Innovation and Design Use by Small Manufacturers

New NEA Report Takes a Closer Look at Advantages of Design in Business

Dec 11 2017 - 1:27pm

A new report by the National Endowment for the Arts entitled "Rural Arts, Design & Innovation in America: Research Findings from the Rural Establishment Innovation Survey (REIS)" helps make the case that design boosts business. The report's accompanying research brief, "Innovation and Design Use by Small Manufacturers," finds:

  • Business innovation rises sharply with design use. Among US small manufacturers that invest in design, 83.7 are substantive innovators, a designation of the REIS that recognizes businesses that encourage new practices and products.
  • Businesses that have fully integrated design within their practices report expanded offerings and access to new markets.
  • 80 percent of design-integrated businesses report growth in market share or having entered new markets. By contrast, 47 percent of businesses that do not systematically use design realized those outcomes.
  • 34 percent of design-integrated businesses recently have begun to export goods and services, compared with seven percent of businesses that do not systematically use design.
  • Among small manufacturers classified as design‐integrated, a large majority—83.7 percent—are of the REIS population representing 180,000, small, highly innovative manufacturers, nearly 36 percent are classified as substantive innovators. The share changes dramatically, however, once design use is taken into account. For example, among small manufacturers that were classified as using no systematic design, 12.8 percent are substantive innovators; among design‐last‐finish establishments, the share rises to 52.7 percent. 

Published by the NEA, the new report is based primarily on 2014 data from the US Department of Agriculture's Economic Research Service (ERS)'s Rural Establishment Innovation Survey which examines the type and breadth of innovation within rural businesses.