IDSA 2010 DESIGN BUSINESS TRENDS

July 12, 2011

The data for the Design Business Trends study came from 66 respondents who responded to the compensation study. Of the 66 respondents, 19.7% were from the Midwest region, 19.7% were from the Northeast, 13.6% were from the Mideast, 16.6% were from the South, 16.6% were from the West and 15% were International. 72.7 % were from consultancies and 28.7% were from corporations.

Number of Respondents According to TypeRespondents Employees Represented

Consultant Total 48 574Corporate Total 19 287Total 67 861

Number of Respondents According to RegionRespondents Employees Represented

Mideast 9 44Midwest 13 157Northeast 13 234Southern 11 64Western 11 175International 10 157Total 67 831

Respondents

1. BUSINESS TRENDS

Annual Gross Revenue/Budget of the Respondents

Annual Gross Revenue/Budgetunder 125K 14%126-249K 10%250-499K 10%500-999K 27%1-4.9M 27%5-9.9M 4%10-19.9M 6%100M+ 2%

The most common range of annual gross revenue/budget for the Mideast region was under 125K (34%), for the Midwest was 500-999K (38%), for the Northeast was 500-999K and 1-4.9M (both at 31%), for the South was 126-249K (28%), for the West was 500-999K and 1-4.9M (both at 34%), and for International was 1-4.9M (33%). The most common range of annual gross revenue/budget for consultants was 1-4.9M (27%) and for corporations was 500-999K (42%).

Annual Gross Revenue/Budget per Regionunder 125K 126-249K 250-499K 500-999K 1-4.9M 5-9.9M 10-19.9M 100M+

Mideast 34% 22% 11% 22% 11% 0% 0% 0%Midwest 15% 8% 0% 38% 23% 8% 0% 8%Northeast 8% 0% 15% 31% 31% 0% 15% 0%Southern 9% 28% 18% 18% 27% 0% 0% 0%Western 8% 8% 8% 34% 34% 0% 8% 0%International 17% 0% 8% 17% 33% 17% 8% 0%

Annual Gross Revenue/Budget per Type

under 125K 126-249K 250-499K 500-999K 1-4.9M 5-9.9M 10-19.9M 100M+

Consultant 21% 12% 13% 23% 27% 2% 2% 0%

Corporate 0% 5% 11% 42% 27% 5% 5% 5%

Yes76%

not sure14%

No10%

Do you expect your businessto grow in 2010?

11-15%28%

6-10%26%

0-5%18%

16-20%14%

Above 40%8%

21-40%6%

If yes, by how much?

76% expect their business to grow in 2010/11. Of those that expect their business to grow, most think it will grow by either 11-15% (28%) or 6-10% (26%).

Business Growth

The categories with the largest increase in number of companies who are working on projects in that particular category from 3 years ago to 3 years from now, are the entertainment industry, personal accessories, environments, software/applications and services industry. The industries with negative growth are the computer equipment industry, office & productivity and transportation.

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Industry Categories

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Mideast

3 years ago

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3 years from now

The industries with the most positive growth in the Mideast are software/applications, computer equipment, entertainment, environments and home living. The industries with the least growth are transportation and leisure & recreation.

Industry Categories

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Northeast

3 years ago

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3 years from now

The industries with the most growth in the Northeast are the entertainment industry, and the software/applications industry. The industries with the least amount of growth are the computer equipment industry, leisure & recreation and medical & scientific products industry.

Industry Categories

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Midwest

3 years ago

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The industries with the most growth in the Midwest are the services industry, personal accessories, medical & scientific, leisure & recreation and environments industry. The industries with the least amount of growth are the commercial, computer equipment, entertainment and transportation industries.

Industry Categories

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Southern

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The industries with the most growth in the South are the medical & scientific, commercial & industrial and communication industry. The industries with the least growth are leisure & recreation, office & productivity and transportation.

Industry Categories

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Western

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The industries with the most amount of growth in the West are personal accessories, entertainment, software/applications and home living. The industry with the least growth is the medical & scientific products industry.

Industry Categories

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International

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The industries with the most growth internationally are services and entertainment. The industries with the least growth are computer equipment, leisure & recreation and medical & scientific products.

Industry Categories

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Research Design Strategy

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3 years ago

today

3 years from now

The percentage of work done in research is expected to increase 6.2% from 3 years ago to 3 years from now. The percentage done in design expected to decrease by 13.7%. The percentage in strategy is expected to increase by 10.4%.

Trends in Research, Design, and Strategy Work

Yes63%

No12%

Not sure25%

I am confident about the economy improving.

Yes78%

No5%

Not sure17%

I am confident aboutmy business.

Yes75%

No5%

Not sure20%

I am confident we willdo more projects.

When asked about their confidence in the future of their business and the economy, 63% said they were confident about the economy improving, 78% were confident about their business and 75% were confident they would do more projects.

Confidence in the Future

2. DIVERSITY TRENDS

Number of Design Employees

Total Male FemaleVice President of Design 16 11 2Design/Studio Manager 26 23 3Program Manager 23 16 7Principle/Lead Designer 52 40 8Senior Director of Design 9 7 2Creative Director 22 14 4Director of Design 19 15 3Senior Designer 92 63 15Researcher/Ethnographer 27 14 10Designer 107 67 30Entry Level Designer 28 14 4Student Interns 32 17 11Other Design Position 13 9 3

Number of Design Support Employees

Total Male FemaleOwner/Principal/Partner 82 73 7Vice President of Marketing 4 1 3Director of Marketing 5 1 4Marketing Manager 14 6 8Director of Sales 7 6 1Sales Manager 11 8 3Controller/Dir. of Finance/VP 14 7 6Bookkeeper/Accountant 20 2 17Programmer/Developer 40 20 20Project Manager 2 2 0Senior Engineers 73 66 5Engineers 66 58 8CAD Operators 36 34 2Model Makers 31 29 1Photographers 0 0 0Webmaster 2 1 0Office Manager 20 2 18Executive Assistant 5 0 5Receptionist/Clerk 17 0 17Other Non-Design 49 25 22

Designers Employed According to Ethnic Groups

Ethnic Groups % of Full Time Staff

White 81%

Asian 13%

Hispanic/Spanish/Latino

4%

Hawaiian or other PacificIslander

1%

Black or African American 1%

Designers Employed According to Age Groups

Age Groups % of Full Time Staff

Under 25 14%

25-34 42%

35-44 27%

45-54 12%

55-60 3%

60 and Above 2%

Highest Degree Achieved

Position Doctorate Master’s Bachelor’s Associate Certificate Intern Total

Principal/Owner/President 7.8% 31.4% 58% 2% 51

Vice President 50% 45% 5% 20

Design/Studio Manager 28.6% 71.4% 21

Program Manager 35.7% 57.1% 7.1% 14

Principle/Lead Designer 13.6% 86.4% 22

Senior Director of Design 27.3% 72.7% 11

Creative Director 28.6% 71.4% 7

Director of Design 20% 20% 60% 15

Senior Designer 6.3% 15.6% 75% 3.1% 32

Designer 5.1% 10.3% 82.1% 2.6% 39

Entry-Level Designer 5.6% 94.4% 18

Other Design 12.5% 12.5% 43.8% 6.3% 6.3% 18.8% 16

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Corporate

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The biggest difference in experience per position in consultancies vs corporations are in Director of Sales, Senior Engineers, VP of Marketing, Model makers and Office Managers.

Average Years of Experience

3. STAFFING TRENDS

Yes20%

No80%

Total Design

Yes25%

No75%

Industrial Designer

Yes22%

No78%

Graphic Design

Yes22%

No78%

UI Design

Yes14%

No86%

Other Design Related

Yes26%

No74%

Engineer

Yes32%

No68%

Support Staff

Yes32%

No68%

Management

When asked if their organization had reduced base salaries over the last year, the positions whose salary was most commonly reduced were management, support staff, engineers and industrial designers.

Reductions in Base Salaries Over thePast Year

Yes46%

No28%

Not sure26%

Total Design

Yes45%

No25%

Not sure30%

Industrial Designer

Yes36%

No27%

Not sure37%

Other Design

Yes41%

No39%

Not sure20%

Engineer

Yes22%

No45%

Not sure33%

Support Staff Yes8%

No70%

Not sure22%

Management

Yes35%

No37%

Not sure28%

All Staff

When asked if they will be experiencing an increase in staff if they realize and increase in work, 35% said they would while 37% said they would not. The positions that will most commonly be increased in size if firms realize an increase in work are total designer, industrial designer, engineers and other designers.

Increase in Staff due to Increase inWork Load

Yes83%

No11%

Not sure6%

Overtime

Yes85%

No6%

Not sure9%

Expect through efficiency gain

Yes93%

No7%

Outsourcing

Yes49%

No32%

Not sure19%

Use interns

Yes53%

No14%

Not sure33%

Other

If firms realize an increase in work but choose to not increase staff, the most common ways to handle the increase in work are through outsourcing, expect through efficiency gain and overtime.

Handling Increases in Work LoadWithout Increasing Staff

less28%

more7%

similar65%

Consultantless9%

more46%

similar45%

Corporate

Change in the Amount of Graduates being hired in 2010

less18%

more15%similar

67%

When asked if they are hiring more or less graduates in 2010, 15% said they were hiring more while 18% said they were hiring less. 28% of consultancies say they are hiring less graduates in 2010 while only 9% of corporations are hiring less. 46% of corporations are hiring more graduates while only 7% of consultancies are hiring more.

Change in the Amount of Graduates being hired in 2010 in Consultancies vs. Corporations

Hiring Graduates

4. PROJECTS

Money Spent of Design Tools

None Less than 10K 10-29K 30-74K 75-99K 100K+

Software 3% 63% 22% 8% 2% 2%

Computers 8% 61% 24% 2% 5% 0%

Prototyping 18% 16% 27% 25% 5% 9%

Presentation/Animation 21% 59% 15% 0% 4% 2%

Number of projects worked on in last 12 months

less than 25 25-74 75-149 150-400 400+Worked on 55% 32% 9% 2% 2%Completed 66% 30% 0% 4% 0%Completed and Produced for Sale 95% 5% 0% 0% 0%Will go to market 74% 22% 0% 4% 0%

When asked if the amount of projects worked on in 2009 was more or less than the amount worked on in 2008, 31% said it was more and 16% said it was less. 71% said that they felt the projects they were working on were getting more complicated.

Projects Worked On

0 – 10% of the time5%

10 – 25% of the time

11%

25 – 50% of the time19%

50 - 75% of the time17%

75 – 100% of the time48%

Valuable0 – 10% of the time

8%

10 – 25% of the time

15%

25 – 50% of the time

10%

50 - 75% of the time27%

75 – 100% of the time40%

Necessary

When asked if multi-disciplinary teams are necessary and/or valuable to complete projects, most said they were valuable 75-100% of the time (48%) and necessary 75-100% of the time (27%).

Multi-Disciplinary Teams

Level of Closeness Each Position Works with Consulting Clients or Corporate Partners

Position Closely Average Minimal Not at all N/ACEO 22% 30% 25% 17% 7%

CMO 13% 22% 16% 18% 31%

CIO (Innovation) 20% 24% 6% 14% 35%

CTO 21% 13% 26% 19% 21%

Human Resources 4% 15% 13% 43% 24%

Brand Management 37% 33% 16% 4% 10%

Product Management 74% 21% 2% 4%

Innovation 65% 18% 4% 14%

Development 67% 25% 8%

Engineering 72% 19% 7% 2%

Software Development 14% 27% 37% 6% 16%

Tool Making 19% 29% 31% 10% 12%

Production 26% 40% 23% 6% 6%

Level at Which Design/Customer Reports into

Level Percentage

CEO 28%

Senior Vice President 24%

Vice President 21%

Senior Director 12%

Director 10%

Other 5%

5. EDUCATION REQUIREMENTS

Subject Very ImportantCreative Problem Solving 84%Design Thinking 52%2D Concept Sketching 49%Verbal and Written Communications 48%Multi-disciplinary Team Interaction 43%Design Research 41%Internship or Co-Op Experience 37%Materials and Manufacturing Process 35%Design Theory 34%Experience Design 34%Computer Aided Design 32%Concept Model Making 29%User Interaction Design 24%Research Methods and Documentation 24%Computer Generated Imaging 21%Cognitive and Consumer Psychology 21%Marketing and Business Practice 21%Computer Rapid Prototyping 16%Working Prototype Making 16%History of Art and Design 16%Arts and Humanities 15%Non-Computer Rapid Prototyping 13%Management 13%Engineering Technologies 13%Mathematics and Science 11%Anthropometrics and Task Analysis 10%Computer Aided Engineering 10%Programming (Flash, Java, html, etc.) 10%Graphics Design 8%IT Skills 6%Video/Multi-Media Production 5%

When asked about how important they believed the teaching of certain subjects in undergraduate programs was based on their organizations needs and hiring plans, the subjects they felt were most important are listed here, ranked from most important to least important.

Importanceof Subjectsin Curriculum

execdir@idsa.org