Design moves centre stage

Last week’s ‘party pooping’ Budget was loudly condemned for its domestic fiscal strategy, but quietly celebrated by the business community, in part for plans to offer nearly a third of public contracts to innovative small companies.

Last week’s Budget and two policy documents have put design firmly at the heart of the Government’s innovation strategy, says Emily Pacey


Last week’s ‘party pooping’ Budget was loudly condemned for its domestic fiscal strategy, but quietly celebrated by the business community, in part for plans to offer nearly a third of public contracts to innovative small companies.

In an orchestrated effort to boost innovation in public services, two Government departments published papers last week that include design – usually the preserve of culture and trade – on their agendas.

The Budget’s stated commitment to support small, innovative enterprises springs from the Department for Innovation, Universities & Skills’ White Paper Innovation Nation and the Department for Business Enterprise & Regulatory Reform’s new strategy, Enterprise: Unlocking the UK’s Talent.

BERR’s report – labelled the most salient part of the Budget by Confederation of British Industry chairman Richard Lambert – notes the strength of the design industry and acknowledges that connections between design and business are weak. However, it is Innovation Nation that puts design at its heart, detailing three Government-backed projects run by, or involving, the Design Council.

‘This is a very big win for design,’ says Design Council chief executive David Kester. ‘Design is being set out as an important part of the innovation process for the first time. There is a long history of defining innovation by a narrow script of science and technology, so this is a big shift from Government.’

Minister for Innovation Ian Pearson believes that design is central to innovation and that innovation is key to improving public services. ‘Building design into the services of local authorities and Government departments is going to be important for the future,’ he tells Design Week. ‘The contribution of design to innovation hasn’t been emphasised enough until now, but user-led innovation always clearly demonstrated the importance of design in developing new products, processes and new ways of working.’

The Government is the biggest buyer of products and services in the UK, spending £150bn a year, including £45bn from local authorities. Apportioning 30 per cent of that (double the current amount) to innovative, design-led small- to medium-sized enterprises would be no meagre sop in a climate in which business is tightening its belt on marketing spend.

‘If this is done properly, giving 30 per cent of public contracts to SMEs could stimulate innovation,’ says Nesta executive director of policy and research Richard Halkett. ‘For it to be effective, however, there will need to be high-level training for Government procurers. You have to think differently when you are working with innovative and small companies. The Government will have to start using advanced procurement techniques if it is to succeed.’

Doubts about their ability to effect real change usually accompany the release of Government reports and strategies. So, what are the design-related initiatives laid out in Innovation Nation?

First, Nesta is setting up a ‘public services innovation laboratory’ with partners including the Design Council. Although the laboratory is not an actual physical space, it will involve ‘experiments’ in ‘developing and trialling the most radical and compelling innovations in public services’, according to Innovation Nation.

Nesta is also working with the Design Council on an ‘innovation index’, to measure levels of innovation, which the Government suspects have been undervalued until now. ‘This will benchmark the UK internationally, with design woven into the metrics’, says Kester. A pilot index will be published in 2009.

A particular triumph for the DIUS-funded Design Council is the roll-out of its Designing Demand programme across Government. The initiative came into operation in 2006 with the aim of mentoring senior executives in the private sector to improve the way design is managed.

‘This should be directly transferable to the public sector, which really needs to see a cultural shift,’ says Kester. ‘If you really want innovation to thrive then you have to change the way you approach risk, for one thing.’

In his Budget speech, Chancellor Alistair Darling said he wants the Government to lead the way for business, in terms of promoting innovation. He, too, admits there needs to be a shift in attitudes towards design and innovation if business is to take on board the benefits of investing in what are commonly termed ‘intangibles’.

To help educate senior politicians and senior civil servants about the value of innovation and design, DIUS is setting up a Whitehall ‘innovation hub’, while training provision for the next generation of innovators could come from several Government initiatives and joint ventures with private business.

‘Resources permitting, DIUS will establish at least one National Skills Academy in every major sector of the economy,’ claims Innovation Nation. In addition, it details the Government’s financial support for James Dyson’s troubled project, the Dyson School for Design Innovation. Offering provision for 13- to 19-year-olds and adults, the half public funded, £22m school would feature programmes shaped by sponsors Airbus and Rolls-Royce, among others. It is scheduled to open in 2010.

Along with last month’s Creative Economy Programme White Paper, published by the Department for Culture, Media and Sport, Innovation Nation and the Enterprise Strategy constitute the strongest signal yet from Government that design is heading its agenda.

Kester says, ‘The Government has committed to an annual review, which helps to alleviate concerns that Innovation Nation is the end of something rather than the beginning.’

But if you feel like celebrating, just remember that a bottle of champagne costs 14p more than it did last week.

Shifting the balance

The 2008 Budget includes several measures to support small- and medium-sized enterprises and innovative businesses:



  • From April, the main Corporation Tax falls to 28% from 30%
  • From April, the new 18% flat rate Capital Gains Tax regime comes into effect
  • The Secretary of State for Business & Enterprise is to impose a limit on the amount of regulation being imposed from Whitehall 
  • A £12.5m fund to help female entrepreneurs
  • Amadeus Partners is to examine what barriers can be taken down to make it easier for SMEs to gain access to public contracts

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