Analysis: Companies that invest in design are more profitable

Consistent investing in design is highly profitable, even in the long term. The difference in profitability between firms that have invested in design and those that have not is 50 per cent or more, according to a survey by Teknikföretagen, an employers’ organisation for Swedish engineering companies.

The survey is based on a follow-up of the profitability and profit figures from Teknikföretagen’s member companies that participated in two major studies done in 2004 and 2008 by SVID and Teknikföretagen.

 “Companies that use design in a strategic and innovative way are clearly more profitable than those that don’t. The positive difference is even more pronounced when we compare their profit margins,” explains Teknikföretagen’s chief economist Anders Rune, who conducted the analysis.

 Profitable even seven years later

 The member companies that said in 2003 that they were investing in design in a strategic and innovative way, and that could be followed up seven years later, are still about 50 per cent more profitable than those companies that said they did not invest in design (13.4 per cent and 8.7 per cent return on total capital respectively). The average difference over the entire measurement period of 2006 to 2010 is of the same order of magnitude. 

Follow-up of two previous studies

The two previous and more comprehensive studies of companies’ use of design in their businesses which formed the basis of Teknikföretagen’s new measurements and analysis are:

SVID, Swedish Industrial Design Foundation | Visit: Söder Mälarstrand 29, 3 tr | Mail: Söder Mälarstrand 57, 118 25 Stockholm | info@svid.se I +46 (0)8 406 84 40

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SVID, Swedish Industrial Design Foundation | Visit: Söder Mälarstrand 29, 3 tr | Mail: Söder Mälarstrand 57, 118 25 Stockholm | info@svid.se I +46 (0)8 406 84 40