Design’s Return on Investment

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Looks like China is getting it when it comes to design.

In a recent interview on the local Chinese CCTV, Chen Dongliang, Director of the Beijing Industrial Design Center, has highlighted the tremendous economic value of Industrial Design to China’s economy.

The output value of industrial design in Beijing reached 80 billion yuan in 2008. Now around 250-thousand employees are working for nearly 20-thousand design companies in the city. Beijing is also expanding technology service and high-end manufacturing industries, both of them can help boost the industrial design sector.

That’s just in 2008! While the job definition of an Industrial Designer in China is pretty broad, even if we discount their statistics, it is still a lot of people and money.

What is more interesting is their next set of statistics.

The global financial crisis has made more and more companies realize that it’s not sustainable to depend on cheap and low-end products. They must think more about added value. The central government has also called for more attention on industrial design, pledging to change “Made in China” to “Invented in China”.

Chen said, “Industrial design is the key point of the value chain. Figures show that in Britain, 100 pounds of investment in design can yield 225 pounds of output. According to our survey, in China, one yuan investment could bring 13 yuan of output. This is on average. The contribution rates are different in different industries.”

Those are some impressive numbers! If we consider these statistics as ratios, we can get a good insight on the amount of value-add a design investment can give to a product.

In detail we have:

In the UK, Design’s output is $1 invested is to $2.25 British Pounds.

In China it is $1 to $13 Yuan.

Of cause these are averages and possibly skewed, and I believe when we start bringing in buying power and exchange rates the numbers start to change. Regardless, this is something to ponder about when you next have to convince a client if he or she should invest in design.

Anyone else have some good statistics on the how much ROI you can get from investing in design?

Image source: Sune P

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