"If creativity is the generation of new ideas, and innovation, as we say in our white paper Innovation Nation, is the successful exploitation of those ideas, then design is what links creativity and innovation. It's the process by which ideas become practical, attractive propositions for customers or users"
Leeds Met Hotel
09 September 2008
Given my background in Business I know how important this issue is and I would like to thank Yorkshire Forward for hosting us today. I'd like to begin these brief remarks about the importance of design with an observation from Steve Jobs - someone closely identified with the promotion and execution of great design through his many years at Apple, who are launching their new IPod nano today.
"In most people's vocabularies," Jobs has said, "design means veneer. It's interior decorating. It's the fabric of the curtains or the sofa. But to me, nothing could be further from the meaning of design. Design is the fundamental soul of a human-made creation, that ends up expressing itself in successive outer layers of the product or service."
Steve Jobs makes one compelling case for design. I want to make another. If creativity is the generation of new ideas, and innovation, as we say in our white paper Innovation Nation, is the successful exploitation of those ideas, then design is what links creativity and innovation. It's the process by which ideas become practical, attractive propositions for customers or users.
Wherever you find high-quality products and effective services, you also find good design. Which is why design is vital to a prosperous and well-organised Britain.
This was recognised back in the 1830s with the creation of the Select Committee on Arts and Manufactures, whose hearings led to the system of public art and design education in this country.
Towards the close of the Second World War, Churchill's National Government established the Council of Industrial Design - forerunner of the Design Council - to help British manufacturing back on its feet and boost British exports.
And in 2005, Sir George Cox's Review of Creativity in Business - commissioned by Gordon Brown as Chancellor - re-affirmed the importance of design in supporting our national competitiveness.
Today, we have a world-class, internationally-recognised design sector in this country. Employing over 185,000 people, and with an annual turnover of around £11.6 billion, it makes a substantial contribution to the economy.
But if we are to remain a force to be reckoned within the global marketplace,
UK companies must continue to develop new high-value products and services. That's an even greater priority during challenging economic conditions, with the credit crunch, high fuel prices, and the rising cost of living.
Investment in design is a necessity, not a luxury - for start-ups, for companies seeking to grow; for SMEs, for multinationals.
Design Council research shows that every £100 spent by business on design increases turnover by £225.
Indeed, companies that invest in design out-perform their peers in practically every performance measure - market share, growth, productivity, share price, profitability.
And yet, around 45 per cent of all UK companies are failing to invest in design, nearly half. Only 16 per cent believe that design is critical to their success. It means that that the UK registers fewer designs and trademarks with the World Intellectual Property Office per million of population than Denmark, Canada or South Korea.
With 1,600 new businesses starting every day in the UK, we must spread the message that good design is a key ingredient in their survival and longevity, not just for new but for existing business that want to thrive.
Today, the Design Council plays an important role inspiring and enabling the best use of design in this country. Not just in private business, but in the public services on which we all rely. Helping to improve healthcare provision for people with diabetes. Reducing street theft of must-have items like mp3 players and mobile phones. Working with hospitals to reduce incidence of MRSA and C.Difficile.
Equally, the Design Council - which receives funding from my department - is one of our key partners in delivering the Government's innovation agenda. I mention earlier our white paper which tells of new innovation not only in the private but in the public sector, and not only in science but in all areas. The Design Council is leading the effort in using design to tackle the major societal challenges we face, like climate change and an ageing population. It's helping us to increase the country's skills capacity in design - an area where we need to raise our game. South Korea, for example, has around 10 times as many design graduates as the UK per million of population, we can and must do better in this area in the future.
Together with Creative and Cultural Skills - the sector skills council for design - the Design Council is heavily involved in the forthcoming Design Skills Alliance. This new Alliance will concentrate on professional development for designers, anticipating future skills needs, and improving connections between practising designers and universities - to ensure our design sector can anticipate the shifting demands of the global economy.
And to achieve closer links between universities and SMEs, we've been creating multidisciplinary centres of excellence. The first of these, Design London, is a partnership between the Royal College of Art and the engineering and business schools of Imperial College. Later this year, the Centre for Competitiveness and Creative Design opens at Cranfield University. These are all good and positive developments.
But my main purpose this morning is to highlight the value of the Council's Designing Demand programme - whose purpose is to benefit the SMEs that comprise 99 per cent of all UK businesses, and represent the bedrock of our economy.
Designing Demand has been around in various guises for several years, but it was the Cox Review that highlighted the need for more UK companies to develop the creative faculties necessary to achieve long-term growth against a backdrop of fierce global competition.
In the wake of Cox, the Design Council has worked with the Regional Development Agencies to make Designing Demand available in six English regions - one of the reasons we are here today is that Yorkshire Forward is the first RDA to adopt it.
As a result, some 1,200 businesses around the country have already gone through the programme, helping to improve the performance of companies across a range of sectors - for manufacturers of household cleaning products, dyes and pigments; producers of fuel cells and eco-friendly cars; for firms engaged in heavy industry and nanotechnology. They've all profited from practical support to achieve greater returns through a more strategic approach to design.
Designing Demand helped Aga, located near my own West Midlands constituency, to boost its reputation for high-quality cookers by introducing new models and diversifying into cookware. Owlstone, a Cambridge-based start-up specialising in chemical detection technology, has learnt how to attract investors and speed up the process of product development.
And by re-branding and updating its product design and packaging, Taylor's Eye Witness - the Sheffield knife maker formerly known as Harrison Fisher - has enjoyed increased sales and gained a foothold in new markets, in what is an entirely competitive area.
I understand that you'll be hearing more about how Designing Demand has helped business later today - identifying overseas trading opportunities, securing venture capital and cutting time to market for their technology.
I should also mention that Designing Demand will be piloted in the public sector - as recommended in the Innovation White Paper - bringing the same insight to a broader range of organisations
But above all, it's one of my aims, as Minister for Innovation, to see Designing Demand available nationally. A review is currently underway, involving the Design Council and the RDAs, to see how we can improve and expand the programme on a sustainable, long-term basis.
My ambition is to reach a point where businesses routinely think of design from the moment of start up, and consider design through both periods of expansion and consolidation. A point where the head of any small company knows where to go for constructive advice on design.
In South Yorkshire alone, the average spend by SMEs on design projects increased from £2,000 to £14,000 between 2005 and 2007. This is really encouraging - something we must build on.
Only yesterday, the Government published an updated manufacturing strategy, whose purpose is to help companies and local economies get through the current global slowdown - and emerge stronger and out perform in the global economy.
Manufacturing is responsible for more than half of UK exports and some three million jobs, 70% of RND in this country. Productivity has grown by almost 50 per cent over the past decade, it is a very different sector from the one I entered as a venture capitalist and it is growing faster than in France, Germany and the US.
We want to protect those gains and prepare for the huge opportunities arising from the worldwide shift to a low-carbon economy. For example, in the UK alone, the environmental goods and services sector is projected to be worth £46 billion by 2015.
British excellence in production and assembly will undoubtedly remain sources of competitive advantage and the environmental good and services sector offers a real opportunity. But we must also exploit to the full our expertise in research and development, in logistics, and in design.
Which is why Designing Demand, the Design Skills Alliance - and plans to help British firms gain maximum value from their intellectual property - sit at the heart of the manufacturing strategy.
And the strategy is consistent, of course, with the wider agenda of the Department for Innovation, Universities and Skills. For our job is to build this country's skills base at every level; to fund our world-class universities and research base; and to harness the best of both to underpin an innovative and competitive economy.
I hope you take every opportunity today to consider how design can boost your bottom line, for your business and your clients business, and that you see design as an integral part of that business - and I thank you all for listening.
