With the UK’s recent mini budget plunging us all into economic turmoil, it got us pondering what it means for a small to medium business like ours and for the design industry in general.
While the economists and politicians battle it out over the effectiveness of the proposed strategies in the long run, we’re concerned how it will affect us in the near term.
If, like us, you’ve already cracked and put the central heating on, the energy bill cap for businesses (as well as consumers) will come as a welcome relief. The other benefit for businesses is the cancellation of the planned increase in corporation tax from 19 to 25 percent.
While those are the only immediate silver linings, research shows that design could be the key to unlocking increased economic prosperity around the country. Below are some of the highlights from the Design Council’s recent report into the Design Economy, which shows the essential role design plays in the broader UK economy.
The design economy grew at twice the rate of the UK economy
According to a recent study by the Design Council, the design economy contributed £97.4bn in GVA* to the UK economy in 2019. That works out at 4.9% of total UK GVA almost matching the value of the hospitality and real-estate sectors combined! The study reported that the design economy grew at twice the rate of the UK economy between 2010 and 2019.
The design economy is a major employer with 1.97 million people working in design – that’s one in twenty workers in the UK. Of these,1.62 million were designers at the time of the survey and 77% of designers work in non-design sectors such as finance, retail and construction. The report notes that early data from The Department for Digital, Culture, Media and Sport (DCMS) suggests that key design industries have shown resilience through the pandemic, whilst others, such as multidisciplinary design, have not.
Digital is the fastest-growing design sector
Digital design, which in this report refers to people working in roles such as user-experience design, website and app design, video-games design and other forms of digital production and publishing, is credited as one of the UK’s greatest exports. The largest and fastest growing design sector, it grew by 138% between 2010 and 2019, three times the rate of the UK’s digital sector. In 2019, digital design contributed £53.9bn in GVA, 2.7% of UK total GVA and it accounts for 866,000 jobs.
Over 460,000 jobs are in non-design sectors, demonstrating the high demand for digital designers across the economy. However, 85% of those working in digital design are male.
Design skills required for many important jobs
Design skills such as creative problem-solving, visualisation, and the use of design methods, are required for jobs ranging from civil engineering to electronics manufacturing. In 2019, design skills contributed an additional £179bn in GVA to the UK economy and were important to a further 2.5 million jobs beyond the design economy. The report calculates that when adding the contribution of design skills to the value of the design economy, design is worth £276bn (14% UK GVA) and supports 4.47 million jobs (one in every seven UK jobs).
Popularity of design qualifications in decline
It’s not all good news. The Design Council’s study shows that our design skills pipeline is at risk. Across the UK, entries to Design and Technology GCSE have fallen by 68%, a decline which has not been offset by increases in take-up of Art and Design GCSE.
This is a crucial career pipeline for designers, with seven in ten designers who were surveyed for the research possessing a design GCSE. It also showed that the design economy is becoming increasingly professionalised with 62% of designers now holding a degree, compared to 58% in 2016. Whilst this demonstrates that the design economy is a high-skilled workforce, there’s a need to diversify pathways into design.
More diversity needed
The design economy is still disproportionately male: 77% of designers identified as male in 2020 showing very little change since 2015. The report showed that designers who are female, from an ethnic minority (excluding white minorities) or have a disability are also under-represented at senior and managerial levels. This is skewed by the three largest sectors in the design economy. Only 19% of workers in architecture and the built environment, 12% of product and industrial design and 15% of digital design workers identify as female.
Design is one of the UK’s greatest exports
Design is one of the UK’s greatest exports and plays a key role in driving quality across all our export sectors. In 2019 it accounted for over £70bn in exports – one in every ten pounds from all UK exports. The design economy is a vital service export for the UK, worth £55.9bn GVA in 2019 and responsible for 18% of all UK service exports. This includes activities such as an architect being commissioned to design a building by an international firm, or a product designer designing a new piece of furniture for an overseas company.
Service exports from designers working in non-design sectors have grown 27% between 2017 and 2019, twice the rate of UK service exports as a whole. This demonstrates the important role design plays in driving value across the UK’s export sectors. Whilst exports have grown in the design economy as a whole between 2017 and 2019, especially looking at designers working in the wider economy, design industries have seen their exports slow significantly following the UK’s exit from the European Union. For example, key service exports within design industries such as product and industrial design (-85%) and architecture and the built environment (-26%) have seen severe contractions.
Whilst design continues to bring increasing value to UK exports across the economy, our world-leading exports from design industries and firms are at risk without supportive international trade agreements, intellectual property frameworks and immigration routes in place.
The Design Council is due to publish Part 2 this autumn, which will outline the policy and industry-led actions needed to maximise the value of design to the UK.
We look forward to hearing the recommendations so that we can do our bit to help the design industry thrive!
*GVA or Gross Value Add is a metric that measures the contribution of a corporate subsidiary, company, or municipality to an economy, producer, sector, or region.