Design Research in Companies

Crisis May Force Companies to Develop

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Although the total volume of Danish companies’ R&D activities is expected to decrease in response to the crisis, one in seven companies expects to increase its development efforts despite the current crisis. This is revealed in a survey from the Danish Agency for Science, Technology and Innovation. Thomas Alslev Christensen, head of department in the Danish Agency for Science, Technology and Innovation, and Tore Kristensen, professor of strategic design at Copenhagen Business School, both point to design research as a powerful tool for the companies.

By Irene Houstrup

Overall, crises generate growth, because they force companies to develop, says Tore Kristensen, professor of strategic design at Copenhagen Business School. And design research may support the development efforts that some companies initiate in response to the current crisis in order optimise the company’s strategy, products and processes, he points out.

Design research can be a powerful tool for companies in relation to crisis recovery. Design research is by its nature interdisciplinary, drawing on knowledge and methods from areas such as anthropology, business administration, sociology, psychology and engineering. Illustration: Mette Bager.

One in Seven Companies Increase Their R&D Efforts Despite the Crisis

In June 2009, the Danish Agency for Science, Technology and Innovation published a large-scale survey of the effects of the current crisis on R&D activities in Danish businesses. The survey, Erhvervslivets forskning, udvikling og innovation i Danmark 2009. Den økonomiske krises betydning (Research, development and innovation in businesses in Denmark in 2009. The impact of the economic crisis), is based on replies from a representational sample of 1,056 companies concerning the effect of the economic crisis on their R&D and innovation activities. It documents that overall, the crisis is expected to have a negative impact on Danish companies’ investments in research and development in 2009.

However, the survey also shows that many companies see new opportunities in entering new markets and implementing strategic changes, including increasing their R&D activities during the crisis. 14 percent of the companies – approximately one in seven – expect to increase their investments in R&D, while 19 percent expect to eliminate or reduce their development activities.

The Crisis Leads to Increased Interest in Government Innovation Promotion Schemes

According to the survey, the crisis has made the companies more inclined to take advantage of the government’s innovation promotion schemes such as the Industrial Ph.D. programme, innovation consortiums, innovation networks, the GTS – Approved Technological Service Institutes, knowledge coupons, etc. Eleven percent of the surveyed companies state that they are already using innovation promotion schemes, and 16 percent of current non-users say they will take a greater interest in it as a result of the crisis.

The figure offers a simplified view of the Danish innovation promotion system as well as examples of the instruments of the research and innovation policy. According to the Danish Agency for Science, Technology and Innovation, Danish companies are showing an increased interest in the public innovation promotion system during the crisis. Illustration: Jeppe Morgenthaler, adapted from Fig. 6 in Erhvervslivets forskning, udvikling og innovation i Danmark 2009. Den økonomiske krises betydning. Forsknings- og Innovationsstyrelsen.

“We are currently seeing a strong increase – especially among small and medium-sized enterprises – in the number of applications for the various innovation promotion schemes. For example, the number of applications for the knowledge coupon scheme has gone up by about 200 percent compared to last year. In one month, we have received more applications than we did all last year,” says Head of Department in the Danish Agency for Science, Technology and Innovation Thomas Alslev Christensen, who was in charge of the survey.

Among the companies that will take a stronger interest in the innovation promotion schemes, 32 percent according to the survey will be interested in services that revolve around cooperating and networking with others.
“The current crisis has caused many companies to make changes in their development activities, opening up and engaging in collaboration with, e.g., knowledge institutions or innovation networks in order to gain access to knowledge and minimise their own costs and risks in connection with development activities. This trend toward a stronger focus on collaboration, which also runs across professional boundaries, is positive, as it contributes to knowledge sharing that benefits both the companies themselves and society at large,” says Thomas Alslev Christensen.

Design Research as a powerful tool

In the survey report, the Danish Agency for Science, Technology and Innovation states that research, development and innovation are crucial for growth in a society. According to the survey report, increasing research and innovation efforts leads to higher productivity.

The Danish Agency for Science, Technology and Innovation also points to strong indications that investing in innovation, research and development has a certain ‘inoculating effect’ in relation to crises, and that these types of investments can help companies recover after a crisis.
“An analysis of entrepreneurial companies in the field of ICT, information and communication technology, shows that companies that invest in R&D do better during the crisis. Thus, it’s crucial whether the companies apply an offensive or a defensive strategy during the crisis. Furthermore, the ICT industry is strengthened by a considerable readiness for change and by its position as a supplier of solutions to other companies that are seeking a speedy recovery,” says Thomas Alslev Christensen.
“In ICT, development and crisis management often go hand in hand. We see a similar pattern in design. I believe that design research can be a powerful tool in relation to crisis recovery, as innovative design not only affects technology development but also emphasises aesthetic and functional qualities,” Thomas Alslev Christensen points out.

Crises Generate Development

According to Tore Kristensen, who studies design strategies and design economics, the overall effect of crises is to generate growth, as companies are forced to develop.
“The current crisis leads to change in two respects – some companies will develop a clearer strategy and act, for example by increasing their innovation efforts, while some of the companies that fail to act will be weeded out,” he says.

In his assessment, the crisis will make many companies seek to define the core of their strategy and their product, and in this process design research can make a strong contribution, for example in relation to identifying core products and customer needs.

During the crisis, Tore Kristensen is seeing an emphasis on product and process innovation in companies, and he points out that these are areas where design research plays a key role. “In product innovation design research is used specifically, for example in the development of user-centred design, while one of the focus areas in process innovation is mass customisation, the combination of individual customisation and low cost, where design research also has essential contributions to offer. Once the crisis is over, there will be a renewed focus on communication and branding,” he says and adds that there is still a considerable potential for design research in corporate market and organisational innovation.

Additional information

• Danish Agency for Science, Technology and Innovation: Erhvervslivets forskning, udvikling og innovation i Danmark 2009. Den økonomiske krises betydning. (Research, development and innovation in businesses in Denmark in 2009. The impact of the economic crisis), June 2009
• IT-Væksthuset A/S: Finanskrisens påvirkning på IT start-ups (The impact of the financial crisis on IT start-ups), June 2009 

Front page illustration: Mette Bager.