Design Scoreboard: capturing design spending in firms Ahmad Beltagui 1 , Johann CKH Riedel 1 , Kulwant S Pawar 1 , James Moultrie 2 , Cecilia Malvido de Rodriguez 2 , Finbarr Livesey 2 1 Centre for Concurrent Enterprise, Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham, NG8 1BB, UK {ahmad.beltagui, johann.riedel, kul.pawar}@nottingham.ac.uk 2 Institute for Manufacturing, Department of Engineering, University of Cambridge, Mill Lane, Cambridge, CB2 1RX, UK {jm329, tfl20, cm459}@eng.cam.ac.uk Abstract The value of design is increasingly recognised, but design is often overlooked in favour of R&D in the measurement of innovation. Design is difficult to define, which makes it difficult to measure in financial terms. R&D was previously considered difficult to measure, but, as it is now well defined, financial measures of R&D have been established. Several previous studies demonstrated the commercial value of design, but failed to propose a reliable approach to capture design spending at the level of the firm. This paper presents a framework for classifying design activities and capturing design spending in firms. A number of exploratory case studies were conducted, four of which are described, to explore how companies understood design and how it could be measured. A conceptual model, by which the extent of design activity in firms may be better understood, is proposed. This model will be used as the basis of questions in a survey of design spending in UK firms. Keywords Design, Innovation, R&D, Performance measurement 1 Introduction In today’s dynamic, global markets, firms no longer develop products and services in isolation, but increasingly collaborate. With fierce, international competition giving more power to customers, it is essential to ensure that products and services allow a firm to compete on quality rather than on the basis of cost. This has made innovation a priority but also means that design is more important than ever. Due to increased outsourcing and collaboration between enterprises, individual firms’ use of design may increase or decrease. At present there is no objective way to determine this, since design is very rarely measured in firms. The Design Scoreboard project aims to produce national comparisons on several measures of design. As part of the project, this paper reports on an exploratory study to capture design spending in firms. 1.1 Measuring innovation Innovation is considered to be increasingly vital for the success of firms and nations (eg, Porter and Ketels, 2003) and is therefore measured in both firms and nations. Measurement is achieved through indicators of innovative output, such as numbers of patents registered, and input, most commonly through Research and Development (R&D) investment. Several writers argued that models of innovation, grounded in the manufacture of products, over-emphasise R&D and undervalue design. These writers have presented alternative models which emphasise the role of design, particularly in product innovation. Rothwell (1992) proposed a model which places design at the heart of product innovation, connecting R&D and marketing, to translate technology and market needs into products in the marketplace. Similarly Kline and Rosenberg (1986) saw design as the driver of innovation, representing R&D as a source of technology and solutions to problems which arise during the process, rather than its starting point. These models