Business Scoop

Design boosts the New Zealand economy by $10.1 billion

Press Release – Massey University

Ground-breaking research into designs economic contribution to New Zealands economy has shown that during the last year alone design contributed $10.1b to New Zealands GDP (approximately 4.2%). The research launched yesterday by Hon. Steven …
Design boosts the New Zealand economy by $10.1 billion
Ground-breaking research into design’s economic contribution to New Zealand’s economy has shown that during the last year alone design contributed $10.1b to New Zealand’s GDP (approximately 4.2%).

The research launched yesterday by Hon. Steven Joyce Minister of Finance, was undertaken by PwC and commissioned by a national design consortium (DesignCo). DesignCo comprises, Massey University’s College of Creative Arts; the Designers Institute of New Zealand; Otago Polytechnic School of Design; NZTE (Better By Design programme); AUT School of Art and Design; the Auckland Co-design Lab; Callaghan Innovation, and Victoria’s University’s School of Design.

Professor Claire Robinson, convenor of DesignCo, said at the launch of the research: “There is a strong correlation between national prosperity, economic growth and a thriving design sector. International evidence confirms that design leads to more competitive firms making and selling higher value products and services.

“The research reveals that if design were treated as an individual industry its contribution to the New Zealand economy would be larger than agriculture and on a par with retail trade ($10.6b), and food, beverage and tobacco product manufacturing. The sector also provides approximately 94,200 FTE design positions in New Zealand, roughly 4.4% of employment,” Professor Robinson said.

The research shows that the manufacturing industry contributed the greatest amount to design-related economic activity in 2016 with $2.7b. Product design and interactive design disciplines are the two biggest individual contributors towards design’s GDP, with over $4.5b of economic activity coming from these two disciplines (46% of the total).

The study indicates a broadening use of design as an effective process; in exporting firms, technology, health, conservation, the public sector and within cities.

Ludo Campbell-Reid, GM of the Auckland Design Office and Design Champion for Auckland said: “There is a global movement that is centred on cities that are transforming themselves through people centred urban design. Think Melbourne, Vancouver, London, Barcelona, Bilbao, Portland, Seattle, Helsinki and Copenhagen. Each of these cities has pursued a deliberate programme of economic revitalisation and urban renewal based around design led thinking. Great design is all about the value add: good for the environment, good for business, good for attracting talent and critical for social cohesiveness.

“Good design really matters. Well-designed schools discourage truancy, well designed hospitals help patients recover their spirits more quickly and well-designed cities are safer, more productive, more competitive and more sustainable. Without it quite the opposite occurs and we need to make sure that the public and key decision-makers are fully aware about the positive impact that design can have,” Ludo Campbell-Reid said.

Design in the 21st century, with the rise and rise of technology and interactive and open-source consumer platforms, is being harnessed more frequently, for a wider set of purposes and with increasing impact,” Ludo Campbell-Reid said.

In the private sector, the study highlights through case studies design’s significant impact on firms such as Gallagher Industries in New Zealand’s agricultural sector, Xero, Fisher & Paykel, Air New Zealand, Imake, Allbirds shoes and Goodnature. In each, design has played a significant role in their success.

Xero, a stockmarket darling in recent years, is one of New Zealand’s best design success stories: its insight into how to make reconciliation easy, the essence of the Xero approach to accounting, was devised by its co-founder, Philip Fierlinger, a designer, and design continues to ensure that the company’s growing number of customers experience the best possible interaction with the company’s software.

Allbirds, the world’s largest direct-to-consumer shoe brand that makes its own products and sells them, provides a model for New Zealand businesses, proving that firms can set up a smart design hub in New Zealand and sell in huge overseas markets. It has achieved extraordinary growth through design: at the end of 2015 there were 2 staff, one year later 30, and the plan is to go to 70 staff in 2017. The company plans to grow 400% this year.

Goodnature, a design company which provides pragmatic solutions to biodiversity decline caused by pests, has designed the first trapping system in the world that completely suppresses rats across large tracts of forest, giving the Department of Conservation a reliable method to trap that eliminates all trace of rats and slashes the cost of trapping by an astonishing 90%, without the use of toxins.

In the public sector, the study indicates a greater use of design’s methodologies and insights, with more and more public sector organisations, including IRD, MBIE and MPI establishing service design teams to improve government services to citizens. In the same vein, MBIE and the Auckland Council have jointly established the Auckland Co-design Lab, a joint initiative based in south Auckland, which provides a neutral space to co-design cross-sector collaborative approaches, in order to create radical, system-level solutions to seemingly intractable social and economic problems. The study also argues that urban design has a critical role in ensuring a city is a place where people want to live and visit.

Among DesignCo’s recommendations for future actions are:

Treasury to develop a national design strategy in collaboration with the New Zealand design sector.
Establish and fund a body similar to the UK Design Council responsible for the strategic coordination of design in New Zealand, bringing together the design industry, research and education.
Establish a programme of business support for the use of design by SMEs, similar to the NZTE Better by Design programme.
Increase targeted funding support for design-led service transformation in the public sector.
Widen the current conceptualisation of STEM to include creative arts subjects such as design and creative media production, and increase the EFTS funding for these subject areas.
Establish a dedicated research fund for design researchers to access, and infrastructure to support the allocation of funds (separate from science, health or arts funding).

(the full list attached)

Professor Robinson said: “DesignCo partners will continue to connect with the constituent parts of the New Zealand design eco-system in a systematic and regular manner, telling the story of New Zealand’s design excellence, rectifying the paucity of information about the design sector and gathering statistical data on the value and impact of design in New Zealand.

“We are convinced that the government are an essential partner in ensuring design’s potential in New Zealand is fully realised. We look forward to working with them to implement the recommendations,” she said.


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