Product Design
3. Design, Competitiveness and Developing Countries
While in industrialised countries, product design has being seen as increasingly (but often only recently) important to international competitiveness, in developing countries the same has not been true (Vijoen, 1997: 4-5). It is only recently that the design of products has been seen as an important factor in competitiveness. There are a number of reasons why design was not seen as being important in the past:
- As outlined in section 2 above, product design was often perceived as an exercise in aesthetics or fashion, as opposed to being a complex synthesis of market needs, creativity, technology, cultural and environmental appropriateness, ergonomics, and manufacturing. Therefore, product design was seen as being irrelevant to developing countries
- Since people in developing countries have lower per capita incomes, it is assumed that they are not able to afford "well designed" products. This assumption ignores the fact that product design can reduce the cost of products or make products more durable and of better quality. Therefore products would be 'well designed' if they were appropriate to their market
- Up until the 1970s most developing countries had a policy of Import Substitution Industrialisation. This had the effect of closing off markets to better designed imported products. Along side this, there has always been a high degree of state involvement in manufacturing in developing countries. This has been attributed to the lack of a middle classe capable of leading industrial development (Chandra, 1992: 62). State run enterprises have a tendency to be more production focused than marketing oriented. Monopoly enterprises do not have as much of an incentive to innovate.
Product Design is now seen as being relevant to developing countries since:
- World Bank and developing country policy has favoured the opening up of markets through tariff reduction. This has exposed local producers to cheaper and better desiged products, so firms are being challenged on both domestic and export markets
- Particularly in industrialised countries, product characteristics such as design, frequency of new product introduction and quality are becoming increasingly important. Price competitiveness (while still important) is diminishing in priority (Kaplinsky, 1994: 13) Industrial country markets are the main source of export expansion for DCs
- The newly industrialised countries of South East Asia have successfully used product design to produce competitive products for world markets
- There are opportunities for developing countries to design products which are appropriate to their own markets. Domestic producers have the advantage of knowledge of their local market and environment, as well as proximity to customers.
Van Dijk (1990: 214) has written about the increasing importance of non-price factors in the context of developing countries:
"Theories concerning industrialisation usually assume that industrial products can be absorbed by the world market if prices are low enough. This view is too simple. Marketing Channels, quantities produced, sensitivity to changes in consumer taste, etc. have become so important that small countries cannot easily export industrial products, not even if they have a comparative advantage."
While, product design has had marginal importance in the industrial policies of developing countries in the past, new moves are being made to promote its use as a development tool:
- The European Union has funded research into the use of product design in various countries. Internationally, conferences have been organised to promote product design, notably: in 1997 the International Council for the Societies of Industrial Design (ICSID) held a conference in Pretoria to address the subject of "Industrial Design Education for Developing Countries".
- The World Bank (1993: 1) has begun stressing the need to focus on the competitive capacity of individual firms in the overall development of the industrial sector:
Research by Bank consultants Martin Bell and Keith Pavitt shows that private firms, sometimes with public support, make a far greater contribution to the pace of change than public institutions. [1] As individual firms increase their efforts to initiate and manage change, they need to invest in research and development laboratories, design offices, and production engineering studies. Policy makers seeking quicker technological change need to take the needs of private firms into account.
In a case study of Mauritus, the world bank has highlighted another important role of design. In Mauritius, there has been downward pressure on wages since companies profit margins have been reduced by international competition after markets were liberalised. The bank suggests that investment in product design will upgrade products, increase workforce productivity thereby maintain or increase both profit margins and wage rates (WB, 1994: 1).
The experience of Asian NIEs shows that developing local design capabilities can play an important role in helping firms increase value-added and sustain competitiveness despite high labor costs.
Japan, is cited by Freeman (1987: 67) cited in Walsh et. al. (1992) as being a country where product design has played a crucial role:
...Japan in fact recognised in its post-war reconstruction programme the need for advanced industries capable of supplying products of high quality and good design, incorporating the latest technology and materials. In post-war Japan, there was actually an explicit struggle between the traditional economists who argued that Japan should concentrate on sectors like textiles, where it had a comparative advantage (cheap labour), and the majority of economists in the Ministry of International Trade and Industry who argued for the identification of key 'leading edge' technologies and strategies for Japan to achieve in them an international competitive position in the medium term'
This quote also touches on the important notion that comparative advantage is not unchangeable. The role of product design in the Newly Industrialised Countries of South East Asia has had an effect on policy thinking in developing countries. Singapore, for instance, has invested heavily in the product design with the establishment of the Singapore Design Centre to promote design in Singaporean industry.
In developing industrial strategies, the role of product design must be seen as an important element for success. Developing countries need to invest in improving the quality and design of their products in order to remain internationally competitive. There exists the opportunity to create new employment and provide products which meet the needs of people in developing countries through product design. Therefore capacity needs to be developed in order to educate a body of designers who understand the role and process of design in the development of individual companies' products for both domestic and export markets.