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INNOVATION BY : DIFFERENTIATOR IN THE DIGITAL AGE

Sara Diamond and Linda Lewis

Canada’s poor innovation record has been exacerbated by a reluctance to acknowledge design as a key component of innovation. We have the key ingredients for design to make a difference to Canadian innovation — a strong and varied sector, a base of university and college programs, exemplary firms, and proof that design matters. By including design as part of the innovation paradigm (research and development and design), we could radically transform Canada’s lacklustre innovation record into a leadership position.

Le design est un facteur clé d’innovation, et la réticence du Canada à reconnaître son importance ne fait qu’aggraver son maigre bilan en la matière. Nous avons pourtant tout ce qu’il faut pour faire du design un accélérateur d’innovation : un secteur dynamique et varié, des programmes universitaires et collégiaux, des entreprises modèles et des données confirmant son rayonnement. Il suffirait d’intégrer le design au paradigme d’innovation (et donc à la recherche-développement) pour redorer le terne bilan du Canada et en faire un pôle mondial d’innovation.

With great power comes great design. allow companies to stay ahead of where cus- Mercedes-Benz commercial for 2012 CLS 550, July 2011 tomers are by anticipating and addressing human needs and behaviours in the context of our complex and chang- anada’s poor innovation record has been exacerbat- ing world. “Hard problems” in research are called “wicked ed by a reluctance to acknowledge design as a key problems” by designers; these challenges require intensive C component of innovation. By including design as collaboration and multilayered solutions. Designers are part of the innovation paradigm (research and development multilingual — that is, they are able to facilitate dialogues and design) we could radically transform Canada’s lacklustre between very diverse disciplines such as business, engi- innovation record into a leadership position. neering and materials science, and between researchers Design is a multidimensional and crossfunctional activ- and investors. marries systems analysis ity that addresses the entire system of production and its life with outcomes-oriented problem solving. Design thinking cycle, from ideation through to marketing, offering a criti- is particularly relevant to creating efficiencies in services, cal path for successfully addressing complexity at key points products and business methods. of the value chain. As Bill Buxton, chief scientist of creates key messages and identity to shape demand. Microsoft and formerly of the Canadian high-technology Design redirects and refines existing products to address firm Alias/Wavefront, reminds us, products are the individ- new markets. Simply put, design transforms knowledge ual, social and cultural experiences that they engender and into products, services and processes that consumers want, the value and impact that they have on others — hence need and will pay for. design is about the experience of a product, system or ser- Design has become the differentiator in the digital era, a vice. Design is an interdisciplinary interpretive force that is period when technology and the expression of human needs able to analyze to suggest paths for actual prod- and comfort through excellent design are tightly inter- ucts and services that either meet or create consumer twined. Apple is the ultimate design company, successful at demand, bridging between raw and application. every stage along this journey, taking research technology at matches human capacities and needs, in its point of maturation and redesigning it for mass consump- all their variability and complexity, with technologies, lead- tion, creating successful user experience and building a mar- ing to the creation of new value-added products. keting chain and brand aesthetic. Apple designers

60 OPTIONS POLITIQUES SEPTEMBRE 2011 Innovation by design: Differentiator in the digital age strategically developed products that financial sector could and should be report acknowledges the Frascati users want, use and cherish. Apple particularly reliant on design to gain a Manual’s (2002) definition of R&D and understood users’ desire for a seamless competitive edge. These service enter- the Oslo Manual’s (2005) definition of desktop experience, adopted Xerox’s prises depend on their positioning with innovation. It advises that “innovation invention of the GUI (graphic user end users, whether business-to-business is more than research and development interface) and spun it into massive dis- or consumers. Canada’s four key science (R&D) — it is transforming knowledge into products and services Apple is the ultimate design company, successful at every that Canadians and others... stage along this journey, taking research technology at its need, want and will pay for.” point of maturation and redesigning it for mass consumption, Roger Martin, Chair of creating successful user experience and building a marketing Ontario’s Institute for Competitiveness & chain and brand aesthetic. Prosperity, has suggested that tribution. Having already triumphed and technology (S&T) areas — environ- the focus on science and technology as with the iPod — an invention that used mental S&T, clean energy technologies, the key to innovation has created a design to build on earlier Korean appli- information and communication tech- national stranglehold on invention. cations of MP3 audio technology on nologies (ICT) and health research and Upon the release in June 2011 of the mobile devices, Apple analyzed the dis- life sciences — include user-facing Institute’s report Canada’s Innovation intermediation of the music industry, dimensions that could be greatly Imperative, Martin aptly noted that recognized users’ desire to manage enhanced by excellent service as well as “Canadians are among the leaders in their own music or media, tracked the . Excellent developed economies in work effort, emergence of peer-to-peer download- ensures efficiency and provides power- hours per person, but we are laggards in ing technologies — and created iTunes, ful aesthetics and utility that focus on creating economic value per hour providing ease of downloading and an the end-user experience. Porter Airlines worked” and further that we are not easy price point and reintroducing stands out as a service-oriented compa- leading the world in creating innovative profitability into music distribution. ny that is design savvy and user-centric products, services and processes in our Apple intuited users’ desire to combine with its slogan “Flying Refined.” Design businesses and workplaces. This is the an audio device, multimedia richness, is relevant across the spectrum of very essence of design innovation as it tactility, aggregated communications Canadian firms because it extends into aims to transform inventions into some- functions, personalization through a business process analysis, an approach thing useful, desirable and accessible. wealth of applications and a mobile that is also called . Our assertions about the efficacy of phone — hence the iPhone was born, RED, a Danish firm, emphasizes the design are evidence-based. The impor- revolutionizing the mar- interdisciplinary qualities of this tance of design to innovation capacity ket. Apple designers understood the approach — the reliance on participato- and productivity growth is well docu- pent-up demand for light, portable, ry design (where end users are brought mented in a number of international easy-to-use tablet computers, equally into the design process), the goal of reports from Europe, New Zealand, comfortable in the bedroom, the nurs- “building capacity, not dependency,” in Denmark and the United Kingdom as ery or the boardroom, hence the iPad. relation to specific markets and the well as Canadian studies, all measuring We can see from the Apple example encouragement of out-of-the-box think- design intensity and linking it to inno- that the discipline of design requires a ing and solutions with the result being vation growth and capacity building at deep understanding of people, their fundamental change for companies. the regional and national levels. These differences, their desires and their Given that the Canadian economy studies show that design operates as a needs as well as creative skills to imag- remains dominated by SMEs (small and critically important source of economic ine, represent and prototype products medium-sized enterprises), such busi- value, raising firms’ levels of profitabili- and services. As promoters of innova- ness-oriented design approaches and ty and productivity, and contributing to tion, we need to bring design thinking skills are exactly what is needed in order national economic competitiveness and skills to the forefront of every stage to build innovation capacity in and performance. The UK Design of product and process development. Canada’s challenged manufacturing and Council’s Design Index (2009) tracked small service industries. 63 firms that used design as quality he report State of the Nation 2010: We need to redefine and broaden leverage to compete. These firms out- T Canada’s Science, Technology and our understanding of the levers in the performed the London Stock Exchange Innovation System lists critical several innovation process. State of the Nation FTSE Index by 200 percent in variable growth sectors of R&D capacity. Of 2010 noted that research and develop- economic conditions. Countries such as these computer services, software, tele- ment performed by business in Canada Finland with a high innovation and com services and the banking and is low by international standards. The competitiveness ranking invest in

POLICY OPTIONS 61 SEPTEMBER 2011 Sara Diamond and Linda Lewis

design. Finland has a strong focus on and technology development costs build internal market capacity and design, with an annual investment of and get best-in-class products and ser- urbanize as well as compete for interna- some $40 million, and rates fourth in vices to consumers. tional capital. global innovation and second in com- Pierre Beaudoin, the president and In fact Australia, , , petitiveness (2007). A report commis- CEO of Bombardier Inc. since 2008, has Denmark, Estonia, Finland, Hong sioned by International Enterprise declared a passion for product design Kong, Iceland, India, , Korea, Singapore (2003) showed that invest- and is actively pushing product innova- Norway, New Zealand, Singapore, the ment in product and visual design tion within the company. This strategy and the United brought a return on investment 26 per- has allowed Bombardier to address cus- Kingdom all have sophisticated design cent higher than investment in bank- tomer needs in Canada and abroad, to policies in place that encourage and ing services and 20 percent higher than enhance customer experience and to support homegrown industries to investing in computer technology. customize design for customers’ needs compete globally, always linking regardless of locale, whether it is design to national innovation and anadian quantitative evidence Toronto or Beijing. It has found envi- commercialization capacity. These C proves that excellent design has a ronmentally sound solutions by seeking countries through their joint govern- positive economic impact. A 2008 report ways to improve aircraft and train per- ment/industry/education agencies by Industry Canada, the Design formance through reducing energy con- have evaluated their capacity to com- Exchange and Canadian Manufacturers sumption, weight, emissions and noise. pete not only on their gross domestic & Exporters identifies design as product (GDP) but on their the critical element in achieving Design thinking marries systems GDP — good design policy. The better productivity. Product Design analysis with outcomes-oriented most successful countries have and Development: A Canadian problem solving. Design thinking is analyzed their strengths and Manufacturing Perspective uses weaknesses and adopted a four- Statistics Canada data to show particularly relevant to creating pronged approach to ensure how time-to-market measures for efficiencies in services, products and their ability to compete Canadian design and manufac- business methods. Communication through design — education, turing lag behind those in the US, design creates key messages and promotion, support and policy. but clearly accelerate when In many nations the potency of design capacity is added to a firm. brand identity to shape demand. design to solve wicked prob- A faster time to market reflects Design redirects and refines existing lems has meant that, as Tara better integration of the design products to address new markets. Vinodrai of the Martin and manufacturing processes, as Simply put, design transforms Prosperity Institute suggests in well as more effective application The Place of Design: Exploring of design and design manage- knowledge into products, services Ontario’s Design Economy ment principles. and processes that consumers want, (2009), “design holds the prom- STATE of DESIGN: The need and will pay for. ise as an arena for both creativ- Canadian Report 2010 (another ity and sustainability-led collaborative publication of Industry The shift in manufacturing from economic development thereby mak- Canada, Design Exchange and First to Third World economies has ing it attractive to business leaders, Canadian Manufacturers & Exporters, strengthened the need for national policy-makers and communities.” produced after the recession) analyzed design initiatives, allowing countries to India created a national design Canadian firms and found that “in remain competitive. In the recent strategy in 2007 that is driven by mak- today’s complex business environ- Toronto Regional Research Alliance ing the slogan “Designed in India, ment, the extent to which firms invest publication The Race for Global made for the world” a reality. It has in product design and development Leadership in Innovation: An Analysis of now included design as part of the (PD&D) is a key determinant of their National R&D Strategies, the authors mandate of its Innovation Council. competitiveness.” PD&D provides the remark upon China’s dramatic move- Measures include the strengthening of means to create new products, inno- ment from “the workshop of the world” IP policy, a focus on the export of vate with existing products, access new to a country concerned with design Indian design rather than India focus- markets and commercialize successful- specifications, intellectual property (IP) ing on service provision, enabling ly. Design was shown to help compa- and knowledge. It notes that “emerging SMEs to apply design to improve their nies meet changing customer markets are coming up with new and products through tax and direct fund- preferences, shorten the time-to-mar- innovative products at an astonishing ing, branding Indian design and a ket window, increase product capabili- pace.” The same can be said for India, large-scale investment in education ty and performance, control product where the drive is to eradicate poverty, and research at the National Institute

62 OPTIONS POLITIQUES SEPTEMBRE 2011 Innovation by design: Differentiator in the digital age of Design, sectoral design schools and general public of the need for good Despite the lack of coherent policy digital media schools. Bringing design design.” The National , Canadian design capacity has grown, a education into early grades, an established by Industry Canada, includ- response to the changes in Canada’s upswing in design focus at India’s ed all design disciplines and built on its industrial ecology. Studies as recent as world-class institutes of technology predecessor the National Industrial the 2009 The Place of Design: Exploring and public sector procurement of Design Council, created after the war to Ontario’s Design Economy have indicat- designed-in-India goods are also part help Canadian firms compete in the ed that Canada has a large and well of the mix. growing international market. established design service sector (locat- Denmark adopted a design policy Expo 67, with its focus on design ed primarily in Ontario, Quebec and in order to raise productivity — it and electronic media, owed its success British Columbia) with high levels of ranked seventh in the world competi- and acclaim in no small measure to the employment relative to the overall tiveness ranking in 2010-11. The initiatives of the National Design population. Its designers work as European Union has developed a plan Council. Architects, urban planners, small-business people with their own for design as a driver of user-centred industrial designers, graphic designers, firms and are integrated into many innovation as well as service design. The landscape architects, photographers and kinds of industries. Compared to other EU’s 2009 working paper Design as a filmmakers joined together with col- countries Canada has an average num- Driver of User-Centred Innovation argues leagues from around the world to cele- ber of World Intellectual Property for the need to recognize complementa- brate Canada’s 100th birthday and Organization (WIPO) and a ry factors that propel innovation and demonstrate its accomplishments. Expo low relative number of reg- that can be low-cost and not technology innovations included the first use of istrations. Canada has a strong post- intensive such as design. “Addressing what was to become the technologically secondary system — innovation drivers that are close to the innovative IMAX projection system, the from west to east — but few graduate market and the user may help the con- radical Habitat 67 housing project and design schools. Yet we produce more version of research results into wealth- the access-driven pictographic way-find- graduates than Canadian industry is generating innovations, and thus ing system, as well as the first extensive either prepared or willing to absorb increase the efficiency of R&D and inno- use of computer animation. Some said and exploit. While within the acade- vation spending.” Korea has pursued that Expo ‘67 was so successful that mies there is a willingness and desire three five-year plans that were a Canada’s designers had proved them- to engage in advanced response to the drop in demand for selves to the world and no longer need- there are no opportunities or funding Korean goods in the 1990s. The goal was ed government policy, support or mechanisms in place to encourage to bring Korea’s design capacity to that interference to help them make their this. With the exception of National of developed nations. Samsung invested mark. More likely government volition Science and Council millions in improving its product to establish Canadian design capacity (NSERC) , hiring fleets of designers and effectively Expo 67, with its focus on design and electronic media, owed leaving behind it a history of reverse engineering its success and acclaim in no small measure to the initiatives American goods to become a of the National Design Council. Architects, urban planners, world leader in its own right. industrial designers, graphic designers, landscape architects, Korea is now almost on par photographers and filmmakers joined together with with Canada in innovation th and global competitiveness. colleagues from around the world to celebrate Canada’s 100 birthday and demonstrate its accomplishments. n stark contrast to the I global design initiatives described was eclipsed by other national policies Chairs, the tri-councils and the earlier, Canada has few policies and ini- within an economy still focused on Canada Council do not acknowledge tiatives in place to encourage design commodities or branch plant manufac- design as a category for advanced excellence or competitiveness. It wasn’t turing. The National Design Council, a research or artistic support. always so. The Diefenbaker government joint industry-government body, and its got it right 50 years ago when on June public arm, Design Canada, were dis- hile the Design Exchange (DX) 1, 1961, it passed An Act for the solved in 1988. There was and is a W in Toronto is a national design Establishment of a National Design national failure to acknowledge that museum and centre for design promo- Council to, among other measures, design policy is not solely about design- tion, it is underfunded and there is no ”plan and implement programs to cre- ers but about innovation and Canada’s national promotion strategy for design ate an awareness by industry and the capacity to compete through design. in Canada, nor is design used as a

POLICY OPTIONS 63 SEPTEMBER 2011 Sara Diamond and Linda Lewis

Action Benefit Business and design • Create incentives for businesses to hire designers • Stimulate Canadian firms’ use of design. Introduces poten- tial SME clients to the value of integrating design into their strategies. • Provide design awareness seminars for SMEs in manufactur- • Identifies areas where design (in developing products, envi- ing and service sectors ronments and communications) can address specific goals and improve commercialization • Incentives for company design audits and strategy development • Enhances innovation and productivity. • Support firms’ use of design through IRAP program, direct • Supports design as part of innovation investment through design voucher and -in-residen- cy programs for SMEs. • Provide tax incentives for companies that invest in design as • Supports design as part of the innovation cycle. well as R&D • Undertake study to monitor impact of design use by partici- • Measures impacts of introducing , processes pating firms. and products on firms’ competitiveness Promote design • Establish design standards of excellence for products, busi- • Promotes the use of design industry capabilities nesses and services • Heightened urban and rural quality of life • Attracts international and national firms that require design Use design for strategic planning • Hold burning issue think tanks (design ) that • Mobilizes design intelligence to solve problems develop solutions for the core challenges facing Canada, • Develops scenarios, sketches and prototypes that industry working with design researchers and firms, key verticals and and government can implement and then scale up government Government role in procurement • Establish priority procurement and project management • Supports Canadian designers and retains them in the processes by government for Canadian design firms (SMEs province. and international headquartered in Canada). • Positions government as a living laboratory of excellence in design. • Ensures quality design in government products and systems. Design research and innovation • Include design research and support for design innovation in • Ensures science and technology innovation reaches market research funding programs (SSHRC, NSERC, CIHR, CFI) and place. commercialization networks by adding design to subject areas • Accurately positions design as an enabler. that can be funded across and within all specific themes. • Links design to ICT/digital media as well as other key priorities. • Invest in Centres of Excellence in Design Research and • Builds Canadian research and commercialization capacity in Commercialization. design across sectors. Design talent support • Develop high- skills in design to support a competitive • Prepares the next generation of designers and interdiscipli- creative economy and thriving Canadian design sector, nary innovators including businesses, HQP and school children • Invest in PSE design education, identifying it as a key priority Environmental sustainability • Include design within green ICT funding mechanisms • Creates a living laboratory for • Stimulates invention in green design, clean systems and technology • Sets government practice as a model Design for inclusion • Support Canadian expertise in inclusive and accessible • Makes Canada an exemplary jurisdiction for digital inclusion design; use government procurement to establish standards • Stimulates invention in , systems and tech- of excellence nology and growth of SME sector • Sets government practice as a model IP protection • Modify the process to reflect the types of intellectual • Builds Canadian-owned IP property of designers, encourage patenting Design promotion and heritage • Support national and regional design centres such as DX; • Promotes design and access to designers among manufac- support national design centre network turers and small businesses • Promotes Canadian design quality and preserves design her- itage Stragegy implementation • Create a national design secretariat in Industry Canada • Promotes, monitors design strategy and inclusion of design in economic recovery • Promotes design in Canada and abroad Design and digital economy • Sustains cutting-edge innovation capacity in key digital sec- • Include capacity as part of digital economy tors; builds market potential for Canadian inventions; strategy encourages consumer engagement Intergovernmental • Partner with initiatives at the provincial level that can create • Creates leverage for federal/provincial design expertise. a Canadian design strategy

64 OPTIONS POLITIQUES SEPTEMBRE 2011 Innovation by design: Differentiator in the digital age branding strategy for Canada abroad. ● Overall ranking: 5th the , work seamlessly Design promotion has been left to The study concludes that across borders as do design-focused individual cities. Toronto’s Economic although Canada has the third-largest retail/manufacturers such as Lulule- Development Department includes design service sector in the world, mon and Umbra. There is a design design and as part of its man- there is no design policy despite the brain drain — our best and brightest date while Montreal has recently posi- existence of an innovation policy “The are leaving Canada and setting up tioned itself as a member of the innovation strategy recognizes the shop elsewhere. Industrial designer Karim Rashid and graphic Pierre Beaudoin, the president and CEO of Bombardier Inc. designer Bruce Mau, both since 2008, has declared a passion for product design and is renowned for their innova- actively pushing product innovation within the company. This tive capacity, have settled for larger markets in New strategy has allowed Bombardier to address customer needs York and Chicago respec- in Canada and abroad, to enhance customer experience and tively. Canadian fashion to customize design for customers’ needs regardless of locale, graduates are in demand whether it is Toronto or Beijing. around the world.

UNESCO Creative Cities Network, cel- importance of developing and exploit- ost national design strategies ebrating design as a strategic force in ing new products, but does not com- M incorporate the following ele- the city. Unlike film or new media, ment on the role of design in this ments: 1) Encouraging public appreci- design is not acknowledged as a process. Indeed there is very little ation of their nation’s designers; 2) national export industry. mention of design in the innovation Mechanisms to encourage businesses The 2008 National Design strategy.” They found that businesses to adopt design and design practices; Competitiveness Report was created by the in Canada have not received any 3) Talent and skills production Korean Institute of Design Promotion incentives to include design as part of through strengthening design educa- and Chung Jai-hak of Sogang University their research and development strate- tion from K-12 through post-second- to examine three sectors (government, gies. Few companies have reached the ary; 4) Creating centres of excellence industry and the general public) of 17 point where they utilize design beyond for design research, development and countries and rank them in terms of styling or appearance, integrate it into promotion; 5) Design knowledge man- their design competitiveness from a per- the R&D process or consider design as agement including design patent legis- formance-oriented perspective, from an a key strategic element. lation; 6) Support for design research; investment/environment perspective As Canada does not promote the 7) Integration of design knowledge in and from the human resources perspec- integration of design into all aspects solving national challenges such as tive. Italy ranked first, followed by of Industry Canada’s innovation environmental sustainability, public and the United States. Korea and agenda, design graduates are working services and productivity. Denmark shared eighth place while all over the world and Canada exports We have used these guidelines and Canada ranked 12th — just ahead of more design services per capita than added a “made in Canada strategy.” China. Cambridge University’s Institute any other country. Others are taking We have the key ingredients for of Manufacturing also ranked countries advantage of Canada’s innovation design to make a difference to in relation to their design capability in capacity. Canadian innovation — a strong and 2009. Canada achieved the following Interior designers Yabu/Pushel- varied sector, a base of university and results: burg have established an internation- college programs, exemplary firms and ● Enabling conditions (total public al export practice with major projects proof that design matters. Design investment in design (N/A) throughout the United States and could help Canada turn the corner on ● Inputs (total number of design Asia. Their designs for hotels, depart- innovation and productivity. graduates) (5th) ment stores and restaurants have ● Outputs: (WIPO numbers of become the gold standard for design Sara Diamond is president of OCAD design registrations filed) (6th) innovation for companies such as University in Toronto, formerly the ● Outputs: (WIPO number of design Tiffany’s, W hotels, the Bay and Laine Ontario College of Art and Design, and registrations in force) (5th) Crawford. Export design services are co-chair of the Mobile Experience ● Outcomes (numbers of design firms offered by large architectural practices Innovation Centre. [email protected]. and employment in design service such as B+H that have projects Linda Lewis is founding president of the sector) (3rd) throughout Asia and the Middle East. Design Exchange in Toronto as well as ● Outcomes (turnover of the design Graphic designers, because of the free professor emeritus at Ryerson University service sector): 3rd trade agreement between Canada and in Toronto. [email protected]

POLICY OPTIONS 65 SEPTEMBER 2011