Profit from good design

How much do Indian companies invest in product design either to improve profits and performance or reduce manufacturing costs? Not much. A meagre one to 1.5 per cent of their turnover is spent on product development.

According to Darlie O Koshy, executive director, National Institute of Design (NID), design is hardly viewed as an engine of economic growth by domestic companies.

"Indian companies need to invest in design. We lag behind Europe, Korea and Japan as far as design innovation is concerned," he says. In the same breath Koshy adds that foreign companies are increasingly seeking services of Indian designers.

The link between design and business performance will be highlighted at the fourth CII-NID design summit titled "Envisioning Design in Business Strategy" being organised in New Delhi on December 8 and 9. The summit will focus on sectors like automobiles, consumer durables and lifestyle.

Apart from designers, the event will be attended by corporate head honchos such as Jamshyd N Godrej, MD, Godrej & Boyce Ltd, Bhaskar Bhat, MD, Titan Industries, Jagdish Khattar, MD, Maruti Udyog and Sanjeev Sharma, MD, Nokia Ltd.

While design may be low priority for Indian companies, a recent report prepared by NID's product designer Sridhar Ryalie suggests that about 10 to 15 per cent of the Indian design companies' turnover comes from projects abroad. The 60 design companies surveyed admitted that design service orders come from countries like the US, Europe and the Asia Pacific region.

But can design improve profits? The Design Council of the UK published a report called Design in Britain 2004-2005, where 40 per cent of the 15,000 companies surveyed said that they expanded their market share and entered new markets as a result of using new designs.

Things may be improving at home as well. In India, the number of companies that sponsor design projects at NID has risen from 25 in 2000 to 83 this year. Koshy says that 25 companies recruited Indian designers this year compared to 18 in the previous year.