State of Design: The Canadian Report 2010

Highlights

In today's complex business environment, the extent to which firms invest in product design and development (PD&D) is a key determinant of their competitiveness. In general, Canadian firms that invest more in PD&D generate additional business benefits from new or significantly improved products, including increased revenue and improved access to new export markets.¹

Investment in PD&D by firms can be done either in–house or through outsourcing to PD&D service providers. The PD&D service industry is a technologically vibrant part of the Canadian service economy that supplies critical innovation services to other sectors, notably manufacturers, distributors, and retailers. PD&D serves as a link between creativity, innovation, and commercialization; a clear understanding of the trends and importance of PD&D as a value–added service activity is essential.

Industry Canada has partnered with the Design Exchange (DX) and the Canadian Manufacturers and Exporters (CME) to review the valuable service business function of PD&D. By collecting insights from the industry and international research organizations, and using economic modelling conducted by Industry Canada, this industry–government collaboration has produced a complete user/service provider profile of PD&D in Canada, summarized here in this report. This unique analysis is intended to help Canadian PD&D executives as well as decision makers understand current market trends and recognize the advantages of investing in PD&D to improve business competitiveness.

Key Findings:

• Main PD&D drivers include meeting changing customer preferences and shortening time to market windows.
• In the manufacturing and services sectors, PD&D occupations command nearly a 50 percent wage premium over the economy average.
• PD&D outsourcing to service providers is forecasted to increase by 20 percent by 2012 to $10.6 billion.
• The export intensity of Canadian product design service providers is 2.25 times greater than that of the United States.
• The adoption rates of advanced PD&D technologies are similar between small, medium, and large firms. However, fewer small and medium firms adopt PD&D processes compared to large firms.
• Regardless of business size, over 80 percent of Canadian firms report a significant improvement in the satisfaction of client needs and product quality as a result of adopting advanced PD&D technologies and processes.