Economic Impact Assessment of the Design and Crafts Sector of Ireland Design & Crafts Council Ireland August 2021
Contents Section
Page
Executive Summary
4
Introduction
6
Profile of the Design and Crafts Industry
13
Skills and Demographics Characteristics
17
Demand for Irish Design and Crafts
23
Economic Impacts
27
Wider Social and Economic Impacts
37
Potential
44
Takeaways
50
Appendix
53
Data used in this report was compiled up to and including May 2021. Economic Impact Assessment of the Design and Craft Sectors in Ireland
2
Executive Summary
Executive Summary Grant Thornton’s research into the economic impact of Design and Craft in the Irish economy has identified a series of key findings which show the sector to be vibrant, productive, and delivering economic and social impacts across Ireland. Craft and Design are high value and growing The Craft and Design-Intensive sectors generated €2.9 billion in Gross Value Added* (GVA) in 2019. This value has grown by 111% (i.e. from €1.4 billion) since the last time the sector’s impact was measured, in 2012. Enterprises classified as ‘Design in other sectors’ contributed a further €17.7 billion, an increase from €5.1 billion in 2012. In total, over €53 billion of turnover was generated by enterprises across all three sectoral definitions. This would be equivalent to 6.7% of Ireland’s total business turnover of €794.7 billion in 2018.
The scale of the Design and Craft sectors is growing In 2019, there were 105,000 people employed across the Craft and Design economy (Craft, Design-Intensive and Design in other sectors), an increase of 39,000 from 2012. This makes the sector broadly equivalent to the information and communication sector (107,256) and similar to the construction sector (144,521). Between 2012 and 2019, the number of enterprises engaged in Design-Intensive and Craft activities rose 6.6% to over 18,000. If the Craft and Design economy, as defined in this report, were considered to be one sector, it would be the 8th largest in Ireland by number of enterprises and 10th largest by number of employees.
* Gross Value Added (GVA) is conceptually the same aggregate as Gross Domestic Product (GDP). They both measure the added value generated in an economy by the production of goods and services. The difference between the two concepts is that GDP is measured after including product taxes (e.g. excise duties, non-deductible VAT, etc.) and deducting product subsidies while GVA is measured prior to adding product taxes but includes product subsidies.
Craftspeople and Designers are highly productive In 2019, the 54,000 people employed in the Craft and Design-Intensive sectors contributed over €150,000 in turnover per employee and over €53,000 in GVA per employee. The Design-Intensive sectors, in particular, were highly productive, with turnover per employee of €200,000 and GVA per employee of €72,000. This compares favourably with other sectors such as construction and real estate. The value of Design in driving productivity and innovation across other sectors is highlighted by the €346,000 GVA per employee, making it the second highest detailed sector, ahead of information and communication and behind manufacturing only.
Craft and Design support a wide footprint of other businesses in Ireland As well as generating significant returns directly through their own output, Craft and Design enterprises provide a further indirect and induced benefit to the economy, and wider society, through employment, wages and other expenditure generated by downstream industries and employees of those businesses. This sees the total economic contribution of the sector increase to €3.6 billion from €2.3 billion in 2020 when accounting for an additional €0.8 billion of indirect benefits and €0.5 billion of induced benefits. Economic Impact Assessment of the Design and Craft Sectors in Ireland
4
Key findings Covid-19 – a significant challenge but creating opportunity for the future The Craft and Design economy, like almost all other sectors, could not escape the devastating impacts of the Covid-19 pandemic. 53% of respondents to DCCI’s annual client survey reported a decrease in sales, resulting in an estimated fall in turnover of €1.6 billion. This was a quarter of 2019 turnover and followed six consecutive years of growth for the combined sector. The loss of turnover meant that an estimated 7% of individuals previously engaged in Design and Craft activities in 2019 left the sector in 2020. Despite this, the comparatively small employment loss relative to the turnover loss suggests that those individuals may return to the sector when normal trading conditions resume. The survey also highlighted that 40% of respondents recorded growth, despite the challenging circumstances. A significant element of this growth was driven by the movement to, or greater reliance, on e-commerce. Grant Thornton understand that DCCI is assessing and addressing the challenges of the post pandemic economy and is finalising a new strategy for the sector.
Craftspeople and Designers are highly qualified
This represents growth across all ‘degree and above’ classifications since 2011, and reflects that those engaged are remaining in formal education for longer, that there are increased opportunities provided by the sectors, and also that there may be a growing expectation amongst employers for employees to be educated to this level.
Demographics challenges There is anecdotal evidence from stakeholder consultations to suggest that, prior to Covid-19, some areas of the Craft and Design-Intensive sectors faced challenges in terms of availability of skilled Craftspeople and Designers, as demand exceeded supply. In addition, some traditional skills were considered to be in danger of being lost due to an aging cohort of skilled practitioners and a lack of succession to a younger generation. Indeed, across the sectors, while their profile is broadly comparable to the wider labour force of Ireland, there is a clear ‘aging’ of the population amongst those engaged in both Craft and Design-Intensive activities. Similarly, the Design and Craft economy has a gender challenge, with males making up 72% of the Craft sector and 68% of the Design-Intensive sector. The subsectors include some heavily gendered activities, e.g. woodworking trades are heavily male dominated and sewing is dominated by women. Overall, the sector is very differently split in terms of gender compared to the whole economy, which is 54% male. It is important that DCCI consider tailored interventions to encourage Diversity and Inclusion, and ensure the development of the right mix of skills to support sector growth.
Across the workforce of both sectors, the highest level of educational attainment continues to rise, with 22% of Craft employees and 42% of Design-Intensive enterprise employees having received at least a degree classification.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
5
Introduction
Introduction
Design & Crafts Council Ireland commissioned Grant Thornton to conduct a study into the economic contributions of Design and Craft to the Irish economy, and to identify the wider benefits provided by the industry. Introduction The concepts of Design and Craft are broad, meaning different things to different people in different contexts. Design & Crafts Council Ireland (DCCI) is the national agency for the commercial development of Irish Designers and makers, stimulating innovation, championing Design thinking and informing Government policy. DCCI’s vision is that Ireland is recognised and valued for its culture of Design and Craft. To raise the standard, profile and economic impact of Irish Design and Craft, DCCI provides a range of programmes, supports and services for Designers and Craftspeople, learners and teachers, retailers and gallerists, shoppers and collectors, media and partner organisations. DCCI have almost 3,200 registered client enterprises of whom over 200 took part in Showcase 2019 (Ireland’s creative expo) raising revenue of €160 million. The corresponding 2020 event welcomed buyers from 2,760 retail businesses in 26 countries and featured over 400 creative brands, including 50 debuting at Showcase. The 2020 event saw year-on-year sales growth of 4.6%.
The two concepts can be broadly defined as: •
Design is a process of imagining and planning the look and function or workings of an object before it is made.
•
Craft is an artisan activity involving skill in making things by hand.
However, when the word Design is used to define a business activity, several seemingly different things may come to mind, i.e. industrial or engineering design as compared to architectural design, or even fashion design. The same can also be said of Craft. In short, there is no one agreed definition of Design or Craft or the business, activities, and roles which form those sectors. This was a key challenge in undertaking research to quantify the economic impact of the sector.
What is clear from anecdotal evidence and previous research is that the industries defined as falling within these concepts represent a range of diverse businesses and activities. These businesses have played an increasingly important role in the social, cultural, and economic growth of Ireland in recent years. Grant Thornton was engaged by DCCI to conduct an independent analysis of the sectors to calculate the value of this economic contribution to the Irish economy and identify the wider benefits provided by the industry.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
7
Methodology
Grant Thornton, in collaboration with DCCI and Market Dynamics, conducted a series of research engagements, including stakeholder consultations, a survey, and case studies. While the results of these are not representative of all Craft and Design practitioners and organisation in Ireland, they do provide indicative evidence and insights.
Stakeholder Consultations These were conducted with a selection of individuals and organisations considered to be key stakeholders of the wider industry and businesses directly involved in Design and Craft.
Survey
Case Studies
The DCCI Annual Client Economic Survey was developed in partnership with Market Dynamics and was issued to DCCI’s client base. This was one of the largest surveys of DCCI clients ever undertaken and it resulted in responses from 689 businesses.
A selection of Design and Craft enterprises were identified as examples of some of the key emerging themes from the consultation process and were analysed further to provide additional insights.
Stakeholders were categorised as: •
Craft and Design Businesses
•
Tourism
•
Culture and the Arts
•
Enterprise Development
•
Education and Skills
•
Innovation and Design
•
Government
•
Shock of Grey
•
Criostal na Rinne
Economic Impact Assessment of the Design and Craft Sectors in Ireland
8
Data Analysis
Another methodological challenge arises in selecting appropriate data sources and approaches to derive estimates for key economic variables such as employment, GVA or productivity. A ‘one-size-fits-all’ approach to the sector definition and categorisation of the sector across datasets would be unlikely to provide the robust analysis required. For the purposes of the analysis contained within this report, three separate categories are identified, namely:
Underpinning this report, and driving many of the estimations of key economic indicators for the sectors, is the data analysis approach. In all cases, we have utilised prudent assumptions to ensure that the outcome of this analysis is guided throughout by the principles of maintaining a logical, evidence based rationale. The absence of a definitive definition of the Craft and Design sectors provides an immediate challenge in seeking to assess the impact and value of the role the sectors play. There have been several previous reports emanating from Ireland and other jurisdictions which have sought to provide such a definition, including: •
Economic Significance and Potential of the Crafts Sector in Ireland (2010);
•
Innovation through Craft: Opportunities for growth (2016);
•
Winning by Design (2017); and
•
Together for Design (2020).
There is little consistency to be found in these approaches. A rigid approach to any specific definition risks excluding Designers or Craftspeople who work within other, more broadly defined categories, or including others who would not ordinarily be considered as such. For example, with regards design, the Irish Design Footprint report (2016) estimated that the Design sector, as it defined it, contributed circa €38 billion in exports in 2013. However, when analysed further, the report recognised that >98% of that value was generated by the Digital Design Group (Computer Programming Activities, Software Publishing, Publishing of Computer Games), with Design-Engineering, Design-Architecture, Design-Specialised, Design-Advertising and Design-Craft accounting for just 1.28% of that value. Similarly, it must be recognised that even within categories that may be defined as Craft related, an assessment must be undertaken as to whether this involves ‘traditional Craft’ or ‘industrialscale Craft’ enterprises.
•
Craft
-
Includes any object that has been made (usually) by hand by a Craft maker. Disciplines can range from ceramics and glass to jewellery and furniture, encompassing small batch production or stand-alone unique pieces of work, and may include the use of more unusual materials.
•
Design-Intensive
-
includes professional design services across many disciplines including graphic design, branding and creative advertising, print and packaging, architecture, product design and service design. It also includes design professionals working in the wider industry. For the purposes of this report we have defined Design-Intensive enterprises as ones which contain a significant proportion of design professionals and whose primary output is design focused. Activities such as web design, brand design or architectural consultancies would be included here
•
Design in Other Sectors
-
considers activity in non-design industries that engage design professionals but who do not make up the majority of employees and whose primary output may not be design focused. Examples of this include in house designers in manufacturing, engineering or professional services companies.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
9
The graphic below highlights the variety of activities which are categorised as ‘DesignIntensive’ and ‘Craft’, and shows the diversity of enterprises.
Textile Making
Furniture Making
Software publishing
These were defined in collaboration with DCCI through a two-step process. First, a Nomenclature of Economic Activities (NACE) analysis was conducted at a four digit level to select the most appropriate NACE codes for the Design and Craft sector. NACE codes are the industry standard classification system used in the European Union to classify different business activities through a hierarchical structure with each additional level providing increasingly granular data. Figure 1: Example of the make-up of a NACE code
Woodworking
Ceramics
Glass Making
Metal Working
Jewellery
Architectural and Engineering Consultancy
Level 1
Level 2
Level 3
Level 4
C
C23
C234
C2341
Manufacturing
Manufacture of other nonmetallic mineral products
Manufacture of other porcelain and ceramic products
Manufacture of ceramic household and ornamental products
NACE codes provide a framework for the collection and presentation, based on economic activity, of a wide range of statistics in economic fields such as production, employment, national accounts, and others. The statistics produced are comparable at a European and more generally at a global level. Secondly, those NACE codes considered to be ‘Design’ were subject to analysis which considered whether those codes were Design ‘Intensive’, or made a contribution to a wider non-Design specific sector. NACE codes used are included in the Appendix.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Craft and Design-Intensive Sectors
Design in Other Sectors
A number of enterprises within the broadly defined ‘Craft and Design-Intensive’ sectors were of significant ‘industrial’ scale and therefore were not considered as ‘Craft’ for the purposes of the study. For example, one NACE code included a multinational cosmetics company which had a disproportionate impact on the key economic metrics being measured. Exclusion of these large scale entities reflected a desire to capture ‘Craft’ in terms of scale. Analysis of DCCI’s Annual Economic Client Survey determined the typical size of enterprise that operates within the Craft and Design-Intensive sectors. This established that Craft enterprises can be typically characterised as micro, small or medium sized and typically have less than 50 employees. Consultation with DCCI provided guidance on this analysis. As a result, data which draws from national statistics excludes enterprises with greater than 50 employees.
Following consultations with stakeholders and DCCI, Grant Thornton noted that design has a wider reach in the economy than is illustrated through the inclusion of just the ‘DesignIntensive’ sectors e.g. some elements within the IT sector, which would not be considered as a ‘Design-Intensive’ sector in this analysis, will have design elements.
Analysis of the Design-Intensive sector, using the same approach outlined above, indicated that these were typically small, medium and larger enterprises which utilised more mechanical techniques than the Craft sector and so were of larger scale. The enterprises which combine to make up the Craft and Design-Intensive sectors are the key area of focus for this report. It is important to note that there are a small number of cases in which enterprises are considered as both Craft and Design-Intensive. When aggregating Craft and Design-Intensive activity, this potential to ‘double count’ has been removed.
To capture these design related elements, Grant Thornton, drawing on an approach outlined in The Design Economy (2018) report published by the Design Council in the UK, identified design related occupations (see Appendix for a definition). Using these design related occupations, Grant Thornton was able to identify the proportion of these occupations within each sector through an ‘occupation by sector matrix’. To ensure consistency and comparability with the methodology and results for the Craft and Design-Intensive sectors, Grant Thornton used data gathered from the Annual Detailed Statistics for Industry/Services published by the CSO and Eurostat. These data sources again provided us with a range of economic indicators, including: GVA, Turnover, Persons Employed, etc. Using the proportions of the identified design related occupations within each NACE sector, Grant Thornton were able to calculate the economic contribution of the ‘Design in Other Sectors’. In some instances, for the sake of comparison to other business sectors, this has been combined with Craft and Design-Intensive sectors to present aggregate figures for the Craft and Design sector. As part of our methodology, we have utilised a range of different sources of data to inform our analysis including: •
DCCI Register of Design and Craft businesses;
•
DCCI commissioned survey of Design and Craft businesses;
•
Central Statistics Office;
•
Eurostat;
•
FAME Database; and
•
Office of National Statistics.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
11
Methodological Approach Employed 01
02
04
05 Assessment of key economic metrics turnover, GVA, wages etc.
Application of filtering to remove large-scale industrial activities from analysis
08
07 Application of multiplier effects
Assessment of Ireland’s enterprise base by sector and size
Sector defined in broadest sense using NACE codes
Desk based assessment to define Design and Craft
06
03
Full Economic Impact Assessment of Craft and Design
Assessment of DCCI survey by size/turnover
Note: In all charts, 2020 is represented as a dotted line. This period relates to the impacts of the Covid-19 pandemic.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Profile
Report title 13
Profile
Figure 2: Number of Craft and Design-Intensive Enterprises, Ireland, 2012-2020
Between 2014 and 2019, the number of enterprises engaged in Design-Intensive and Craft activities rose from 16,799 to 18,225, an increase of 8.5%. The growth in the number of enterprises, peaking in 2017, is indicative of the “vibrant” sector experiencing a “renaissance” that was described in stakeholder consultations.
A flow of new entrants to the sectors, in part driven by the opportunities provided by the ability to showcase and sell products online, combined with the flexibility and autonomy granted, was driving a perception that the sectors are brimming with innovation and creativity. New entrants add to the already hugely diverse make-up of the sectors in Ireland which, while providing a challenge in terms of defining and measuring their value, only enhances the feeling that they are full of potential. The combined circa 18,000 enterprises, if considered a single detailed sector, would represent the 8th largest in Ireland, with construction the largest at 57,626 and accommodation and food the nearest comparable sector at 19,172 (based on the most recently available 2018 data from the CSO).
Craft Industries 12,800 12,600
5,800
12,400 5,700
Craft Enterprises
For many stakeholders consulted, Ireland was seen as the place to be, with a perception that design in particular has ‘come of age’. This point was evidenced by conversations with several ex-pats having returned home to establish or grow their business, and demand for design trained professionals outweighing the available supply.
Design Intensive Industries 5,900
12,200 12,000
5,600
11,800 5,500 11,600 5,400
11,400 11,200
5,300
Design-Intensive Enterprises
Activity Breakdown
11,000 5,200
10,800
5,100
10,600 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Employment Distribution Breakdown DCCI’s Annual Client Economic Survey provided further insights into the profile of the sector. Survey responses confirmed the micro/small enterprise nature of much of the Craft and Design-Intensive sectors, with more than 90% of businesses employing fewer than five people, and almost 70% employing 0-1 employees.
Small enterprises, defined as having between 10-49 persons engaged, and micro enterprises, which consist of fewer than 10 persons engaged, play a huge role in Ireland. 91.9% of all enterprises in Ireland are micro enterprises and 6.7% are defined as small according to the CSO’s Business in Ireland 2018 data. The same data highlights that the average number of persons engaged per enterprise in the Total Business Economy is 5.9. The survey also highlighted some of the impacts of the Covid-19 pandemic, with a clear contraction of employees per business observable across almost every category, indicating that there have been reductions in staffing levels as a result of the lockdown. Combined, these enterprises represent just under 50% of all persons engaged in Ireland (47.7%) and provide 26.8% of Gross Value Added (GVA) to the economy. According to the survey, the majority of workers, 65%, are employed on a full-time basis, 23% are part-time and a further 12% are considered seasonal. This suggests that, while it may be true for some, large parts of the Craft and Design-Intensive sectors are not merely ‘hobbyists’ but instead are individuals and businesses seeking to make a living from the sectors.
Figure 3: Employment in Craft and Design-Intensive Enterprises by business size, 2019-2020 Employment Per Business
2019
2020
0–1
59.7%
67.6%
2-4
29.6%
22.9%
5-7
4.9%
4.7%
8-9
0.7%
0.9%
10 - 19
3.0%
2.3%
20 - 49
1.6%
1.4%
50 - 249
0.5%
0.2%
250 +
0.0%
0.0%
Source: DCCI Annual Client Economic Survey, Grant Thornton Analysis
Figure 4: Employment Status of Craft and Design-Intensive Enterprises, 2020
65% Full-Time
23% Part-Time
12% Seasonal
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
15
Figure 6: Number of Craft and Design-Intensive Enterprises per 1,000 of the Population, County, 2020
Geographical Breakdown Figures 5 and 6 outline the numerical breakdown of Design-Intensive and Craft enterprises across the counties of Ireland. The analysis demonstrates a wide geographic dispersion of Design-Intensive and Craft activity across all counties. While there are a significant number of Craft businesses in major cities such as Dublin and Cork, it is also true to say that the nature of the enterprises allow for greater dispersion across Ireland than is perhaps visible in some other sectors. Indeed, Dublin represents 20% of all Design-Intensive and Craft sector businesses compared to representing 25% of the population. Clare provides 7% of all enterprises with just 2% of the overall population of the State, and in turn has the highest ratio of draft and Design-Intensive enterprises per 1,000 of the population (10.2). It is apparent from the analysis that the north-west coast of Ireland and border counties have lower concentration levels of enterprises than other regions of Ireland.
Figure 5: Top 5 Craft and Design-Intensive Enterprises per 1,000 of the Population, County, 2020 County
Craft and Design-Intensive Enterprises per 1,000 Population
Clare
10.2
Kilkenny
7.8
Wicklow
7.6
Cork
7.4
Limerick
7.2 Source: CSO, FAME, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
16
Demographic Characteristics and Skills profile
Report title 17
Demographic Characteristics and Skills Profile
Gender Breakdown Analysis of the CSO Census of Population 2016 highlighted a clear disparity in the gender breakdown of both Craft and Design-Intensive enterprises.
Figure 7: Gender Breakdown of Employees in Craft Enterprises, 2016 Male
100%
Female
80%
In 2016, an estimated 72% of persons engaged in the Craft sector were male. This represented a slight increase from the 2011 figure of 71%. Design-intensive enterprises comprised 68% male employees, which was unchanged from 2011. This suggests that both sectors are disproportionately male-dominated when compared to Ireland’s overall employment structure. CSO data from 2019 shows that 54% of the workforce were male. This compares to other sectors such as Construction which is 90%+ male or Education which is 70%+ female. It is important to caveat these findings by noting that the choice of definition of what constitutes the Craft and Design-Intensive sectors will have had an influence on this analysis. For example, 86% of woodworking tradespeople are male compared to just 16% of sewing machinists, menders, darners and embroiderers.
60% 40% 20% 0% State
Border
Midland
West
Dublin
Mid-East
Mid-West
South-East South-West
2016
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Figure 8: Gender Breakdown of Employees in Design-Intensive Enterprises, 2016 Male
100%
Female
80% 60% 40% 20% 0% State
Border
Midland
West
Dublin
Mid-East
Mid-West
South-East South-West
2016
Source: CSO, EUROSTAT, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Figure 9: Age Breakdown of Employees in Craft Enterprises, 2016 2011
50%
2016
40%
Age Breakdown
30%
Breaking the Craft and Design-Intensive sectors down into age groups presents an interesting picture, and one which indicates a potential challenge, if the trends presented were to continue.
20%
In 2016, 71% of Craft employees and 70% of Design-Intensive industry employees were aged 35 years and above. This compares to just 53% of the overall population, according to the 2016 Census of Population. For both sectors, this age cohort increased from the previous analysis, conducted in 2011, where 67% of Craft employees and 65% of Design-Intensive employees were aged between 35-65 years old. This is in line with wider labour force participation across Ireland, which sees 66% of the workforce aged 35 years and older. Additionally, for both sectors, the proportion of employees in the two cohorts aged below 35 years, namely those aged between 25-29 and aged 30-34 years, fell considerably over the same period, from 26% to 20% for Craft and from 28% to 22% in Design-Intensive. This suggests that those involved in the two sectors are getting older and may not be replaced by a younger generation coming through. This may present challenges in ensuring tacit/implicit knowledge of Craft and Design techniques is maintained and passed on. This point was raised in the stakeholder consultations, particularly with regards traditional Craft ‘making’ skills e.g. textiles skills, weaving, linen etc. The same was also said of the DesignIntensive industry where it was felt that there was an undersupply of people with the skills to meet both current and future demand.
10% 0% 15 - 19 years
20 - 24 years
25 - 29 years
30 - 34 years
35 - 49 years
50 - 64 years
65 years and over
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Figure 10: Age Breakdown of Employees in Design-Intensive Enterprises, 2016 2011
50%
2016
40% 30% 20% 10% 0% 15 - 19 years
20 - 24 years
25 - 29 years
30 - 34 years
35 - 49 years
50 - 64 years
65 years and over
Source: CSO, EUROSTAT, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Craft and Design-Intensive Sector Students In total, 12,000+ students were enrolled in what can be considered the traditional Craft and Design pathways within HEA funded institutions (universities, colleges and institutes of technology) in 2019-2020. Quality continues to improve, with the National College of Art and Design ranked within the top 100 art and design colleges by the QS World Rankings. However, the 2017 Winning by Design* report indicated that there were no design Apprenticeships available in Ireland despite the “hands-on” practical and studio based nature of design.
Figure 12: Enrolments in Craft and Design Subjects, Institutes, 2019-2020 Arts & Humanities
Engineering, Manufacturing & Construction
Information & Communication Technologies 100% 90% 80% 70% 60% 50%
Figure 11: Enrolments in Craft and Design Subjects, Ireland
12,810
Source: HEA, Grant Thornton Analysis
Maynooth University
12,640
Mary Immaculate Collage, Limerick
Total
Limerick IT
2,870
Letterkenny IT
2,780
0%
IT Tralee
Information & Communication Technology
10%
IT Sligo
810
IT Carlow
790
Galway-Mayo IT
Engineering, Manufacturing & Construction
20%
Dundalk IT
9,130
Dun Laoghaire Institute of Art, Design & Technology
9,070
Arts & Humanities
30%
Dublin City University
2019/2020
Cork IT
2018/2019
Athlone IT
Number of Students Enrolled
40%
Source: HEA, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland *http://www.skillsireland.ie/all-publications/2017/winning%20by%20design.pdf
20
Figure 14: Degree Classification of Craft and Design-Intensive Graduates, 2019
Educational Attainment Craft and Design-Intensive sector graduates perform comparably well relative to Honours Degree Graduates across all fields of study in Ireland. Over the past decade, an average of 17% of students achieve 1st class honours compared to 20% within the Craft and Design subjects. 47% of all Irish graduates achieve upper second class honours compared to 44% within the Craft and Design sectors.
Figure 13: Degree Classification of Craft and Design-Intensive Graduates 2018-2019 Honours Degree Graduates
2018
2019
1st Class Honours
1,130
1,160
2nd Class Honours (Upper)
2,890
2,510
2nd Class Honours (Lower)
1,740
1,480
180
120
2
2
1st Class Honours (20%)
Distinction (0.5%)
Merit (0.5%) Pass (7%)
3rd Class Honours Distinction Merit 1
4
10
2:1 (44%)
Merit 2
2
10
2:2 (26%)
Pass
390
420
Total
6,340
5,710
Source: HEA, Grant Thornton Analysis
3rd
Class Honours (2%)
Source: HEA, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Figure 15: Highest Level of Education of Employees within Craft Enterprises, Ireland, 2011-2016
Figure 16: Highest Level of Education of Employees within Design-Intensive Enterprises, Ireland, 2011-2016
25%
25%
Source: CSO, Census, Grant Thornton Analysis
Doctorate (Ph.D.)
Postgraduate Diploma/ Degree
Honours Bachelor Degree/ Professional Qualification
Ordinary Bachelor Degree/ Professional Qualification
Higher Certificate
2016
Advanced Certificate/ Completed Apprenticeship
Technical/ Vocational
Upper Secondary
No formal education
Doctorate (Ph.D.)
Postgraduate Diploma/ Degree
0% Honours Bachelor Degree/ Professional Qualification
0% Ordinary Bachelor Degree/ Professional Qualification
5%
Higher Certificate
5%
Advanced Certificate/ Completed Apprenticeship
10%
Technical/ Vocational
10%
Upper Secondary
15%
Lower Secondary
15%
Primary
20%
No formal education
20%
2011
Lower Secondary
2016
Primary
2011
Source: CSO, Census, Grant Thornton Analysis
Educational attainment across the two sectors has followed the international trend which is seeing more individuals progressing further in educational attainment, especially to honours bachelor degree / professional qualification. Between 2011 and 2016, across both sectors, the proportion of employees with Honours and postgraduate degrees has increased. Across sectors, educational attainment strongly correlates with higher earnings, with the median earned income for those with an Honours degree almost two times higher (189%) than those who do not progress to tertiary level education according to the CSO’s Geographical Profiles of Income in Ireland 2016 report. As is perhaps to be expected, there is a larger focus on educational attainment within the Design-Intensive sector than in the Craft sector, with professional qualifications being a necessity in some design roles.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
22
Demand for Irish Crafts and Design
Economic Impact Assessment of the Design an
Demand for Irish Crafts and Design
Figure 18: Sales Dynamics in Craft and Design-Intensive Enterprises, 2019-2020
Sales Dynamics
2019
The DCCI Annual Client Economic Survey asked DCCI members to compare their sales data for 2019 to 2020. The results highlighted two interesting movements between the two years.
Figure 17: Sales Dynamics in Craft and Design-Intensive Enterprises, 2019-2020
8%
25
20
% of Survey Respondents
Firstly, the impact of Covid-19 is clearly visible for many businesses, with 52% of respondents indicating that they had suffered a decrease in sales year-on-year. However, 40% of business reported sales growth in 2020 compared to the previous year. Some of this may be explained by a growth in online sales or, given that the largest increases in those who experienced growth were in the €0 - €5,000 and €5,000 - €10,000, this may reflect new entrants experiencing their first year of sales.
2020
15
10
5
40% 0
52%
€0 - €5
€5 - €10
€10 - €25
€25 - €50
€50 - €100 €100 - €250 €250 - €500 €500 - €1m
€1m+
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Increase
Decrease
Same
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
24
Figure 20: Total Exports of Design-Intensive and Craft Enterprises, Country, 2020
Exports Breakdown Ireland has long held a reputation as a country that punches well above its weight as a global net exporter of goods and services. In 2019, Ireland ranked 6 th in the World in trade balance (the comparison between Total Exports and Total Imports), with a trade surplus of €44 billion. The advent, increasing ease and subsequent popularity of online sales and global shipping has further opened up new markets for Irish makers and producers to target.
Very Sparsely Concentrated Sparsely Concentrated Concentrated
In 2020, exports made up an estimated 34% of all Irish Design-Intensive and Craft enterprise sales according to research conducted for the DCCI Annual Client Economic Survey. Of this, the EU continued to be the largest market for exports (35% of export sales). North America is the second largest market, accounting for 30%. While Brexit related concerns were unavoidable, and resulted in Great Britain and Northern Ireland losing export market share (down to 26%), it was felt by stakeholders that some initial teething problems were now being overcome.
Highly Concentrated Very Highly Concentrated
Figure 19: Total Exports of Design-Intensive and Craft Enterprises, Country, 2020 Export Destination
2019
2020
Great Britain (including NI)
29%
26%
EU
31%
35%
North America
29%
30%
Rest of the World
11%
9%
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
While exports as a proportion of turnover fell by only 2 percentage points to 36% in 2020, it represents a possible trend that should continue to be monitored. One potential reason for this could be growth in the domestic market, as the pandemic encouraged a consumer sentiment shift towards ‘made local’. While this is to be welcomed, other Irish sectors have demonstrated the success that can be achieved through highly targeted strategic planning and marketing of Irish products globally over recent years. Irish Design and Craft could similarly benefit from further developing such an approach. A report for Craft UK highlighted the correlation between UK Craft exports and the UK diaspora. With the Irish diaspora estimated to be 70 million, this could present significant future opportunities.
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
25
Channels to Market The Covid-19 pandemic has had many negative impacts for businesses across the economy, with Design-Intensive and Craft enterprises no exception. However, the disruption to traditional ‘business-as-usual’ has also presented both the opportunity and the driver for those enterprises to adapt and to embrace alternative ways to engage with consumers and the channels to market through which they sell to them. The DCCI Annual Client Economic Survey provides some indication of the impacts of those changes. In particular, it highlights increases both in ‘direct to consumer’ (B2C – Business-toConsumer) sales and ‘online sales’ as a proportion of business turnover, with a 9% increase year-on-year in the former and an almost doubling of the latter from 18% to 35% in 2020. Despite the pandemic, 40% of those surveyed saw increased revenue in 2020, with many businesses reporting a stronger 2020 performance compared to 2019 largely driven by growth in online sales. While traditional sales to a third-party retailer (B2B – Business-to-Business) and on to the final consumer will undoubtedly remain a key channel to market given wider retail trends, it would not appear premature to suggest that this represents a more permanent change in how Design-Intensive and Craft enterprises market themselves and bring their products to market. Indeed, one stakeholder consulted as part of this research summed up this trend when they referenced their ability to market and sell products that they make in a garage in Donegal to customers across the world. In short, it presents near limitless possibilities for Ireland’s Design and Craft sectors.
Figure 21: Direct to Consumer Sales Channel, 2019-2020
Figure 22: Online Sales as a % of Total Revenue, 2019-2020
57%
35%
48%
18%
2019
2019
2020
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
26
Economic Impacts
Report title 27
Economic Impacts Ireland’s Design and Craft sector is vibrant, diverse and innovative. It provides vital jobs in every county, sustains the skills on which Ireland’s unique heritage for Design and Craftsmanship is based and makes an immense contribution to our economy, culture, wellbeing and sustainability agenda. Figure 23: Total Turnover of Design-Intensive and Craft Enterprises, 2012-2020
In 2019, the Design-Intensive and Craft industries generated a combined €8.3 billion in turnover. The majority of this turnover, €7.7 billion, was generated by the Design-Intensive sector, with Craft industries contributing a further €0.61 billion. This represents 1% of Ireland’s total business turnover in 2018. By comparison, the construction sector contributed some €24.9 billion in turnover or 3.1%.
With the total number of enterprises having risen by the comparably smaller level of 7% over the same period, this suggests that individual businesses have managed to grow their turnover significantly since 2012. An estimation for turnover in 2020, utilising CSO figures, highlights the devastating impact of the Covid-19 pandemic on the sector. In total, the combined sectors are estimated to have seen a fall in turnover of circa €1.6 billion in 2020 from the previous year. This represents a quarter of all turnover lost in a single year after six years of consecutive growth in the combined industries. Analysis from the DCCI Annual Client Economic Survey provides further insights into turnover performance across the sectors, and highlights a mixed picture. While 53% of respondents reported reduced sales, 40% experienced increased turnover for the same period from 2019 to 2020. This was particularly the case for those with very small levels of turnover, with growth particularly in the sub €10,000 levels. Each category up to €100,000 €250,000 reported a drop in sales of at between 12% - 20% on average.
Craft Industries
This represents significant growth for both sectors since their post-Global Financial Crisis lows of 2012 with 73% growth from €4.8 billion (combined), 10% growth from €0.55 billion (Craft) and 81% from €4.26 billion (Design-Intensive). If the Craft and Design economy, including Design in Other Sectors as defined in this report, were considered to be one sector it would be equivalent to 6.7% of Ireland’s total business turnover of €794.7 billion in 2018 according to Business in Ireland 2018.
Craft Industries
€0.9
Design Intensive Industries
€9.0
€0.8
€8.0
€0.7
€7.0
€0.6
€6.0
€0.5
€5.0
€0.4
€4.0
€0.3
€3.0
€0.2
€2.0
€0.1
€1.0
€0.0
Design-Intensive Industries
Turnover
€0.0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
28
Figure 24: Total GVA of Design-Intensive and Craft Enterprises, 2012-2020
Gross Value Added measures the value of goods and services produced by an industry or sector of an economy. It is the value of output minus the value of intermediate consumption and is a component in calculating Gross Domestic Product (GDP) which is typically seen as an indicator of the health of a national economy and economic growth.
In total, the Design-Intensive and Craft sectors contributed approximately 1.25% of Ireland’s total GVA of €232 billion in 2018. When combined with the ‘Design in Other Sectors’ cohort of enterprises this increases to around 8.9% of the total GVA for the economy. Estimations for GVA in 2020 reflect the impact of reduced turnover, as noted above. It also suggests that some businesses have managed to find efficiencies through cutting intermediate consumption costs that may support a strong bounce back once normal trading conditions return. In total, the combined sectors are estimated to have seen a fall of circa €0.6 billion in GVA in 2020, representing a 19% fall from the previous year.
Design Intensive Industries
€0.4
€3.0
€0.3
Craft Industries
In 2019, the Design-Intensive and Craft industries generated a combined €2.9 billion in GVA. As with turnover, the majority, €2.68 billion, was generated by the Design-Intensive sector, with Craft industries contributing a further €0.25 billion. This represents significant growth for both sectors since their post-Global Financial Crisis lows of 2012 with 111% growth from €1.4 billion (combined), 17% growth from €0.22 billion (Craft) and 125% from €1.19 billion (Design-Intensive).
Craft Industries
€2.5
€0.3
€2.0
€0.2 €1.5 €0.2 €1.0
€0.1
Design-Intensive Industries
Gross Value Added (GVA)
€0.5
€0.1 €0.0
€0.0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
29
Figure 25: Total Employment of Design-Intensive and Craft Enterprises, Ireland, 20122020
In 2019, the Design-Intensive and Craft industries employed a combined 54,000+ employees. Of this, Design accounted for 69% or 37,000+, with Craft enterprises employing a further c.17,000. Across both sectors, the Compound Annual Growth Rate (CAGR) for employment was 4% between 2012 and 2019. The sector’s 54,000 employees makes it larger than the motor trade, real estate, and utility sectors.
The impacts of the global Covid-19 pandemic presented challenges for all sectors in 2020, and continued into 2021. Estimations indicate that 7% of all jobs were lost across the combined sectors, with Craft being particularly impacted, seeing a 20% fall (3,306) compared to just 2% (673) in Design-Intensive enterprises. This perhaps reflects the relative differences in the make-up of the enterprises within each sector in terms of scale, turnover and employment status. It is to be hoped that many of these roles will be able to return when normal trading conditions resume.
Design Intensive Industries
20,000
40,000
18,000
35,000
16,000 30,000 14,000
Craft Industries
When the 54,000 employees is combined with the additional 51,000 engaged by the ‘Design in Other Sectors’ cohort, the total employment of the Craft and Design economy is the 10th largest sector and comparable to the financial and insurance industry which employs 105,424.
Craft Industries
25,000
12,000 10,000
20,000
8,000
15,000
6,000 10,000 4,000
Design-Intensive Industries
Total Employees
5,000
2,000 0
0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
30
DCCI Client performance Figure 26: Employment in Top 150 DCCI Craft Enterprises, 2017-2020 1000
Employment
900
Top 150 DCCI clients mirror overall trend
A further insight from the Top 150 client cohort is the encouraging increase in the proportion of turnover generated from international sales. In 2017, the value of sales generated outside Ireland was €7.2m and was 21% of total sales. In 2020, the value of sales from international markets was €20.4m and now accounts for 36% of total revenues.
600
400 2017
2018
2019
2020
Source: DCCI Annual Client Economic Survey
Figure 27: Turnover in Top 150 DCCI Craft Enterprises, 2017-2020 € 80,000,000 € 70,000,000 € 60,000,000
Turnover
With the restrictions in place during much of 2020, and most retail channels to market closed, turnover in the top 150 client cohort suffered a decline of 16% in 2020 compared to 2019. This follows a positive period where turnover increased from €43.6m in 2017 to €68.0 in 2019. This supports the insights from consultees that (pandemic aside) the sector is enjoying a ‘renaissance’.
700
500
The DCCI Annual Client Economic Survey enables an analysis of the performance of the top 150 clients. This is a useful annual totem for the ‘state of the sector’ between more detailed analysis such as this report and the preceding economic impact assessment. It is clearly evident that the Top 150 DCCI clients have been heavily impacted by the pandemic. The 2020 employment figure shows a decline of almost 200 (one in four of the 2019 jobs) among this cohort.
800
€ 50,000,000 € 40,000,000 € 30,000,000 € 20,000,000 € 10,000,000 €2017
2018
2019
2020
Source: DCCI Annual Client Economic Survey
Economic Impact Assessment of the Design and Craft Sectors in Ireland
31
To provide a comparator, an estimation of the same productivity metrics was created for the United Kingdom across the period being analysed.
While the productivity trend is similar between the UK and Ireland, albeit with the exception of 2013 and 2016, where the UK outperformed Ireland more significantly, the UK’s sector is consistently more productive than Ireland’s Craft sector. In 2019, Ireland’s turnover per employee was €36,000 and GVA per employee was €15,000. This is a slight increase in both metrics since 2012 when the respective productivity levels were €34,000 and €13,000. Turnover per employee was €35,000 and GVA per employee €15,000 over the 2012-2019 period. This reflects the findings of the DCCI Annual Economic Client Survey, and additional analysis, which highlighted that Craft enterprises tended to be micro or small scale, with a larger proportion of part-time or ‘hobbyist’ workers than is typically found in other industries. Estimates for 2020 show that the Craft sector has been far less affected by the pandemic than the Design sector in terms of turnover per employee and GVA per employee. However, this is merely representative of the fall in turnover and GVA being counterbalanced by the far larger reduction in employment within the sector than within the Design-Intensive sector rather than a suggestion that the sector has avoided suffering significant upheaval.
Turnover per Person Employed
Productivity measures facilitate an assessment of output levels relative to a measure of input used in the production of a good or a service. It represents a measure of efficiency with which a firm, organisation, industry or an economy as a whole, converts inputs (labour, capital, and raw materials) into output. For the purpose of this analysis we have compared two of our economic metrics against the third, namely: Turnover and GVA relative to the number of Employees, to provide additional metrics for Turnover per Employee and GVA per Employee.
Figure 28: Total Turnover per Employee of Craft Enterprises, Ireland and UK. 20122020 Ireland
€80,000
United Kingdom
€70,000 €60,000 €50,000 €40,000 €30,000 €20,000 €10,000 €0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Figure 29: Total GVA per Employee of Craft Enterprises, Ireland and UK, 2012-2020 Ireland
€35,000
GVA per Person Employed
Productivity – Craft Enterprises
United Kingdom
€30,000 €25,000 €20,000 €15,000 €10,000 €5,000 €0 2012
2013 2014 2015 2016 2017 2018 2019 2020 Economic Impact Assessment of the Design and Craft Sectors in Ireland 32
In 2019, Ireland’s turnover per employee was €206,000. This is a significant increase since 2012 when the figure was €164,000. Average annual growth is 8%. Similar growth levels can be seen for GVA per employee. However, while Ireland outstrips the United Kingdom in terms of turnover per employee, the UK has a significant and consistent advantage in GVA per employee.
In 2019, Ireland’s GVA per employee was €72,000, an increase of €26,000 from 2012 levels. This productivity level would be broadly comparable to sectors such as construction (€74,000) and real estate (€71,000). However, the UK’s productivity for the same metric rose from €80,000 in 2012 to €98,000 in 2019. Only in 2016 did the two almost align. Unsurprisingly, given the pandemic, estimates for 2020 show a drop-off in all metrics. Turnover per employee declined by €37,000 in Ireland while GVA per employee declined by €13,000.
Ireland
€250,000
Turnover per Person Employed
Whereas the Craft sector broadly mirrored the performance of the UK sector since 2012, there is visibly more fluctuation with the Design-Intensive sector, at least when considering turnover per employee. Twice in the period analysed, Ireland overtook the UK in turnover per employee – from 2012-2014 and again from 2016 onwards.
Figure 30: Total Turnover per Employee of Design-Intensive Enterprises, Ireland and UK, 2012-2020 United Kingdom
€200,000 €150,000 €100,000 €50,000 €0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, Grant Thornton Analysis
Figure 31: Total GVA per Employee of Design-Intensive Enterprises, Ireland and UK, 2012-2020 Ireland
€120,000
United Kingdom
€100,000
GVA per Person Employed
Productivity – Design-Intensive Enterprises
€80,000 €60,000 €40,000 €20,000 €0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Economic Impact Assessment of the Design and Craft Sectors in Ireland
33
Only in 2016 is the gap temporarily closed between the two countries. On average, Ireland generates 63% of the GVA of the UK across the period, peaking in 2016 at 76%. Turnover is less consistent, with Ireland exceeding UK performance in 2016 and the two remaining within 8 percentage points of each other through to 2020.
Ireland
€175,000
Turnover per Person Employed
When Craft and Design-Intensive enterprises are considered jointly, Ireland and the UK are highly aligned in terms of turnover per employee. However, the UK has a distinct advantage in GVA per person employed.
Figure 32: Total Turnover per Employee of Craft and Design-Intensive Enterprises, Ireland and UK, 2012-2020 United Kingdom
€150,000 €125,000 €100,000 €75,000 €50,000 €25,000 €0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
Figure 33: Total GVA per Employee of Craft and Design-Intensive Enterprises, Ireland and UK, 2012-2020 Ireland
€100,000
GVA per Person Employed
Productivity – Combined
United Kingdom
€80,000 €60,000 €40,000 €20,000 €0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Economic Impact Assessment of the Design and Craft Sectors in Ireland
34
Economic Impact – Multiplier Analysis Having estimated key economic metrics such as employment and GVA, it is possible to consider the wider impact of Design and Craft sectors through multiplier analysis. A multiplier is a coefficient which, when applied to a direct economic impact e.g. operating and capital expenditure by Design and Craft businesses, enables the estimation of the impacts of that expenditure on the wider economy. The approach applied in arriving at the economy-wide impacts of the Design and Craft industries is based on the application of input-output analysis, which forms the basis for derivation of the national accounts of the Irish economy. Input-output analysis estimates the relationships between different sectors of the economy (e.g. Craft’s impact in the retail sector etc.). Multipliers are derived from the supply and use and input-output tables for the Irish economy, as developed by the CSO. The CSO’s supply and use and input-output tables for the Irish economy include output multipliers at a sectoral level based on the published Leontief inverse matrix. There are two types of multiplier which are relevant in the context of assessing economic impact, namely: •
Type I multiplier; and
•
Type II multipliers.
Type I multiplier = Direct + Indirect Impacts
Type II multiplier
Figure 34: Multiplier Analysis of the Design-Intensive and Craft Enterprises, Ireland, 2020
Total Economic Impact
Induced
Indirect
Direct
TOTAL ECONOMIC IMPACT The combined value of DIRECT + INDIRECT + INDUCED impacts.
INDUCED Economic activity generated by the employees of firms directly or indirectly connected to the sector in the national economy INDIRECT Employment, wages and other expenditure generated by downstream industries that supply goods and services to businesses within the sector DIRECT Employment, wages and expenditure associated with businesses in the sector
= Direct + Indirect + Induced Impacts Economic Impact Assessment of the Design and Craft Sectors in Ireland
35
Gross Value Added
Employment
Figure 35 shows the economy-wide multiplier impacts of Design and Craft on the Irish economy. The analysis estimates that, taking into account indirect and induced impacts in addition to direct expenditure, the sector provides €3.6 billion of GVA to the economy, an uplift of €1.3 billion on their direct contribution of €2.3 billion.
Figure 36 shows the economy-wide multiplier impacts of Design and Craft on the Irish economy. The analysis estimates that, taking into account indirect and induced impacts, in addition to direct expenditure, the sector supports employment of 59,900, an uplift of 9,600 on their direct contribution of 50,300.
Figure 35: Economy-Wide Gross Value Add – Direct, Indirect + Induced Impacts, 2020
Figure 36: Economy-Wide Gross Value Add – Direct, Indirect + Induced Impacts, 2020
€3.6 billion €0.5 billion
TOTAL ECONOMIC IMPACT
INDUCED
€0.8 billion
59,900
3,500
INDUCED
6,100 INDIRECT
INDIRECT
€2.3 billion
50,300 DIRECT
DIRECT
Source: CSO, EUROSTAT, Grant Thornton Analysis
TOTAL ECONOMIC IMPACT
Source: CSO, EUROSTAT, Grant Thornton Analysis
It should be noted that there are caveats which must be considered when using a multiplier approach to estimate the overall impact of an individual sector on the Irish economy. While care should be exercised in interpreting estimates of wider economic impacts it is clear that the Design and Craft sectors not only produce direct employment and output, but also has important links with other sectors across the Irish economy.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
36
Design in Other Sectors
Figure 37: Total Employment of Design in Other Sectors, 2012-2020 60,000
Many businesses across the whole economy rely on in-house design skills. In other words, enterprises where design is not the primary focus but where designers play an important role in supporting that primary focus generate further economic impacts.
The employment, turnover and GVA figures were considerably higher for this cohort of ‘Design in Other Sectors’ enterprises than for either Craft or Design-Intensive sectors given the breadth of coverage. Total employment within Design in Other Sectors has grown from 35,000 in 2012 to 51,000 in 2019, an increase of 16,000 additional roles created over this period. This represents 2% of total employment in Ireland at the end of 2019, highlighting the value of design to the wider economy. Turnover and GVA from Design in Other Sectors indicates a similarly significant contribution, with turnover rising from an estimated €21.4 billion in 2012 to €48.5 billion in 2019. GVA has increased from €5.1 billion in 2012 to €17.7 billion in 2019. Covid-19 has undoubtedly had a negative impact on these economic metrics. Employment estimates suggest a fall of 1% in 2020, while turnover is estimated to have declined by around 19% from 2019 levels, i.e. by €9.4 billion. GVA was €3.4 billion lower in 2020. Just as with the Craft and Design-Intensive sectors, it is hoped that these negative impacts will be quickly reversed and growth can resume once normal trading conditions return. Beyond the economic benefits identified here, Craft and Design activities play a wider, less quantifiable role in the economy. This role, which is explored in the following section, includes contributing to Ireland’s reputation abroad, sustainability and social cohesion.
Persons Employed
40,000 30,000 20,000 10,000 0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, ONS, Grant Thornton Analysis
Figure 38: Total Turnover and GVA of Design in Other Sectors, 2012-2020 €50.0
Turnover
GVA
€40.0
Total (€bn)
While the activities and contributions of those working in those enterprises are not captured within the definition of Design-Intensive sector which has been used in this report, their value needs to be recognised. To do so, a further analysis was undertaken to estimate the contribution that arises from the role of ‘Design in Other Sectors’. This involved taking design occupations as set out in the UK Design Council’s The Design Economy (2018) report and applying them to sectors excluded by the chosen definition of ‘Design-Intensive’ sectors. This was then applied to the same annual detailed statistics for Industry/Services used to calculate key economic metrics for both the Craft and Design-Intensive sectors. This ensured a consistent approach was taken throughout.
50,000
€30.0 €20.0 €10.0 €0.0 2012
2013
2014
2015
2016
2017
2018
2019
2020
Source: CSO, EUROSTAT, ONS, Grant Thornton Analysis
Economic Impact Assessment of the Design and Craft Sectors in Ireland
37
Case Study: Shock of Grey Shock of Grey was established in 2019 by Sarah Carroll Kelly following the discovery of “my first lock of grey hair”. The business focuses on Wearable Art, hand-crafted, sustainable but bold, beautiful and unique jewellery made from unpredictable materials. As a member of DCCI, Shock of Grey took part in Showcase Ireland 2021, with the exposure leading to a doubling in wholesale stockists in Q1 of 2021. The business launched an online shop in September 2020 and despite Covid-19 has seen major growth in sales via e-commerce since taking that decision. Shock of Grey’s success in this mirrors a key finding from the DCCI Annual Client Economic Survey with 40% of those surveyed reporting experiencing an increase in sales strongly driven by a move to online channels to market. Shock of Grey has recently been featured in The Irish Times, Irish Independent, Irish Country Magazine, The Today Show on RTE, Evoke.ie, RSVP and the Sunday World. The business has also been selected to join Design Ireland for 2021-2022 and is anticipating new opportunities that that will present. As a young company, Shock of Grey is building its profile, developing new products and considering future growth of the business.
Wider Social and Economic Impacts
Report title 39
Wider Social and Economic Impacts
Brand Ireland In a competitive and radically changing global environment, countries strive to establish, maintain and enhance the value of their brand in order to ensure a competitive advantage for attracting tourism and investment. The ability to demonstrate the strengths of the nation and market its attractiveness as somewhere to live, work and visit ensures Ireland’s global connectedness, supports the continued attraction of Foreign Direct Investment (FDI), tourists and international students, and supports in building the scale and reach of the Irish exporting sector. Ireland has historically been very successful in developing ‘Brand Ireland’, scoring consistently well in measures of Competitiveness (7th globally, IMD Competitiveness Yearbook, 2016), Workforce Flexibility and Adapability (1st globally, IMD Competitiveness Yearbook, 2016), and Innovation (7th globally, Global Innovation Index, 2016) while its ThirdLevel Educational Attainment, particularly amongst a younger population, outstrips the OECD averages. In 2019, Ireland’s “brand value” was estimated to be $604 billion by a report from Brand Finance, making it the fastest growing nation brand in Western Europe.
Tourism is a key sector where there are close linkages with the Irish Craft sector. The two sectors have a mutually supportive relationship whereby the presence of a vibrant Craft industry acts as an unique selling point that differentiates Ireland and attracts more visitors, while enhancing their visitor experience. A larger number of tourists provides additional revenue for the Craft industry as well as acting as an organic salesperson for both the country and the Craft product when they return home. Experiential tourism is a key area of focus for Fáilte Ireland, driven by the transformation in International tourism, as visitor expectations place increasing emphasis on ‘experiences’ over ‘products’. Experiential tourism is defined as the combination of:
PRODUCT
SERVICE
STORY
NARRATION
Core Product e.g. Attraction, Activity, Scenic Site etc.
The reason a product can stand out. This can be pre, during or post visit
The story of a place or people that can make an experience Lorem ipsum memorable
Communicating stories in a meaningful, authentic and memorable way
Ireland’s soft skill strengths in particular are considerable: •
Our people: highly educated, open, collaborative, creative, innovative;
•
An advanced enterprise, entrepreneurial and innovation base with truly global connections and well established routes to market; and
•
The quality of our natural resources and our deep and enduring cultural heritage.
Locally-based Design and Craft enterprises have a central and vital role to play in providing employment, enriching communities, preserving skills, and providing sustainable alternatives that are sensitive to our environment across Ireland.
The development of the Wild Atlantic Way is the best example of an experience proposition that not only has proven successful but which seeks to bring together Craftspeople and Craft business to enhance that experience. The provision of branding, training, marketing and supportive toolkits on how to maximise the value of tourism to Craft enterprises involved in pottery, glassblowing, woodwork, jewellery manufacturing etc. supported the creation of new enterprises and offerings across the geography of the offering. In 2018, 1 million more international visitors came to the West Coast of Ireland than in 2013, with more than 3.8 million international visitors and 5 million domestic visitors contributing more than €3.3 billion to the economy. This indicates the size of the prize to Brand Ireland. Economic Impact Assessment of the Design and Craft Sectors in Ireland
40
Innovation
Cross-sector innovation and collaboration between the creative industries (of which Craft and Design are a part) and other industries makes significant contributions, through:
Innovation improves competitiveness via increased productivity from new or improved products, processes, services or business models, and new markets for those products and services. Innovation embraces the opportunities that new technologies provide and ensures that a company remains current and viable. In short, innovation can be the key to survival for business.
•
the generation of innovative ideas, which contribute to the economy’s potential to generate new projects and services;
•
the services they provide, which may support the innovative activity of other enterprises and organisations; and
•
their role as intensive users of bespoke technology, meaning they often require adaptations to existing technology, or drive the demand for new technology which spurs innovation.
The 2017 Winning by Design report highlighted the link between design and innovation: ‘Design is a holistic and multidisciplinary problem-solving approach that takes user needs, aspirations and abilities as its starting point. It has a crucial role to play in the broader concept of innovation and can act as the bridge between technological, service, user-centred and social innovation because at its core design is a human-centred process.’. The report cited examples of the role that design plays in innovation, such as the approach taken by Apple to developing new technology which has allowed it to grow into a dominant market position. With such examples, it is easy to see design’s innovation characteristics. Perhaps with the Craft sector it is less immediate, but nonetheless equally present.
The same human element of Craft lends itself to innovation through the evolution of techniques, discovery of new materials and application of new tools. In addition to this direct impact on innovation, innovation through Craft defines the process through which makers facilitate or catalyse innovation in other sectors through spillover effects.
This may be increasingly valuable in modern society in what has been referred to as the 4 th industrial revolution, or Industry 4.0, where digitalisation of the economy is reshaping much of how industry and other sectors operate by blurring the lines between the physical, digital and biological. An example of this can be seen in the growth of 3D printing across a wide-range of functions. The growth of digital technology is also facilitating a greater closeness between maker and consumer, making the Design and Crafting process a collaborative one where customers can have direct input. This can result in further innovative, customised and personalised products that speak to both uniqueness and authenticity. This has the potential to create new partnerships and drive forward future innovation and collaboration between the Design-Intensive and Craft sectors, other sectors and consumers.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
41
Sustainability and Community
It is based on three principles: •
Design out waste and pollution;
Sustainability is usually defined as the processes and actions through which humankind avoids the depletion of natural resources, in order to keep an ecological balance that doesn’t allow the quality of life of modern societies to decrease. In this way, the term “sustainability” can be broadly applied to characterise improvements in areas such as the linear consumption of products, citizen lifestyle, consumer purchasing behaviours, etc.
•
Keep products and materials in use; and
•
Regenerate natural systems.
Some key concepts of sustainability in the contemporary consumer society are: •
Cradle-to-cradle;
•
Slow-fashion;
•
Locally-made;
•
Re-use;
•
Recycle; and
•
Re-make (or upcycle).
Each of these concepts focuses on the design and manufacture of products that are essentially made to comply to a sustainable framework, enabling people to live in harmony with our planet. However it is defined, in the 21 st century there is increasing awareness of the need to ensure that all facets of our economy and our wider society are sustainable. The term Circular Economy has been increasingly popular. The idea of an economy that is restorative and regenerative by design, and which recognises the importance of the economy needing to work effectively at all scales – for big and small business, for organisations and individuals, globally and locally.
In speaking to stakeholders it was very clear that there was an understanding of the important role that the sectors play in sustainability and the Circular Economy. This theme was summarised in conversation as a ‘return to Craft values’. The #MadeLocal campaign which encouraged consumers to support local enterprises and the wealth of designers and makers on their doorstep was seen as a tremendous success both in boosting awareness and sales and in reminding stakeholders of the role they can play in developing a strong, successful Circular Economy. The role that Design and Craft can play in unlocking opportunities through empowering local communities was also highlighted, and is a key area of focus for DCCI as it delivers its new strategy. In the UK, the Crafts Council’s Make:Shift:Do is a leading example of encouraging participation. The annual programme seeks to partner makerspaces with local community groups to encourage participation and public interaction at all ages with the aim to widen engagement with new technologies and making, and ‘demystify’ spaces. Making can be seen as a powerful tool in supporting the building of communities, boosting of mental health and wellbeing, and empowering people to refashion their lives through growing in confidence and rediscovering a sense of agency. In short, strong engagement with local communities can result in social change for the better.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Case Study: Criostal na Rinne Criostal na Rinne was established in 1987 as a small familyrun workshop in County Waterford.
“We craft precise hand cut crystal products for discerning customers around the world. The products we make are stories made physical. More than just useful objects, they create meaningful connection with our rich culture, history, nature and language.” Aligning the business with local tourism opportunities has been an area of focus since the early 1990s, targeting UK tourists heading west from Rosslare and US tourists travelling through Shannon Airport. Since 2015, Criostal na Rinne has engaged with a number of organisations to market more widely to the ‘culturally curious’ visitor. The business also engaged with Fáilte Ireland and particularly their Ireland’s Ancient East programme to become IAE charter accredited so the logo can be used on various media and in order to be a listed attraction on the IAE website. Fáilte Ireland also ran a Craft tourism workshop for Ireland Ancient East based Craft businesses which the business participated in and which was very beneficial to building the company’s brand awareness amongst other tourism providers and learn a lot about marketing a Craft business for tourism. The business is now also a stockist in the Design Ireland store in Terminal 2 of Dublin Airport and is looking to enhance its tourism offer by partnering with luxury tourism providers to develop enhanced workshop experiences for visitors seeking something more from their trip to Ireland.
Potential
Report title 44
Potential
Macro Picture The Covid-19 pandemic has had a significant impact upon the macro economic picture, with no country having been ‘untouched’ by pandemic impacts. Prior to the pandemic, the global economy had been recording consecutive years of positive growth. Labour markets were strong, to the extent that policy concerns were focussing on whether the labour market had reached ‘full employment’ and was at risk of ‘overheating’. The impact of the Covid-19 pandemic stopped these concerns in their tracks, with all countries enduring a sharp recession as they entered into lockdown measures. A positive sign in considering how the economy will ‘bounce back’ can be found in how economic activity rebounded in summer 2020 when restrictions were eased. The need to reintroduce restrictions, which were then extended into Q1 2021 tempered this recovery, but the willingness of consumers to re-engage provides economic encouragement. For context, Figure 39 presents a selection of global, EU and Ireland specific forecasts of economic prospects over the coming years. The consensus among the forecasters presented is that 2021 will see a strong rebound, with growth rates ranging between 4.0% and 5.6%. Growth in the EU, according to the EU’s Spring Forecast, projects the euro area to grow by 4.6% in 2021 and 5.0% in 2022, with ESRI and the Department of Finance suggesting between 2.6% and 4.4% growth in 2021 and 5.2% and 7.4% in 2022 in Ireland. Much of the recovery will be driven by consumer demand, as pent up demand and excess savings (gained through a year of constrained ability to spend) are released. Estimates by the Central Bank suggest that the Irish public has saved over €11bn (in Q3 2020), or closer to €20bn by Q1 2021. The Central Bank estimate that if 5% of this ‘excess savings’ is spent it could add up to 5% (or €5bn) to consumer spending over time, with this accounting for a significant element of overall GDP growth. This idea of ‘Revenge Spending’, effectively the idea that consumers will want to make up for lost time once lockdown restrictions are ended (pent-up demand), is a key driver of projections of a strong economic recovery post-Covid as seen in Figure 40. However, there is the risk that, depending on the type of recovery experienced i.e. weaker outlook, slower job creation, etc., households may potentially hold onto this savings to act as a ‘rainy day fund’. The Central Bank suggest that the majority of these savings has actually been made by the top 30% of households by income, and as such could be considered as deferred spending rather than precautionary savings.
Figure 39: Economic Outlook Projections Region
2019
2020
2021
2022
Global (World Bank)
2.3%
-4.3%
4.0%
3.8%
Global (IMF)
2.8%
-3.5%
5.5%
4.2%
-3.4%
5.6%
4.0%
EU (EU Spring 2021)
4.6%
5.0%
Ireland (ESRI)
4.4%
5.2%
Ireland (Department of Finance)
2.6%
7.4%
Global (OECD)
Source: As stated, based on information collated in May 2021
Figure 40: Consumer Spending/Private Consumption % Growth Organisation
2020
2021
2022
ESRI
-9.0%
6.7%
10.0%
Department of Finance
-9.0%
3.5%
10.4%
2023
3.2%
Source: As stated, based on information collated in May 2021
Economic Impact Assessment of the Design and Craft Sectors in Ireland
45
Future Forecasting
•
To reflect these economic outlooks, Grant Thornton has created a range of scenarios for the Craft and Design-Intensive sectors to estimate potential performance over the coming years. These are detailed below.
The Design-Intensive Outlook
The Craft Outlook A range of global literature profiles the potential of the sector, with each of these providing different rates of growth in terms of turnover. The literature considered are: •
•
•
Scenario A - Global Handicraft Market 2021-2025 (2021): This publication noted that the global potential of the handicraft sector could see the sector grow by €434 billion during the 2021 to 2025 period. As a result of this the sector will record growth of 13% per annum over the forecast period. Scenario B - Arts & Crafts Market 2021-2025 (2021): This publication focussed on the prospects of the arts & craft market globally and estimates the sector will see strong levels of growth over the coming years, with the main driver of the growth being the relative demand and strength of the sector among consumers. The report estimates the arts & craft market is to reach a global level of €43 billion by 2025 up from €37 billion in 2019, with the average growth expected to reach 3.9% per annum. Scenario C - This reflects the overall expected growth of consumer expenditure postCovid. The scenario anticipates that the Craft and Design-Intensive sectors will benefit from this growth accordingly. These estimates are based on the consumer spending from the Department of Finance and ESRI (Spring 2021 Economic Commentary). Growth in consumer expenditure post-2022 has been assumed to return to pre-Covid levels, with growth averaging 3.2%. It should also be noted this scenario has also been applied as part of the Design-Intensive scenarios.
Scenario D – This scenario provides context for the previous three and considers a growth path that follows the pre-pandemic trend, using average growth between 2012 and 2019.
To profile out the potential future trend of the Design-Intensive sector, Grant Thornton gathered up several pieces of literature which profiled the future potential of the sector, with each of these providing different rates of growth in terms of turnover. The pieces of literature considered were; •
Scenario A - Global Specialised Design Services Market Report (2021): This publication has noted that the global potential of the specialised design market, which will see the sector grow from €100 billion in 2020 to €147 billion in 2025, with growth averaging 8% over the forecast period. The report notes that this increase is a likely response of firms ‘rearranging operations and recovering from the impact of Covid-19’.
•
Scenario B - Global Industrial Design Market (2021): This report published on the prospects of the industrial potential of the design market, with their analysis suggesting that the market has the potential to grow to €58 billion in 2027 from €40 billion in 2020. They estimate that growth over the forecast period will average 5.3% per annum.
•
Scenario C - applies the same consumer expenditure growth levels as used as part of the Craft scenario.
•
Scenario D – applies the same approach as Scenario D applied in the Craft sector –the application of average growth between 2012 and 2019.
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Figure 41: Total Forecast Employment of Craft Industry Enterprises, 2012-2026 30,000
Scenario A
Scenario B
Scenario C
Screnario D
Total Employment
25,000 20,000 15,000 10,000 5,000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Figure 42: Total Forecast Turnover of Craft Industry Enterprises, 2012-2026
Craft Sector
€1.2
The first point to note is that all scenarios forecast varying degrees of growth for both the Craft and Design sectors in the coming years. This is in part an anticipated rebound from the challenging trading conditions imposed by Covid-19 responses globally to a return to normality.
€1.0
Employment across the four scenarios is forecast to grow by between an estimated 1,200 and 14,700 between 2020 and 2026 taking total employment of the sector up to circa 14,800 to 28,300.
Screnario D
€0.4 €0.2 €0.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Figure 43: Total Forecast GVA of Craft Industry Enterprises, 2012-2026 €0.45
Scenario A
Scenario B
Scenario C
Screnario D
€0.40
GVA
€0.35 €0.30
GVA (€bn)
GVA across the four scenarios is forecast to grow by between €20 million and €210 million and between 2020 and 2026 taking GVA of the sector to almost €500 million.
Scenario C
€0.6
Turnover Turnover across the four scenarios is forecast to grow by between €43 million and €500 million between 2020 and 2026 taking turnover of the sector to a point where it exceeds €1 billion.
Scenario B
€0.8
Turnover (€m)
Employment
Scenario A
€0.25 €0.20 €0.15 €0.10 €0.05 €0.00
Source: CSO, EUROSTAT, DCCI Annual Client Economic Survey, Grant Thornton Analysis
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Figure 44: Total Forecast Employment of Design-Intensive Enterprises, 2012-2026 70,000
Scenario A
Scenario B
Scenario C
Screnario D
Total Employment
60,000 50,000 40,000 30,000 20,000 10,000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Figure 45: Total Forecast Turnover of Design-Intensive Enterprises, 2012-2026 €12.00
As with the Craft sector, the forecasts for the Design-Intensive sector suggest a strong rebound from the challenges of 2019-2020.
€10.00
Employment Employment across the four scenarios is forecast to grow by between 13,000 and 24,400 between 2020 and 2026 taking total employment of the sector to a potential high estimate of 61,100.
Turnover (€m)
Design-Intensive Sector
Scenario C
Screnario D
€6.00 €4.00 €2.00
Turnover across the four scenarios is forecast to grow by between €2.3 billion and €4.1 billion between 2020 and 2026.
€0.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Figure 46: Total Forecast GVA of Design-Intensive Enterprises, 2012-2026 €4.0
Scenario A
Scenario B
Scenario C
Screnario D
€3.5 €3.0
GVA (€bn)
GVA across the four scenarios is forecast to grow by up to €1.4 billion between 2020 and 2026 to reach a potential total €3.6 billion.
Scenario B
€8.00
Turnover
GVA
Scenario A
€2.5 €2.0 €1.5 €1.0 €0.5
Source: CSO, EUROSTAT, Grant Thornton Analysis
€0.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Economic Impact Assessment of the Design and Craft Sectors in Ireland
48
Takeaways
Report title 49
Takeaways Economic Impact The Craft and Design-Intensive industries make a significant contribution to Ireland’s economy. 18,000 enterprises directly employ 54,000 employees, generate €8.3 billion in turnover and €2.9 billion in GVA pre-Covid. This amounts to 0.4% of Ireland’s turnover and 1.25% of total business sector GVA in 2018 terms. Design plays an important role in other sectors. ‘Design in Other Sectors’ contributed a further €48.5 billion in turnover and €17.7 billion in GVA, an increase from €5.1 billion in 2012. A further 51,000 people are employed in these Design activities in other sectors. Combined, all three sectoral definitions referenced in this report combine to contribute almost €53 billion of turnover and €20.6 billion in GVA, supporting 105,000 roles. This makes it equivalent to the information and communication sector (107,256) and not much smaller than the construction sector at 144,521. As a result, if considered to be one sector it would be the 8th largest in Ireland and would be equivalent to 6.7% of Ireland’s total business turnover of €794.7 billion in 2018. according to Business in Ireland 2018.
Growth The sectors have only now recovered to pre-2012 levels, indicating that, as with many other industries, it has been a long road back to where they were almost a decade ago, particularly in the Craft sector. Forecasts for a post-Covid recovery suggest that strong pent-up consumer demand will see a quicker bounce back. Analysis of economic growth projections indicates that the sectors could provide up to 100,000 employees and turnover of almost €14 billion by 2026. However, this growth can only be achieved through ensuring that the current supply shortage of skilled Craftspeople and Designers is addressed.
Covid-19
Brand Ireland The sectors’ influence is not limited to purely an economic contribution. Craft and Design are at the heart of global or ‘Brand Ireland’, enhancing Ireland’s attractiveness as somewhere to live, work and visit, and providing the country with a competitive advantage. They do so by showcasing the creative, innovative and entrepreneurial aspects of our people and combining the protection of old and development of new ways of sharing our enduring cultural heritage with the world. Ireland’s “brand value” was estimated to be $604 billion in 2019 by a report from Brand Finance, making it the fastest growing nation brand in Western Europe, 26th globally, and 2nd on a per capita basis.
As with all sectors, Craft and Design-Intensive businesses have been significantly impacted by the Covid-19 epidemic. 52% of survey respondents saw a year-on-year loss, combining to an estimated €1.6 billion turnover reduction. This is approximately 25% lower than in 2019. Approximately 4,000 roles have been lost during the pandemic. While the loss of tourists and general consumer footfall has hit consumer-facing businesses particularly hard, some have taken the ‘opportunity’ to embrace online sales channels, which are expanding market reach.
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Takeaways Sustainability and Community While the Craft and Design sectors play a valuable role in Ireland’s quantitative financial and economic wellbeing, it is important to highlight the further role that they play via less measurable or less tangible benefits to society. Sustainability is one such area, where our contemporary consumer society is increasingly aligned with the focus of Craft and Design activities to help ensure an ecological balance while maintaining the quality of life in modern societies. Concepts such as slow-fashion, locally-sourced and made, re-use, recycle and re-make can all be linked to the design and manufacture of products complying with a sustainable framework. The term circular economy, based on the principles of designing out waste and pollution, keeping products and materials in use and regenerating natural systems featured prominently in stakeholder consultations while the #MadeLocal campaign was seen as a tremendous success. The sectors also play an equally valuable role in unlocking opportunities through empowering local communities and supporting wellbeing in individuals. DCCI supported the Government’s “Keep Well” campaign during the Covid-19 pandemic by encouraging people of all ages and abilities at home to ‘switch off, be creative, and to learn something new’. Such engagement will continue to be a key area of focus for DCCI and the wider sector in the future.
Industry Sentiment Despite the challenges that the Covid-19 pandemic have brought, the overall sentiment of many within the industry is one of positivity. Terms such as ‘vibrant’, ‘potential’ and ‘renaissance were used to describe the Craft sector, while there was a suggestion that Design has ‘come of age’ in Ireland. New entrants have brought new ideas and the return to Ireland of many skilled Craftspeople and Designers to establish new enterprises indicates the perceived value and opportunity of the industry and the strength of the Irish brand. The necessity of the global pandemic has seen a move online has brought new opportunities to showcase products and generate sales through new routes to market, creating further optimism for the future.
Innovation
Sector Reporting
Innovation is the key to survival for business. It supports business through improving competitiveness via increased productivity, development of new or improved products, processes, services or business models and new markets for those products and services. Innovation also provides a pathway to a more sustainable future both for the economy and wider society. Winning by Design highlighted the relationship between Design and innovation, emphasising that ‘innovation cannot happen without design’ while the UK Craft Council found that firms that spend double the average on creative products are 25% more likely to introduce product innovations. Collaboration with creative industries, including Craft and Design, has a significantly positive impact on innovation within other companies.
DCCI should seek to work with relevant bodies and organisations to agree a clear definition as to what constitutes the Design and Craft sectors. They should then seek to engage with the CSO to explore the opportunity of working together to develop more regular reporting structures to allow for more consistent monitoring of the sectors’ performance and comparability across years. This will enhance the visibility of the valuable contribution made by the sector to Ireland. It will also assist DCCI in identifying key trends at any early stage, thus enhancing the role played by the organisation for clients, and the whole sector.
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Appendix
Report title 52
Appendix
List of Craft and Design-Intensive NACE codes
Sector
Both
NACE Codes Used
Sector
C3109 - Manufacture of other furniture
C2571 - Manufacture of cutlery
C3212 - Manufacture of jewellery & related articles
C2572 - Manufacture of locks & hinges
S9524 - Repair of furniture & home furnishings
C2652 - Manufacture of watches & clocks
C13 - Manufacture of textiles
C2740 - Manufacture of electric lighting equipment
C1411 - Manufacture of leather clothes
C3012 - Building of pleasure & sporting boats
C1413 - Manufacture of other outerwear C1414 - Manufacture of underwear
Craft
NACE Codes Used
C3092 - Manufacture of bicycles & invalid carriages Craft
C3102 - Manufacture of kitchen furniture
C143 - Manufacture of knitted & crocheted apparel
C3211 - Striking of coins
C15 - Manufacture of leather & related products
C3213 - Manufacture of imitation jewellery & related articles
C1723 - Manufacture of paper stationery
S9523 - Repair of footwear & leather goods
C181 - Printing and service activities related to printing C204 - Manufacture of soap & detergents, cleaning & polishing prep, perfumes & toilet prep C2319 - Manufacture and processing of other glass, including technical glassware C2312 - Manufacture of hollow glass
S9524 - Repair of furniture & home furnishings
C234 - Manufacture of other porcelain & ceramic products C237 - Cutting, shaping and finishing of stone C245 - Casting of metals C2562 – Machining
S9525 - Repair of watches, clocks & jewellery S9529 - Repair of other personal & household goods
Design Intensive
C1419 - Manufacture of other wearing apparel & accessories C1629 - Manufacture of other products of wood; manufacture of articles of cork, straw & plaiting materials J582 - Software publishing M711 - Architectural & engineering activities & related technical consultancy M741 - Specialised design activities
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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Appendix
Grant Thornton are grateful to the people who took the time to speak with our research team during the preparation of this report. Grant Thornton consulted with people from the following organisations: •
Department of Enterprise, Trade and Employment
•
Department of Foreign Affairs and Trade
•
Enterprise Ireland
•
Local Enterprise Offices
•
Western Development Commission
•
Tourism Ireland
•
Fáilte Ireland
•
Culture Ireland
•
Cork Craft and Design
•
GMIT: Galway-Mayo Institute of Technology
•
National College of Art and Design
•
Arts Council
•
Visual Artists Ireland
•
Benchspace
•
Design+ Carlow
•
Institute of Designers in Ireland
•
Approximately 15 Craft and Design businesses
Economic Impact Assessment of the Design and Craft Sectors in Ireland
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