Design Council
In the middle of an economic downturn, SMEs need all the help they can get to survive the tough times. But when revenues are falling it can be tempting to cut marketing budgets, to delay new product development and to reduce research in an effort to save money. But is this the best thing to do?
But Design Council research shows that design is an important tool that can help businesses survive a recession. And we have lots of case studies that show how an investment in design can be instrumental in turning the corner to renewed growth.
Our research shows that more than half of the UK’s businesses
- ... are looking to design their way out of downturn
Over half (54%) of the firms in our survey thought design would contribute to a large or great extent in helping maintain their competitive edge in the current economic climate.
- ... think design is more important now
Similarly, 53% thought that design had become more important in helping the firm to achieve its business objectives over the last three years.
- ... think design is integral to the economic performance of the UK
The same number agreed or strongly agreed that design is integral to the country’s future economic performance.
Read our case studies of companies of different sizes and from different sectors that have worked with designers to improve their performance during challenging conditions.
Castle Rock Brewery gets a professional image
Thistle hotels uses design to reposition itself in a changing market
McCain’s frozen food packaging tells a positive story
HMV rethinks the music store as buying habits change
Ian Macleod Distillers brings new customers into an ailing whisky market
In the face of growing competition from cheaper, and arguably as effective, imports, the 1920s engineering classic, the Anglepoise lamp, was stuck on the shelves of office equipment retailers. Under pressure from low-cost operations like IKEA, the company saw its market share shrink and its margins squeezed. So Anglepoise used design to reinvent its business.
By focusing on the strong name, the flawless product design and engineering credentials, Anglepoise capitalised on its assets and overhauled the entire business to become a premium priced, international, consumer product. Now new Anglepoise designs sell for five times as much as the older models and the company sells to premium priced design-oriented retailers rather than office catalogues.
Find out more about design at Anglepoise
Joe Ferry, Head of Design and Service Design at Virgin Atlantic Airways says: 'At the lowest ebb of recession, just after 2001, for the airline industry, cutbacks were being made very frequently. The majority of other airlines were stopping all investment in design. That’s exactly when we started ramping up our investment in design. We knew the market was going to come back, when it did we wanted to have the best product on the market, everything slotted into place. In 2003 we came back to the market with our new upper class suite, took the market by storm – it was a massive market share shift for us and we’ve never looked back.'
Find out more about how Virigin Atlantic Airways manages design
Independent research shows that companies that don't invest in growth, research and development during a recession are 2.5 times more likely to fail than those that do. But it can be difficult to find the money to invest in R&D when an economic downturn is tightening the purse strings. And our research shows that less than a quarter (23%) of frims are aware that R&D tax credits are available, with only one in five of those who are aware using it for design work or services.
R&D tax credits are the single biggest source of government support for businesses who want to invest in development projects, and this includes design projects. R&D tax credits are potentially available to any development project that requires the resolution of scientific or technological uncertainty, provided a company is spending more than £10,000 during the tax year.
To find out about what R&D tax credits can do for your company and how to claim R&D tax credits .
Find out if you can claim R&D tax relief through Business Link's interactive tool
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