermont, ID firms employed 132 workers, but as a share of Vermont’s workforce (which totaled fewer than 319,000 in 2014), workers in the state’s industrial design services measured twice that of the national index. ID compensation in Vermont was 2.5 times greater than the national index. Oregon, too, is above average in both employment and compensation—with 1.81 and 1.59, respectively.

“Information from the ACPSA has been invaluable for understanding the role of arts and culture in our economy, demonstrating that the arts are indeed part of our everyday lives,” says NEA Chair Jane Chu. “Now with the new state data, state leaders have a powerful tool to assess and advance arts and culture for the benefit of all their residents."