Is Business Eating Design?

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Originally published in Applied Arts Magazine, 2015

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Insourcing is the It Word for 2015. What does this mean for the state of the design industry?

On more than one occasion this column has been the vehicle of speculation on the trajectory of the design industry. The start of a new year seems like a suitable occasion for more.

Over the last decade, the design industry has been weakening. That is not the same as saying that design per se has been weakening, or that there aren’t still great design firms or stellar individual contributors. Quite the contrary. As a cultural, commercial and social phenomenon, design has never been bigger.

Every major newspaper has a design section, something that was unheard of a mere 15 years ago. There are more design courses and curricula available than ever before, whether certificate- to diploma- to degree-granting, from six months to six years in duration. And as a result, in cities like Boston, New York and Toronto, there are more certificate/diploma/degree-holding designers in the market than ever before.

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Design has been discovered (some long-time practitioners would say hijacked) by profit and non-profit organizations alike as a process that can be used to solve both commercial and socioeconomic problems hitherto considered well outside the capabilities of the traditional studio practice. Through the spread of design thinking, the process has been decoupled from its traditional product, allowing design to penetrate the operational walls of its client base and become an integral part of their value chains.

A recent article by Robert Fabricant (formerly of Frog Design) tracks the transformation described above. In it, he follows design from its 20th-century roots in the form of independent graphic and industrial studios, through the emergence of the digital shops in the nineties to the innovation shops of the noughties to the corporate insourcing we are seeing now. It’s actually rather startling to see how much of the latter has happened just in the last two years. Companies such as IBM, Capital One, GE, Fidelity, American Express, The World Bank and Citibank all have been busy building their own internal design teams. IBM’s design team alone numbers over 1,000 practitioners.

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Venture capital firms are in on the act, too. Perhaps the most emblematic example is John Maeda, who left his position as head of the Rhode Island School of Design to join Silicon Valley VC firm Kleiner Perkins Caufield & Byers. It’s a sign that venture capitalists are showing a preference for funding start-ups that have product designers as principals, such as Airbnb and Tumblr. It is a sign that they recognize the value that design can bring to business.

Fabricant himself has left Frog to set up a design practice within strategy and policy advisory Dalberg, a global firm that is focused on solving some of the world’s toughest socioeconomic problems in areas like agriculture and food security, energy and environment, humanitarian aid, gender empowerment and global health.

Design is transcending its traditional silos, and with a dwindling number of exceptions, becoming integrated with the client base it has traditionally served. One of the dreams of mature firms back in the ’90s was to be seen as strategic advisors to clients, not as mere window dressers “putting make-up on the ugly face of capitalism,” as was so colourfully put by Erik Spiekermann in a recent Design Observer article. That wish is coming true — but to realize the dream, design is leaving the studio behind for a seat at the boardroom table.

Is this a good thing? Can the culture of creativity and innovation that has traditionally been associated with the best independent firms survive the cultural inertia of large corporate organizations? Will the independent studios that survive this disruption need to be absolute best in class? Will the mid-range firms increasingly fall by the wayside, unable to compete for talent or contracts with either their best-in-class competitors or their clients’ in-house teams?

I believe these trends will continue, that the middle layers of the design industry will continue to be hollowed out, and that there will always be a need for top-notch, leading-edge boutiques. I’m not convinced that insourcing will result in more creative corporations, but I would love to be proven wrong about that. As a standalone industry, design is scaling back, but as a critical functional component of every other industry, it is expanding.

The 20th-century design industry is dead. Long live design in the 21st. wn