Endelig Baggrund Eng

8/3/2019 Endelig Baggrund Eng

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The Danish Enterprise

and Construction

Authoritys Division for

Research and Analysis

Pernille Johansen, Tobias Lau, Casper

Hgenhaven and Jrgen Rosted

Background Report

Concept Design -

how to solve complex

challenges of our time

August

2007


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Pernille Johansen, Tobias Lau, Casper Hgenhaven

and Jrgen Rosted

Background report

Concept Design -

how to solve complex

challenges of our time


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Chapter 1

1.1

1.2

1.3

1.4

1.4.1

1.5

1.5.1

1.5.2

1.5.3

1.5.4

1.5.5

1.6

Chapter 2

2.1

2.2

2.3

2.3.1

2.3.2

2.3.3

2.3.4

2.4

2.4.1

2.4.2

2.4.3

2.5

Introduction 6

The Danish design industry 8

Background 8

Identifying/mapping relevant design companies 11

The Danish concept design companies 15

Concept design companies are witnessing significant growth 18

The largest export shares 20

Concept design company characteristics 21

Competences 21

Methods and tools 24

Client access 26

Network relations 27

Customer segment 28

Summary 29

Comparing leading Danish and international concept design companies 30

Mapping international concept design hubs 30

Size and location of international concept design regions 32

Point system 36

International survey 36

Criteria for concept design companies 37

Ranking concept design companies 38

Summary

Significant conditions for a concept design region 40

The needs of client companies 41

University structure 42

Network creation 43

Summary 46

Indholdsfortegnelse


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Strategies and competences in the concept design company 48

Developing a business strategy 48

The strategic concept design company 49

The design focused concept design company 52

The holistic concept design company 55

The work process in concept design companies 56

Using competences 56

Three competence combinations 57

Exploring collaborative opportunities 60

Industrial companies focus on concept design 60

Concept design creates solutions across industries 62

Summary 64

Representativity 66

Point system for selecting concept design companies 68

Typical work process in a concept design company 70

Chapter 3

3.1

3.1.1

3.1.2

3.1.3

3.1.4

3.2

3.2.1

3.3

3.3.1

3.3.2

3.4

Appendix A

Appendix B

Appendix C


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Introduction

is publication constitutes the background report to the book Concept De-

sign - How tol solve complex challenges of our time, which was published in

connection with the INDEX: AWARD in August of 2007 in Copenhagen.

e purpose of this background report is to map the growth potential of theDanish design industry. Is there a particular type of growth-oriented compa-

nies working with the combination of innovation and design? And if so what

characterises this type of company?

e analysis shows that the design industrys potential goes far beyond the

traditional focus on product design. Design is an important discipline to con-

cretise innovation and to create new products and services - this implies that

the companies increased focus on innovation has opened new opportunities

for the design industry.

It should be stressed that design cannot drive company innovation on its own.

Other industries including advertising and consulting use disciplines that are

important to the development of innovative solutions. Companies assisting

other companies with innovation must therefore work with tools from various

professional disciplines. ese are the companies referred to as concept design

companies throughout this study. Please refer to the main report: Concept

Design - how to solve complex challenges of our time for a precise descrip-

tion of the terms concept design and concept design companies.

As described in the main report concept design companies originate from a

range of businesses, most notably consulting, advertising and design. Concept

design companies are characterised by assisting other companies in innova-

tion through a combination of disciplines such as design, social science1 and

business2.

1) Social science covers competencs from the humanities and social styudies including et-

hnographic, anthropological studies and other types of qualitative studies.

2) Se chapter 3 for a review of the applied methods and competences required to carry out

concept design.


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is analysis focuses on concept design. is does not imply that classic pro-

duct design is not important. Product design is the cornerstone of Danish

design - and there is and always will be a demand for design in the traditional

sense of the word.

e fact that concept design is the focal point of this analysis can be ac-

credited to a set of emerging trends that are impacting not only the design in-

dustry but also other Danish companies that are demanding advisory services

on user needs and innovation.

e new trends are concentrated within two areas:

More and more, Danish design and consulting companies

are working with companies on new strategies and con-

cepts.

More and more Danish design and consulting companies

are working to strengthen other companies innovation

processes by applying design methods and tools.

Report structure

Chapter 1 highlights the general structure, size and importance of the Da-

nish design industry and maps the Danish concept design companies. e

chapter also introduces a point system for ranking indidivual companies interms of their ability to carry out concept design.

Chapter 2 maps and describes internationally leading concept design regions

asnd compares results from the Danish survey with the results from the inter-

national mapping. In continuation thereof the chapter compares the identi-

fied companies based on the system introduced in Chapter 1.

Chapter 3 describes a range of trends that impact concept design compni-

aes and their potential for growth. ese trends include choice of businessstrategy, how to combine concept design competences and finally how large

industrial companies are moving into concept design.


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is chapter highlights the general structure, size and importance of the

Danish design industry and maps the Danish concept design companies. e

chapter also introduces a point system for ranking indidivual companies in

terms of their ability to carry out concept design.

1.1 Backgrounde design industry has a profound impact on the Danish

self knowledge. Companies in other industries use design as a key competitive

parameter in the global competition - Danish design signals credibility and

quality.

In the report Danish design - good business3? the Danish Growth Fund

estimates annual turnover in the design industry at DKK 40 billion when

including turnover in the fashion and furniture industries. According to the

Growth Funds assessment turnover in the design industry surpasses that ofthe pharmaceutical industry, where 2005 annual turnover amounted to DKK

35 billion4.

In the report An Image of Danish design - Challenges and Perspectives the

Danish Authority for Enterprise and Construction (DAEC) draws a picture

of the Danish design industry. In the report design companies are defined

as companies registered under the industry codes 748.720 - Product design

and industrial design and 748.710 - Interior architects5. Companies that use

design as a key competitive parameter but which are not registered under thetwo industry codes are not included in the DAEC report.

An image of Danish design - challenges and perspectives shows significant

growth in the number of companies in the design industry as well as strong

continued growth in revenues, employment and exports.

From 1999 to 2004 turnover increased from DKK 1.8 billion to DKK 2.9 bil-

lion6. During the same period employment grew by roughly one-third from

The Danish design industryPart 1

3) The report can be downloaded at www.vaekstfonden.dk. 4) Source: Statistical Yearbook

- http://www.dst.dk/homedk/statistik/ags/statistiskaarbog.aspx. 5) In a company some activi-

ties wil results in a sale of products or services that yield revenue. The industry reflects the

activity that leads to the companys turnover. 6) Source: EBST in An Image of Danish Design

- Challenges and Perspectives (2007) based on data from Statistics Denmark .


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2 000 to 3 0007. e number of companies has grown from approximately

1 200 in 1995 to 3 800 in 2004.

e industry has also become more export oriented. Over a 10 year period

income from international clients rose from 15 percent in 1995 to 24 percent

in 20048.

However, the significant growth enjoyed by the design industry is not unique

in comparison with other industries providing similar services to businesses

(Figure 1.1).

e DAEC report shows that the design industry has undergone rapid de-

velopments in recent years. However, at the same time the report shows thatthe industry is faced with a key challenge.

e report shows that the design industry is characterised by a myriad of

small companies. Of the 4 500 design companies that existed in 2004 only 1

800 were active. In other words, more than half of the Danish design compa-

nies were inactive9 (Figure 1.2).

Figur 1.1

Percentage change in

revenue and employment

compared to the private

sector

1999 - 2004

7) See footnote 6.

8) See footnote 6.

9) According to Statistics Denmark a company must employ a years work of one person or

have a turnover of at least 135.000 DKK to be considered an active company.

Figur 1.2

Companies in the design

industry 1996-2005

Source: EBST (2007) based

on Statistics Denmark

-20

-10

0

10

20

30

40

50

60

70

-40 -20 0 20 40 60 80

Percentage change in revenue

Other advisory services (planning,control etc.)

Consulting engineers

Architects

Ad agenceis

Design

Overall private sectorPercentagechangeinemployment

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

1995

1996

1997 99 19

99

2000

2001

2002

2003

2004

2005

Total number of companies

Active companies

Numberofcompaniesinthedeisg

nindustry


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e myriad of small companies in the Danish design industry may be percei-

ved as a significant challenge - or a significant opportunity depending on your

point of view. e challenge lies in securing a layer of larger companies that

may attract revenues and employment to the industry. e opportunities of-

fered by small companies lie in them being catalysts for innovative thinking,

creativity and talent.

Concept design companies part of the Danish design industry?

e traditional Danish design industry as described in the DAEC report is a

growth industry both in terms of employment, revenues and exports. At the

same time the industry is dominated by a myriad of small companies that

contribute with idea generation and talent for the albeit low number of larger

companies.

In addition to the emerging trends in the traditional design industry we arewitnessing a novel and interesting trend. A range of Danish companies that

are not defined as product design companies but which work with design in a

broader context are entering the market.

is group of companies is characterised by mainly selling creative ideas,

skills and user needs insights to other companies, where design skills and

processes are critical elements in the production process together with social

science and business skills. is group of companies is referred to as concept

design companies through this report (Exhibit 1).

3) Rapporten kan downloades p www.vaekstfonden.dk. 4) Kilde: Statistisk rbog - http://

www.dst.dk/homedk /statistik/ags/statistiskaarbog.aspx. 5) I en virksomhed foregr nogle

aktiviteter, der resulterer i salg af et produkt eller en ydelse, som giver en omstning. Bran-

chekoden skal afspejle den aktivitet, der frer til virksomhedens omstning. 6) Kilde: EBST

i Et billede af dansk design - udfordringer og perspektiver (2007) p baggrund af Danmarks

Statistik: Regnskabsstatistikken (REGNR6 og REGNR7). 7) Som ovenfor. 8) Som ovenfor


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What is a concept design company??

Concept design companies work with the discipline of creating concepts.

A concept is a solution to a problem, a servic e or a combination of products and services

that have not been solved yet or which have been solved in an unsatisfactory manner.

New technology may be an important part of a new concept, but a concept may also be

built on new solutions based on existing technologies or on non-technological knowledge.

Concept design requires at least the different skills: social science, business and design

that are combined in a new manner.

Social science skills are necessary when observing user behaviour or uncovering user

needs.

Design skills are necessary when transforming new knowledge on user and market needs

into functional and aesthetics products and services. .

Business skills are necessary when mapping the concepts validity in the market subse-

quent consequences to the companys business model.

is chapter, which is part of the concept design analysis, focuses on the

group of Danish concept design companies. How many are there? Where do

they originate from? Are they seeing higher growth compared to traditional

design companies? What characterises Danish concept design companies?

1.2 Identifying/mapping relevant design companies

e purpose of the analysis is to take a closer look at the Danish design

companies - and to compare them to the more traditional Danish design

companies.

e first step in the analysis is to identify the companies that are to be part of

the study. It is our ambition to include all Danish companies working with

design and concept design - in the intersection covering design, business and

9) Iflge Danmarks Statistik skal en virksomhed enten have et halvt rsvrk eller en omst-

ning p over 135.000 kr. for at blive betragtet som en aktiv virksomhed.

Exhibit 1

What is a concept design

cmpany?

Business

Design Socialvidenskab

Konceptdesign


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social science.

A portion of the Danish companies in fact working with concept design are

not registered in the offi cial Danish business statistics (748.720 - product de-

sign and industrial design10). is implies that the identification of companies

cannot be based on existing statistics but must be collected through alterna-

tive methods.

In this analysis we have chosen to identify relevant companies using the snow-

ball method. e method consists of three phases.

Phase 1: Definition of relevant design companies

To identify the relevant companies requires a precise and operational defini-

tion. To include both design companies and concept design companies the

company should meet at least one of the following three operational criteria:

e company sells products and prototypes, where design

competences and processes are vital elements in the pro-

cess.

e company sells services, creative ideas and competen-

ces, where design competences and processes are vital ele-

ments in the process.

e company sells new insights into user needs, which

contribute to change processes and innovation, where so-

cial science competences, business competences and de-

sign competences and processes are decisive elements in

the process.

Phase 2: Preliminary interviews with key knowledge individuals

During the early phases of the analysis an inspirational committee was set-up

covering prolific Danish design experts. e inspiration committee was askedon their knowledge of interesting companies in the design area. Furthermore,

they were asked on their knowledge of other key individuals and experts in

the design area.

In addition to the companies, knowledge individuals identified by the inspira-

tion committee we have contacted 20 companies and knowledge individuals

in the design area. ose companies and knowledge individuals were asked

on their knowledge of companies and key individuals.

10) For more information on the brekadown of companies check www.dst.dk


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Phase 3: Electronic snowball

An exhaustive list of interesting companies and key individuals was drafted

based on input from the inspirational committee as well as conversations with

other companies and key individuals. e list formed the platform for the

electronic snowball, which is briefly described in Exhibit 1.2.

The snowball method is used to identify actors in a population or network who are not im-

mediately accessible through quantitative approaches such as business statistics or com-

modity codes. The snowball process can be divided into three stages:

1. The snowball is launched by asking a number of design industry experts and key players

about their knowledge of companies that meet one or more of the three cri teria listed above.

These people are also asked if they know of any other experts or key knowledge indiv iduals

who may have knowledge of these companies.

2. The snowball continues by sending new questionnaires to those experts identifi ed by the

key knowledge individuals and companies identified during stage 1.

3. The snowball continues until it is determined that all interesting companies have been

referred to.

Snowball recipients were presented with 1) a list of companies and key indi-

viduals in the design area and 2) a description of the three criteria defining

relevant design companies for the purpose of this analysis.

e recipients were then asked to answer the following questions:

Can you think of additional companies in the design area which should beadded to the company list? Did you find companies that should not be on the

list?

Can you think of any key individuals that should be added to the list?

As new responses come in the gross list is revised, and the questionnaire is for-

warded to the new companies and key individuals. e snowball continued

among Danish companies and knowledge individuals until it was assessed

that all interesting companies had been identified.

e snowball rolled for 3 months and we experienced a maximum of 3-4 days

between replies. 287 companies meeting at least one of the three criteria were

identified.

Some 100 individuals participated in the process.

To ensure that the 287 companies provide an adequate image of the Danish

Exhibit 1

What is a snowball


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design companies and concept design companies the final list of companies

has been checked among members of the inspirational committee.

At the same time it has been tested to which extent the identified design

companies provide a representative image of the traditional design industry.

e test shows that between 92 and 100 percent of the design companies

with more than 5 employees has been identified in the snowball11. ere is

no guarantee that all design companies have been identified; however, we feel

confident that the traditional design industry is covered by the analysis.

Collectively, it is the assessment that the most important Danish stakeholders

have been identified.

The Survey

A survey was forwarded to the 287 identified companies in the extended de-sign field. 145 companies responded, corresponding to a 51 response rate12.

e results from the survey were primarily used to 1) identify the design

companies that perceive themselves as working with and selling concept de-

sign and 2) to qualify these answers in light of the fact that companies may

have different perceptions of the term concept design.

It has been tested if the incoming answers were representative for the col-

lective population of design companies. Of the 287 identified companies 132originated from traditional design industry. Of the 132 companies 52 percent

responded. Representativity was tested by comparing the distribution of size

with the distribution of design companies in the offi cial business statistics.

At the same time we have tested if the 145 companies that have answered the

questionnaire are distributed in a manner similar to the one found among the

287 identified companies (Appendix A).

e study finds that the survey is representative for the group of design anddesign related companies that are the focus of this analysis.

Finally, it should be stressed that only companies with 3 or more employees

that have been selected for this analysis. Hence, 4 000 companies have been

omitted from the analysis.

ere are two reasons why we have chosen to focus on companies of a certain

size. First of all the very small companies do not have a global orientation

11) See Appendix A

12) Clothing companies, manufacturing companies and interior architects have been removed

from the analysis due to limited responce rates.


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found among larger companies. Secondly, concept design is characterised as

being of such a size that companies can draw on a range of competences and

disciplines.

1.3 The Danish concept design companies

In the survey companies were ask to state which services they sell. 58 of the

145 companies reported selling concept design. At the same time the survey

shows that 21 percent of total revenues can be accredited to concept design.

is makes concept design the largest source of income for the design compa-

nies included in the survey.

Graphic design, communication design and Digital and multimedie design con-

stitute between 15 and 17 percent of total revenues, while Product and indu-

strial design, Interior and exhibition design and Otherclaim between 9 and 11

percent of total turnover among participating companies (Figure 1.3).

e fact that some 58 companies have stated that they sell concept design is

quite surprising. It could imply that a range of Danish companies are working

with new methods in uncovering user needs and developing innovation in co-

operation with companies; however, the fact that concept design is a relatively

new phenomenon may have led to different interpretations of the term.

is analysis offers a precise description of concept design based on a range of

characteristics, which describes the companies use of methods, competences

and relationships. To qualify the incoming answers a point system has been

organised. e question remains whether the companies stating that they sell

concept design are in fact working with concept design as defined throughout

this analysis.

e 58 companies stating that they sell concept design have been rated on the

Figur 1.3

Distribution of total rev-

enues in selected product

areas

Note: As a starting point,

companies in the fashion

industry were part of the

analysis. Some fashion com-

panies have participated in

the survey and have stated

that they work with concept

design. However, due to the

limited number of respond-

ents we have chosen to

omit fashion design from the

analysis

Note: The question asked

how large a share of total

revenues were generated in

the following categories

Product and industrial design

11%

Graphic design

17%

10%

16%

Concept design

21%

Other

9%

Communication design

16%

Interiror and exhibition design

Digital and multimedia design


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11 criteria that make up the point system. e point system evaluates each

companys ability to work with concept design.

e point system is based on the companies responses to the survey. Among

other things they have answered questions related to the competences and

methods applied, the level of client contacts and participation in networking

relations with other companies. In other words the exact same areas that cha-

racterise concept design throughout the analysis. In the point system the 58

companies are evaluated by 4 dimensions:

Competences a high score is given to companies that frequently apply the

competences that are necessary when working with concept design.

Methods and tools a high score is given to companies that frequently apply

competences from humanities and social, economics and business economics,as the application of methods and tools from these disciplines are important

for the ability to work with concept design.

Customer contact For concept design companies it is often important to

involve the clients top management and innovation department. us a high

score is accredited if the design company is working with the top manage-

ment and/or innovation departments. On the other hand, a low or no score is

given to design companies working with client departments that are further

away from the strategic decision making.

Network activity the use of different disciplines is an important part of con-

cept design; therefore, concept design companies are required to work with

other companies and knowledge institutions. Network activities will there-

fore yield a high score.

e maximum score is 55 points. None of the 58 companies scored 55 points,

but a number of companies were given a solid score (Table 1.1).

Point score Number of companies

0-10 4

11-20 20

21-30 10

31-40 18

41-50 6

51-55 0

Total 58

Table 1.1

Company rankings in the

point system


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To qualify the incoming answers we have set a limit (38 points) for a company

to be regarded as with concept design on a high professional level.

Further information on the point system is found in Appendix B.

38 points is the minimum number of points that may be achieved if a company

can be regarded as fulfilling the 4 dimensions. In practical terms the company

will have to answer 1) to a significant extent or to a very significant extent

in terms of using the necessary methods and competences for working with

concept design, 2) that they regard the same competences and methods as

being very or extremely important, 3) that to some extent, to a significant

extent or to a very significant extent the company is working with the cli-

ents strategy or innovation department/corporate development/top manage-

ment/consumer insights department and 4) that the companies often, to a

significant extent or to a very significant extent participate in networkingactivities with other stakeholders.

10 Danish concept design companies scored 38 points or higher. 14 compa-

nies received between 31 and 38 points, and thus lie close to the leading con-

cept design companies. e Danish concept design companies originate from

a variety of industries. Even though concept design companies use knowledge

and competences from design, social science and business and therefore can

be originate naturally from consulting and design there are Danish concept

design companies originating from other industries, including software de-velopment, architecture or measuring and technical analysis.

7 of the 10 identified Danish concept design companies originated from in-

dustries outside the design world (Table 1.2).

Industry Code Industry Number of concept de-

sign companies

748720 Formgivning og industrielt design 3

744010 Reklamebureauvirksomhed 2

742040 Arkitektvirksomhed 2

741490 Virksomhedsrdgivning undtagen

landbrugskonsulentvirksomhed

1

743090 Anden mling og teknisk analyse 1

722200 Udvikli ng af kundespecifi kt sof twar e

og konsulentbistand i forbindelse med

software

1

Table 1.2

Where do concept design

companies originate from?


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e interdisciplinary approach taken by concept design companies thus im-

plies that the companies do not necessarily originate from the design industry.

At the same time it could indicate that companies from various industries

have opened their eyes to the possibilities that lie in combining design compe-

tences from the humanities, social science, business and other related areas.

It also implies that the Danish design is crossing professional boundaries be-

coming in essence an element in various business sectors across Denmark.

1.4 Concept design companies are witnessing significant

growth

As shown in section 1.2 the traditional design industry has benefitted from

the booming Danish economy. Hence, it could be interesting to see if Danish

concept design companies have seen similar growth. Of the 145 partcipating

companies, 71 have provided information on revenues, employment and ex-ports. All of the concept design and a representative share of the other compa-

nies provided financial information.

From 2002 to 2006 average growth among Danish concept design compa-

nies was 14 percentage points higher compared to growth among traditional

design companies. During the same period average annual growth in employ-

ment was 7 percentage points higher and growth in turnover per employee

was 6 percentage points higher (Figure 1.4).

While differences in growth rates are rather obvious they should be treated

with some caution as the data material is limited. It has therefore been tested

to see if there are any solid differences in growth rates; the test shows signifi-

cant differences (Exhibit 1.3).

Figur 1.4

Average growth rate kin

percentage for revenue,

employment and revenue

per employee 2002 - 2006

Note: Concept design com-

panies (n=5) and the rest

(n=43).

Note: One of the concept

design companies has been

removed from the figure,

due to radical changes in

the companys business

strategy.

31

25

5

17

18

-1

-5

0

5

10

15

20

25

30

35

Revenue Employment Revenue per employee

Concept design

Design companies


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To test if the growth rates for concept design and design companies are significantly different a t-test isconducted. the zero hypothesis is tested against the alternative-hypothesis, which states that the growthrate for concept design companies is higher than the growth rate for design companies.

If the zero-hypothesis cannot be rejected it implies that the difference in growth rates is the result of arandom variation in the samples. An therefore there will no reason to assume that the two grow th ratesare significantly different.

If the zero-hypothesis is rejected and the alternative hypothesis is accepted it implies that differences ingrowth rates are significantly dif ferent.

We initially test at the 5 percent level. If the zero-hypothesis cannot be rejected we test at the 10 percentlevel. This is acceptable due to the limited amount of data

Old companies (5 years or more)

Group Number Average annual growth

Variance

Concept design 5 48,46 589,28

Design companies 43 23,67 415,83

Test for identical variance

The critical value ,

H0

cannot be rejected at a 5 percent level; hence it cannot be ruled out that the two variances areidentical.

The common variance:

As it is assumed that the two variances are identical, the hypothesis is tested through a t-test.

The critical value

Since 2,43 > 1,679 H0

is rejected at the 5 percent level; i.e. the hypothesis on similar mean values andthe alternative hypothesisof higher growth rates is accepted

One company has been omitted from the analysis, as it has undergone extraordinary changes.

Exhibit 1.3

Significance test

( )2

Koncept

2

Resten

589,281, 1 1, 42

415,83

SV F n m V

S= = =

2 2 2 2

0 Resten Koncept Resten Koncept: , :

AH H=

( ) ( )0,975 5 1, 43 1 4, 42 3,11F F= = = .

( ) ( ) ( ) ( )2 2Koncept Resten2 21 1 5 1 589,28 43 1 415,83 467,072 5 43 2

n S m S S S

n m

+ + = = =

+ +

( )( )

( )248,46 23,67, T t - 2 2,43

1 1 1 1467,075 43

X YT n m T

Sn m

= + = =

+ +

.

0 R esten Koncept Koncept Resten: , : .

AH H= >

( ) ( ) ( )0,95 2 5 43 2 45 1,679t n m t t = + + = .


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e established concept design companies thus have a significantly higher

growth compared to the traditional design companies. e question then re-

mains; is this a trend seen also among the newly established companies.

According to the survey 4 concept design companies and 23 other design

companies were established in the past 5 years13.

Except for one concept design companies, which has seen significantly higher

revenues, the newly established concept design companies and newly establis-

hed traditional design companies have seen similar revenues in the final year

(Figure 1.5).

1.4.1 The largest export shares

Globalisation opens a huge window of opportunity for Danish design and

concept design companies. A stronger customer base will lay the ground for

stronger revenues, higher employment and the opportunity for companies to

specialise in certain areas.

But globalisation also represents a major challenge to the Danish design and

concept design companies that are feeling the pressure from internationalcompanies looking to enter the Danish market. Already today we are wit-

nessing strong competition from leading international design and consulting

companies.

All this means that the Danish concept design companies increasingly turn

towards the global market. In 2006 the average export share was 7 percent

higher than the export share of traditional design companies (Figure 1.6).

13) It shouldbe stressed that we have only included companies with 3 or more employees.

Figure 1.5

Revenue (in million DKK)

in latest year for compa-

nies that are less than 5

years old.

4

1

35

0

5 5

9

7

0

5

10

15

20

25

30

35

40

4 years 3 years 2 years 1 year

Concept design

Rest


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1.5 Concept design company characteristics

Concept design companies are defined as companies that in material ways

differ from traditional design companies in terms of the choice of competen-ces and methods, client contact points and network relations.

e survey investigates a number of different areas in relation to the companys

use of competences, methods, tools and relations, but also in relation to the

companies assessment of the importance of the various areas.

In the following section each of the key areas - competences, methods, client

relations, networks, employee composition and customer segment - and dif-

ferences between concept design companies and traditional design companiesare illustrated.

1.5.1 Competences

Application of skills

By definition concept design companies focus on competences to uncover the

market and user needs. High-priority competences include data collection on

market and users, data interpretation skills and skills in developing concepts

based on user demand. All of the identified concept design companies have

answered to a significant extent or to a very significant extent in terms ofusing the abovementioned competences.

Only between 43 and 68 percent of the traditional design companies reply

that to a significant extent or to a very significant extent they are using

competences for collecting, interpreting and applying data on markets and

customers in developing new concepts (Figure 1.7).

Figure 1.6

Average export share in

percentage of total rev-

enues for concept design

companuies and design

companies (2006).

Note: Concept design com-

panies (n=10) and the rest

(n=62)

.

23

16

77

84

0 20 40 60 80 100 120

Concept design

Design companies

Export

Domestic market


22/75

22

Concept design companies also stand out in terms of testing customer reacti-ons to new products and concepts. 70 percent of the concept design compa-

nies apply this competence to a significant extent or to a very significant

extent. Among the traditional design companies the share is 47 percent.

On the other hand, traditional design companies are more frequent user of

product design competences compared to concept design companies. 83 per-

cent of the design companies state that to a significant extent or to a very

significant extent they are using product design competences, while only 60

percent of the concept design companies are using product design competen-ces. is serves to underline the hypothesis that traditional design companies

have a strong focus on product design.

In general, concept design companies tend to use more competences compa-

red to traditional design companies. With the exception of product design

competences the concept design companies are more frequent users of all of

the competences included in the survey.

e importance of skillsFurther to the companies assessment of the extent to which they use various

competences, the companies have been to rate the importance of the various

competences five years from now.

All of the concept design companies offer the assessment that competences

used to collect user data, to interpret data on user data and to apply user

knowledge to develop new products as well as competences for testing user

Figure 1.7

Applied competences in

concept design compa-

nies and design compa-

nies

72%

39%

24%

22%

21%

43%

21%

56%

37%

60%

60%

80%

100%

100%

100%

70%

70%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Product design

Technological competences

Competnces in surveying the clientscurrent and potential markets

Competences in collecting

data on user behaviour

Competences in interpreting userdata (pattern recognition)

Competences to apply userknowledge to create new concepts

Competences to test user reactionsto new products/concepts

Competences to work with other

professional groups

Other competences

Percent

Design companies

Concept design


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23

reactions to new products/concepts also will be important, very impor-

tant or extremely important five years from now.

e traditional design companies are also sharpening their focus on user and

market needs in the coming years. While only half of the traditional design

companies often, to a significant extent or to a very significant extent

use these competences today between 79 and 97 percent of those companies

expect these competences to be important, very important or extremely

important five years from now (Figure 1.8).

Evidence suggest that a growing share of companies in the design world will

focus on skills related to user and market needs, thereby following the exampleof concept design companies.

Employee composition

e fact that concept design companies focus on a wide range of competen-

ces implies that concept design companies have more professional disciplines

employed compared to the residual group of participating companies.

Of course the majority of the concept design companies has employees with

a design background. However, an equal share of companies has employeeswith a background from humanities and social science, while 80 percent of

the concept design companies have employees from economics and business

economics.

e majority of the traditional design companies have employees with a de-

sign background, while only 40 to 60 percent have employees with a back-

ground in other competence areas (Figure 1.9).

Figure 1.8

Share of participating

Danish companies that

assess the following

competencese as being

important five years from

now.

14) It should be stressed that only companies with 3 or more employees are included.

86%

77%

84%

79%

97%

79%

86%

48%

50%

70%

100%

100%

100%

100%

100%

80%

70%

83%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Design companies

Concept design

Product design

Technological competences

Competnces in surveying the clients

current and potential markets

Competences in collecting

data on user behaviour

Competences in interpreting userdata (pattern recognition)

Competences to apply user

knowledge to create new concepts

Competences to test user reactions

to new products/concepts

Competences to work with other

professional groups

Other competences


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24

1.5.2 Methods and tools

e use of methods and toolsPer definition concept design companies differ from traditional design compa-

nies by more frequently using skills from humanities, social science, market

economics, economics and business economics. Traditional design companies

primarily focus on design and intuitive methods.

All of the concept design companies have replied to a significant extent or

to a very significant extent in terms of using methods and tools from the hu-

manities and from social science, while 90 percent state that they use methods

from market economics, economics and business economics.

Among the traditional design companies more than 90 percent state that to a

significant extent or to a very significant extent they are using methods and

tools from design and intuitive methods. Other methods do not appear as

widespread among the traditional design companies. Only 40 percent of the

traditional design companies state that to a significant extent or to a very

significant extent they use methods and tools from the humanities, social

science, market economics, economics and business economics (Figure 1.10).

Figure 1.9

Composition of labour

90%

60%

90%

80%

96%

42% 42%

61%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

Design Natural science Humanities andsocial science

(Excluding economics)

Economics and business economics

Concept design

Design companies


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25

e importance of methods and tools

When companies are asked to rate the importance of the various methods

and tolls, the concept design companies maintain a strong focus on met-

hods from multiple professional disciplines, whereas the traditional design

companies first and foremost focus on tools and methods related to design

and intuitive methods.

All of the concept design companies rate methods and tools from the huma-

nities and social science as being important, very important or extremelyimportant. 90 percent regard methods and tools from market economics,

economics and business economics as important, very important and

extremely important. Also, methods and tools from design and intuitive

methods are regarded as being important among most of the concept design

companies.

Among traditional design companies methods and tool from design and in-

tuitive methods are regarded as the most important; 90 percent of the design

companies state that methods and tools from design and intuitive methodsare important, very important or extremely (Figure 1.11).

Figure 1.10

Share of participating Dan-

ish companies that use the

following methods to a

large extent or to a very

large extent.

60%

20%

90%

100%

70%

60%

50%

82%

18%

9%

19%

12%

76%

31%

0%

20%

40%

60%

80%

100%

120%

From design From natural science From market economics From the humanit ies

and social science


From economics

and business econ.

In tu iti ve me th od s Ot he r m eth od s

Konceptdesign

Designvirksomheder


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26

e results point to a stronger focus among design companies on the impor-tance of methods and tools from the humanities and social science, market

economics, economics and business economics. 68 percent of the traditional

design companies state that methods and tools from the humanities and so-

cial science are important, very important or extremely important.

1.5.3 Client access

Concept design companies often maintain a broad focus on the development

of concepts and strategies based on innovation and new thinking. is im-

plies that client access must take place at variuos stages and that there is accessto client decisions through the management team of the strategy/innovation

departments.

90 percent of the concept design companies reply that often, very often

or every time they work with their clients strategy and innovation depart-

ments. e share among concept design companies is between 60 to 70 per-

cent.

To the traditional design company the clients marketing department is thekey collaborative partner. 92 percent of the traditional design companies

state they work often, very often or every time with the clients market-

ing departments. 71 percent of the traditional design companies work with

their clients strategy and innovation departments, while 60 percent often,

very often or every time work with the clients design department (Figure

1.12).

Figure 1.11


Danish companies that

assesses the following

methods and tools as

being important, very

important or extremely

important.

80%

30%

90%

100%

90%

70% 70%

96%

44%

53%

68%

57%

94%

41%

0%

20%

40%

60%

80%

100%

120%

Procent

Konceptdesign

Designvirksomheder

From design From natural science From market economics From the humanit ies

and social science


From economics

and business econ.

I ntu it iv e m eth od s O th er me th ods


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27

At the same time, the figure shows that concept design companies have mul-

tiple entry points compared to traditional design companies.

1.5.4 Network relations

Networks may be very important to the companys knowledge and compe-

tence building, especially across knowledge intensive business sectors. For

concept design companies working with multiple competences network activ-

ity is important; especially if the company does not possess all the necessary

competences.

e study shows that Danish concept design companies do not engage inengage more often than traditional design companies. Concept design com-

panies are more active in networks covering educational institutions and

relevant professional organisations. On the other hand, traditional design

companies maintain stronger contacts with companies from other business

sectors (Figure 1.13).

Figure 1.12


companies assessing that

they frequently, very

frequently og whenever

possible sell products

and services to the follow-

ing departments.

93%

57%

55%

30%

4%

30%

15%

72%

70%

60%

50%

40%

10%

60%

60%

90%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Marketing

Design

Communication/HR

Manufacturing

Logistics and transportation

R&D

Consumer insights

Strategy or innovation department

Concept design

Design companies

50% 50%

70%

50%

70%

57%

73%

45%

36%

73%

0,0%

10,0%

20,0%

30,0%

40,0%

50,0%

60,0%

70,0%

80,0%

Other design companies Companies from other

industries

Education Organisations Individual experts

Concept design

Design companies

Figur 1.13

Share of companeis that

often, to a large extent

or to a very large extent

participate in networks

with the following players.


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28

1.5.5 Customer segment

Often design companies will depend on industries in the surrounding com-

munity. For example, the car industry is an important customer business for

the LA/San Diego design industry in Southern California, while the electron-

ics industry is an important customer to Tokyos design companies.

e question remains whether Danish design companies are depending on

specific business sectors and whether there are differences between concept

design companies and traditional design companies in terms of their depend-

ence of various business sectors.

e Danish concept design companies and traditional design companies do

not appear to be dependent on one particular business sector, but are rather

spreading their activities across multiple sectors. At the same time the study

shows that Danish design companies work for a greater variety of businesssectors compared to traditional design companies. Finally, more concept de-

sign companies are working with knowledge intensive sectors including phar-

maceuticals, the public sector and the telecommunication industry (Figure

1.14).

1.6 Conclusione chapter focuses on the larger traditional design companies and concept

design companies i Denmark. e survey identifies the companies in the ex-

tended design area which have seen the most significant growth in the past

five years, as well as common characteristics among growth companies in the

extended design area. Results can be summed in three headlines:

Concept design companies are showing impressive growth rates

Concept design companies constitute a significant growth layer in the Danish

Figur 1.14

Share of concept design

companeis and design

companies that have

customers in the following

industries.

33%

34%

37%

21%

22%

31%

19%

24%

54%

28%

18%

19%

40%

50%

40%

40%

20%

30%

70%

10%

20%

70%

0%

50%

20%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Retail

Consumer goods

Business service

Trade and transportation

Machinery

Pharmaceutical

Fashion

Furniture

Public sector

Private consumers

Telecomm.

The company is a subcontractor to other design companies

Other industries

Concept design

Design companies


29/75

29

design industry. When comparing concept design companies with the tradi-

tional design companies we see a strong trend; concept design companies are

seeing the strong annual growth in both revenues and employment.

At the same time, concept design companies continue to more export orient-

ed compared to the residual group of companies. Concept design companies

claim a larger share of revenues on markets outside Denmark compared to the

rest of the companies in the survey.

Concpet design companies originate from a number of different business

sectors

Many concept design companies do not have a background in design, but

originate from other businesses such as advertising, consulting or architec-

ture. Concept design companies that come from outside the design world

have seen the opportunities present in the market.

e survey shows that concept design is an important growth layer in the ex-

tended design world that may create growth and companies of a size that may

change the structure of the Danish design world thereby boosting revenues

and profits in the industry.

Concept design companies maintain a multidisciplinary approach

Concept design companies more frequently use methods and techniques in

collecting and interpreting data on market and user needs compared to tra-ditional design companies. Concept design companies have a larger share of

employees with a background in the humanities, social science, market eco-

nomics and business economics.

e rest of the companies participating in the survey primarily use compe-

tences form design and intuitive methods; methods also regarded highly by

concept design companies.

At the same time concept design companies differentiate themselves from theother companies by addressing other departments within the client company.

Concept design companies often work with innovation departments, R&D

departments and consumer insight departments, where as the residual group

of companies primarily work with design and marketing departments.


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30

is chapter maps and describes internationally leading concept design re-

gions asnd compares results from the Danish survey with the results from

the international mapping. In continuation thereof the chapter compares the

identified companies based on the system introduced in Chapter 1.

2.1 Mapping international concept design hubs

e mapping of the leading international concept design companies and re-

gions is based on a comprehensive qualitative survey. As a starting point, we

have used the same method to collect international data which was used when

collecting the Danish data. However, collecting data for all the design com-

panies in the world has not been possible. erefore, the international seg-

ment of this study focuses exclusively on concept design companies.

As stated earlier concept design is a relatively new phenomenon. is impliesthat there is no international standard for how to define a concept design

company and there is only limited hard data available to be used in an inter-

national analysis of the concept design world. Existing data only covers the

traditional design industry and therefore omits a significant portion of the

concept design companies.

It is not possible based on existing data to get an overview of the number of

concept design companies on a global scale.

Hence, it has been necessary to construct new qualitative and quantitative

data.

e qualitative part described in detail below has been applied in mapping

internationally leading concept design companies and concept design regions.

e quantitative part is built on a survey and details the identified companies

prerequisites for carrying out concept design on a high professional level.

e international qualitative mapping is carried out in 6 phases:

Mapping Danish and international

champions in the concept design

industry

Del 2


31/75


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32

e most significant challenge in terms of the international mapping of lead-

ing concept design companies lies in the successful roll-out of the snowball

across all of the identified concept design regions.

e snowball was satisfactorily rolled out in the Danish part of the analysis.

is is due to the nature of the close contacts maintained to key individuals

in the industry. We have not been able to establish close contacts to interna-

tional concept design regions. In San Francisco, London and the Netherlands

local knowledge individuals were involved securing satisfactory results. In

the remaining regions - New York, Chicago, Boston and Munich-Stuttgart-

Nurnberg the international snowballs have quickly died out.

It has therefore been necessary to use alternative methods to secure a satisfac-

tory international mapping of concept design companies. Among other things,

the leading concept design companies and knowledge individuals were askedto audit and finalise the list of concept design companies that were identified

through the electronic snowball.

Based on the large number of concept design companies and key knowledge

individuals that have participated in the audit of the mapping it is our assess-

ment that the largest and most important concept design companies have

been identified. Concept design companies in particular have a strong image

of the competitors within and outside the region. erefore, we assume that

all15

of the large international frontrunners in the concept design world havebeen mapped in the audit process.

In terms of the smaller concept design companies the picture is somewhat

blurred. Even though in theory the snowball should map all concept design

companies it is diffi cult to state that this is also the case for the small or me-

dium sized businesses. Since concept design is a relatively new phenomenon

it cannot be ruled out the small or medium sized companies with a potential

for concept design will surface.

2.2. Size and location of international concept design regi-

ons

e international mapping points to a number of concept design regions: the

San Francisco/Bay Area, New York, London, Boston, Chicago, Los Angeles,

Munich-Stuttgart-Nrnberg, e Netherlands and Denmark. e interna-

tional mapping also provides an overview of the number of concept design

companies (Figure 2.1).

15) In the following section we operate with a limit of 40 employees or more for large concept

design companies and less than 40 employees for small-medium sized businesses.


33/75


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34

New York (9), San Francisco (8) and London (8) have the highest concen-

tration of concept design companies with more than 40 employees. In that

respect Denmark is well positioned against the top-performing regions.

Only a handful of companies have more than 100 employees.

Among the larger concept design companies there is a widespread notion that

70-80 is the optimal employee number. is number provides the company

with the potential to solve the more demanding concept projects, while at the

same time allowing the company to maintain its uniqueness.

e capability to solve complex concept problems does not appear to be con-

tingent upon company size. Concept design is a very special offering that

requires high levels of professional ability, but it also requires intuition andthus very person-specific competences. ere are a lot of smaller companies

solving complex concept design challenges for some of the worlds largest

companies.

e origin of concept design companies

In addition to analysing the number and size of concept design companies

it seems relevant to investigate the origin of concept design companies. is

may provide us with an image as to whether the region is self suffi cient in

terms of concept design companies or if the region depends on international

concept design companies locating in the region.

If we focus exclusively on companies that originate from their respective re-

gions Denmark posts a solid ranking.

In the United States San Francisco has fostered concept design companies

and 9 branches from other regions. New York is home to 13 concept design

companies from the region and 11 branches from other regions (Figure 2.3)

Figur 2.2

Concept design compa-

nies with over 40 employ-

ees

1514

11

668

38

22

9

4

4

4


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35

roughout Europe London and Denmark have fostered the largest number

of concept design companies (10) originating from the regions in which the

companies are located. It is striking that all of the Danish concept design

companies have originated from the region, and that there are no foreign

branches in Denmark (Table 2.1).

Number of

companies

Companies with

a minimum of 40

employees

Companies originat-

ing from the region

San Francisco 30 8 21

New York 24 9 13

London 17 8 10

Chicago 11 2 7

Denmark 10 3 10

Boston 10 4 8

LA 8 4 5

Munich 7 2 0

The Netherlands 4 4 4

e fact that there are no international concept design companies in Den-

mark may be regarded as positive or negative depending on your point of

view. On the one hand Denmark is well positioned against the international

concept design regions despite the lack of interest from international conceptdesign companies. In other words, Denmark has singled handily been able to

foster a booming concept design culture.

On the other hand, one should contemplate why it remains less than attrac-

tive for international concept design companies to open branches in Den-

mark. e explanation is likely that there are not that many interesting clients

in the area of concept design. erefore, the international design companies

have not yet found it to be financially attractive to locate within Denmark.

Figure 2.3


nies originating from the

region where they are

located

Table 2.1


nies originating from the

region where they are

located

15

14

11

621

10

74

13

810

5

0


36/75

36

e large concept design companies often have several branches. A normal

pattern appears to be that a concept design company is born in one of the

leading regions such as San Francisco or New York. When the company grows

to employ 70-80 staff members, a branch is opened in the region where most

of the new clients are found, or where the company perceives the existence of

interesting client potential.

2.3 Points system for identif ying Danish and international

concept design companies preconditions for carrying out

concept design

In the following section we evaluate the quality of individual concept design

companies. the starting point of the analysis is the point system that was

developed for the Danish part of the analysis.22 e point system is built on

a range of criteria that together provide us with an indication of the compa-nies prerequisites for working with concept design on a high professional

level. is approach allows us for comparing Danish and international con-

cept design companies in terms of their ability to carry out concept design.

e purpose of the international comparison is to create an image of how

well-prepared the Danish concept design companies are compared to the in-

ternational front runners.

2.3.1 e international survey

We have collected information on the companies ability to carry out conceptdesign through an international survey. For a more nuanced but also a more

precise description of the identified concept design companies the survey in-

vestigates the methods applied, collaborative partners, client relations and

network relations.

e question presented in the international survey are identical to the ones

asked in the Danish survey. Hence, responses are assumed to be comparable

to the Danish responses16.

e international survey was forwarded to the 103 concept design companies

identified in the international mapping. e companies are located in the

following regions: San Francisco/Bay Area, New York, London, Boston, Chi-

cago, the Netherlands and Munich-Stuttgart-Nurnberg17.

Unfortunately, we have seen some rather low response rates even though we

encouraged companies to answer the questionnaire through the phone and

through e-mails (Table 2.2).

16) For a detailed run-down of the pint system please refer to chapter 1.

17) See chapter 1, where the content of the questionnaire is presented.


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37

Region Number of identi-

fied concept design

companies

Number of respond-

ing concept design

companies

Response rate

San Francisco 30 4 13,3

New York 24 7 29,2

London 17 7 41,2

Chicago 11 2 18,2

Denmark 10 10 100

Boston 10 0 0

LA 8 - -

The Netherlands 4 3 75

Munich 7 3 42,9

e low response rate is a problem in terms of representation. is means that

only a few of the international concept design companies can be included in

the international point system. e results should therefore be treated with

some caution as other concept design companies that have not completed the

questionnaire potentially could be ranked at the top of the chart.

However, the analysis shows that many of the companies that have answered

the survey are the same companies that were highlighted as international

frontrunners during interviews with leading concept design companies and

knowledge individuals.

In our assessment it is still interesting to conduct the international compari-

son. It does provide us with an image of how well-prepared Danish concept

design companies are for carrying out concept design compared to the inter-

national elite.

2.3.2 Criteria for concept design companies

e point system is built around a range of criteria intended to provide an

indication of the individual companys prerequisites for carrying out concept

design on a high professional level. e criteria were developed during theDanish analysis. e individual concept design company is terms of their

responses.

e criteria are as follows:

Competences a high score is given to companies that frequently apply the

competences that are necessary when working with concept design.

Table 2.2

The international survey


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38

Methods and tools a high score is given to companies that frequently apply

competences from humanities and social, economics and business economics,

as the application of methods and tools from these disciplines are important

for the ability to work with concept design.

Customer contact For concept design companies it is often important to

involve the clients top management and innovation department. us a high

score is accredited if the design company is working with the top manage-

ment and/or innovation departments. On the other hand, a low or no score is

given to design companies working with client departments that are further

away from the strategic decision making.

Network activity the use of different disciplines is an important part of con-

cept design; therefore, concept design companies are required to work with

other companies and knowledge institutions. Network activities will there-fore yield a high score.

2.3.3 Ranking concept design companies

e point system shows that the list of companies scoring 38 points or higher

is dominated by US companies (Table 2.3).

Company number Sum (Max = 55, MIN = 38 point) Region

1 50 NY CITY

2 49 NY CITY

3 49 NY CITY

4 49 Munich

5 48 London

6 47 NY CITY

7 46 Denmark

8 46 Denmark

9 45 San Francisco

10 45 Denmark

11 43 San Francisco

12 43 San Francisco

13 43 NY CITY

14 43 Denmark

15 43 Chicago

16 42 Denmark

17 41 Denmark

18 40 London

19 40 London

20 40 Denmark

Table 2.3

Results from the inter-

national ranking


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39

21 39 Denmark

22 39 Denmark

23 38 Denmark

e highest scoring Danish concept design company (46 points) is ranked

seventh on the list. is despite an overrepresentation of Danish concept de-

sign companies as compared to the number of concept design companies in

other regions.

e highest scoring international concept design company (50 points) is lo-

cated in New York.

None of the Dutch concept design companies are ranked among the com-

panies that score 38 points or higher. While Denmark performs well com-pared to the Netherlands, we are not ranked in the upper part of the point

system18.

In addition to the companies that have responded to the survey there are

companies which have been identified as being particularly interesting con-

cept design companies by the international knowledge people and concept

design companies. It is assessed that five of those companies would be ranked

alongside the top-10 companies if included on the list. e five companies are

located in New York (2), San Francisco (2) and the Netherlands (1).

We find both large, medium-sized and small companies in the top-10 list.

e capability to solve complex concept problems does not appear to be con-

tingent upon company size. Concept design is a very special offering that

requires high levels of professional ability, but it also requires intuition and

thus very person-specific competences. ere are a lot of smaller companies

solving complex concept design challenges for some of the worlds largest

companies. Of the 3 companies that were assigned the highest score, there are

2 companies employing just 10-20 employees each.

As mentioned earlier we find an adequate number of concept design compa-

nies with 40 or more employees in the international mapping. When looking

exclusively at companies with more than 40 employees having scored more

than 38 points or higher we see no dramatic shifts. New York og San Fran-

cisco continue their domination of the ranking (Table 2.4).

Tabel 2.2

Status p udsendelse af

internationalt sprgeske-

ma

18) None of the identified concept design companies in Boston have completed the questi-

onnaire and have thus been omitted from the point system. It may very well be that those

companies would rank among the top-performers.


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40

Top company Point score Region

1 50 NY CITY

2 49 NY CITY

3 47 NY CITY

4 43 San Francisco

5 43 Denmark

6 40 London

7 40 Denmark

8 39 Denmark

It should be noted that a large portion of Danish companies fall out of the

ranking because they have less than 40 employees. us, most of the Danish

concept design companies are relatively small compared to the leading inter-

national concept design companies.

2.3.4 Summary

Overall, the results from the international point system show San Francisco

and New York host some of the worlds most capable concept design compa-

nies.

However, results would look somewhat different if more or other of the iden-

tified international companies had decided to participate. However, the evi-

dence suggests that many of the incoming replies have come from the mostadvanced concept design companies; hence, it is still interesting to compare

those with the Danish concept design companies.

If focus is on companies with more than 40 employees, the study shows that

Denmark has relatively few concept design companies compared to the lead-

ing US regions.

2.4 Significant conditions for a concept design region

Following the mapping of Danish and international concept design compa-nies and having assessed the quality of individual companies it could be inter-

esting to shed some light on the fact that most concept design companies are

located in a limited number of regions.

Which conditions have been beneficial to the blossoming of a professional

concept deisng environment such as the one found in San Francisco? Why is

it that no international concept design company have decided to establish a

stronghold in Denmark? And why is it that despite this Denmark has a large

Table 2.4

Results from the inter-

national point system

for companies with 40

or more employees that

have scored 38 points

or more.


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number of concept design companies?

Based on the information retrieved through interviews with leading Danish

and international concept design companies and knowledge individuals from

universities and business schools is it possible to establish three overall con-

ditions that repeatedly are highlighted as important conditions for a strong

concept design environment:

e needs of client companies

University education

Network creation

It is important to underline that the answers are ambiguous and that it will

require an in-depth analysis to find a coherent explanation to why one region

would distinguish itself from others.

2.4.1 e needs of client companies

One condition that has been highlighted as e key element in a regions strength

in concept design is the industrys focus on product development and inno-

vation. e larger the focus, the better the results. An important part of a

concept design companys work is to identify the users recognised and non-

recognised needs.

e Bay Area is one of the worlds leading regions in terms of product devel-opment and innovation that focus on users. One of the fundamental char-

acteristics of the region is a profound focus on user friendliness and a deep

understanding of users in the product development process, often referred to

as user-driven innovation19.

Concept design companies in the Bay Area grew up in a user-driven approach.

At the same time there is widespread sense of understanding in terms of the

potential for a user-driven approach to problem solving. e good message

has spread and is now well anchored in the region.

e industries strong focus on user-driven innovation is a huge advantage for

local concept design companies, as demand for their services is significantly

compared to most European regions such as Munich and the Netherlands.

Here, the industries grew up with a more traditional approach, where users

were only drawn into the process at the later stages of the product develop-

ment cycle.

19) Read more on user-driven innovation in: User-driven innovaiton - results and recommen-

dations. The report can be downloaded at www.foranet.dk


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Another trends that has been identified is that concept design companies will

often locate near large, multinational companies - except in Denmark. All of

the interviewed parties agree that the nature of the work commissioned by

client companies is highly important to the concept design company.

e Bay Area is dominated by the IT and pharmaceutical industry, Munich

is focused on automobiles. New York and London maintain a strong focus on

communication, and London is also characterised by maintaining a strong

focus on the services industry.

Concept design companies will be affected to a certain extent by the regions

industry structure.

e primary source of income for a concept design company is to sell serv-

ices to a client company. In other words the concept design company shouldtherefore be in close contact with potential client companies. Hence, it is

only natural for a concept design company to locate itself in a region that has

already attracted a range of major industries.

2.4.2 University structure

Another condition highlighted as very important is the structure of the edu-

cational system in the region. Concept design companies will gain advan-

tage from locating in regions where the educational institutions succeed in

combining the three necessary concept design competences: business, socialscience and design.

ere are surprisingly few spots where the educational institutions have suc-

ceeded in combing education and knowledge production that is relevant to

the concept design company.

e availability of competent employees was mentioned repeatedly during

interviews with the leading Danish and international concept design com-

panies. An important part of working with concept design is to have thenecesary competences through well educated and qualified employees. Most

concept design companies are seeing this as a scarce resource.

Strong concept design regions have produced a stable flow of well-educated

graduates that are much sought after by concept design companies.

Table 2.5 lists the educational institutions that were highlighted as important

suppliers of concept design graduates.


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Stanford Universitys D-School San Francisco/Bay Area

Parson School of Design New York

Royal College of Art London

Institute of Design, I ll inois Inst. of Techn. Chicago

3 of the three educational institutions are located in the United States and one

in London. I.e. there is a strong correlation in terms of location between the

top performing regions and the top performing educational establishments.

2.4.3 Network creation

e third and last condition that was highlighted as vital to an effective con-

cept design environment was the presence of a strong networking culture. For

several reasons it is vital to build a solid network.

First of all concept design is carried out on a very abstract and highly strategic

level compared to the traditional design companies. e growing complexity

in the problems presented to concept design companies necessitates a broad

as well as a specialised knowledge.

Secondly, concept design companies are experiencing a lack of resources in

terms of acquiring qualified and well educated employees. e concept de-

sign practice is growing and the educational world cannot keep up. To many

concept design companies it is therefore necessary to participate in networksto acquire the right competences and the latest available knowledge in the

area of concept design.

At the same time concept design companies are faced with increasingly com-

plex tasks.

rough interviews with leading Danish and international concept design

companies and knowledge individuals we have identified several types of net-

works that may prove beneficial to concept design companies. ey can bedivided into 3 types of networks:

Networks between concept design companies and universities

Networks between concept design companies and industries

Networks involving concept design companies

Networks between concept design companies and universities

It is important that the concept design company has the ability to evaluate

Table 2.5

Overview of international

educational institutions

with a strong record in

concept design


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a problem to a highly abstractive level. e approach to problem solving is

typically of a more strategic character and the problems are more complex 20.

Although a concept design company possesses the necessary competences -

business, social science and design competences - the problem solving may

sometimes require specialised knowledge; knowledge that can be collected

from universities and knowledge institutions.

At times a concept design company will require access to this specialised

knowledge to be able to solve the task at hand.

e closer the concept design companies are located to universities and knowl-

edge institutions the bigger the chance that the concept design company is

capable of acquiring the knowledge necessary for solving the task at hand.

is way the concept design company will get the most updated information

on knowledge and technologies that may inspire to alternative and perhapsradical innovations.

Furthermore, the concept design companies will get closer to the professional

disciplines that are vital for the company to possess, i.e. ethnologists, anthro-

pologists, psychologists, designers and business school graduates. Because of

the scarcity of graduates with this combination of competences it could be an

advantage for concept design companies to engage in networks with universi-

ties and knowledge institutions. is will give concept design companies a

greater chance of attracting the most qualified candidates.

e US concept design companies have an advantage in that respect since

most of the educational institutions offering concept design programmes are

located here including Stanford Universitys D-School, Parson School of De-

sign and Institute of Design, Illinois Institute of Technology.

Networks between concept design companies and industries

A second type of networks that appear to be conducive to a concept design

companys success is networks involving industrial companies from otherbusinesses.

Compared to the traditional design companies, the concept design compa-

nies work on a more strategic and abstract level. is implies that the chal-

lenges faced by concept design companies to a significant extent resembles

those found among industrial companies. Hence, it could be beneficial for

both parties to engage in networks.

20) See the main report for more on the various types of challenges faced by concept design

companies.


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Concept design companies participating in networks with industrial compa-

nies will gain a greater insight into the challenges faced industrial companies.

Based on this knowledge concept design companies can point to alternatives

to the more traditional approaches to product development.

For the industrial company participation in networks involving concept de-

sign companies will provide them with a much greater insight into the poten-

tial of concept design and in continuation there of a discussion of how inno-

vation processes targeting user needs are developed. Concept design provides

a deeper understanding of the market.

An increasing number of industrial companies are seeing the potential of us-

ing resources to understand user and user needs prior to the development and

launch of a product. e product will have a greater chance of success, and

in the longer term it will be possible for the industrial company to carry outconcept design based on experience and knowledge gathered via networks

involving concept design companies21.

Network involving concept design companies

e last type of networks mentioned by Danish and international concept de-

sign companies are networks between concept design companies. In general,

concept design companies may use such networks to size themselves against

other leading concept design companies. is may provide inspiration for

improving the use of methods and tools in concept design.

One important matter in that respect is that concept design may originate

from many business sectors. One may originate from traditional design, an-

other from a consulting company. Depending on the point of origin there

may be different competences available in the company. Concept design com-

panies may learn from each other and there lies a great potential in exchang-

ing experiences with other concept design companies that originate from

other industries.

In some of the identified international concept design regions we find

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