Mobilising design for the green economy
Design Council Policy Briefing
Design Economy Policy Briefing 1 The Design Council
The design economy is one of the UK’s great assets.
Photo: David Butler. Credit: Mole Architects
The £97.4 billion design economy is growing at twice the rate of the UK economy as a whole.1 Our design skills – whether creating buildings, services or software – are sought after across the world.
The urgency of the climate and biodiversity crisis means the UK must harness this power of design to drive decarbonisation. Design will fuel the innovation which enables us to live within our planetary boundaries: from retrofitting buildings to developing infrastructure for electric transport, improving products’ energy efficiency, and driving the circular economy.
After the second world war, politicians were faced with the challenge of rebuilding the country. The result was a host of ambitious policies, including the creation of the Design Council, which shaped the next seven decades of public life and transformed millions of lives for the better.
Today a new generation must respond with urgency to the far reaching consequences of the climate crisis. With the right government support, design can help deliver a prosperous and equitable transition to a green economy based on local ingenuity and innovation.
Design Economy Policy Briefing 3 The Design Council
To harness design for the green transition we recommend that the government:
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Pilot three regional Zero Carbon Design Innovation Centres as accelerators of local green industrial renewal: To bridge the gap between research and real-world application of green innovation through design.
3
Roll-out progressive environmental regulation and incentives across all design sub-sectors: To align design’s economic value with environmental commitments.
2 Correct the R&D tax credit eligibility with a more expansive definition of design:
To scale up business investment in design-led innovation for net zero.
4 Create a National Design Education and Skills Plan: To ensure everyone can access high-quality design education and upskill for the green economy.
This paper has been developed by the Design Council, with recommendations based on the evidence generated through our Design Economy 2021 – 2024 research.
1.97m people work in the design economy 2
Workers with design skills are 47% more productive than the UK average
For every £1 a business invests in design, they see £20 return on that investment
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The design economy contributes, £1 of every £10 in UK exports 4
Design Economy Policy Briefing 5 The Design Council
What is design?
Design is:
A skillset turning ideas into action, and invention to application.
A sector driving innovation by creating user-centred solutions to real-world problems and making it easy and attractive to live sustainably.
A workforce representing 1 in 20 people in the UK5, working in productive and purposeful jobs across our economy.
The design economy includes:
Designers who work in design industries (e.g. product and industrial, advertising, graphics, fashion, digital design, architecture and urban planning).
Other roles in design industries, such as administration and communication roles.
Designers who work in other parts of the economy such as finance, marketing, and healthcare.
Workers who use design skills as a central component of their work in jobs such as civil. engineering.
What we mean by a ‘green economy’:
An economy which is…
Net zero: Producing no net carbon and greenhouse gas emissions.
Circular: Minimising waste and resource use through extended material lifecycles.
Regenerative: Has a positive impact on the planet, biodiversity, and people.
Equitable: In which all people benefit from economic progress.
Design Economy Policy Briefing 6 The Design Council
Credit: Daniel Faro
Pilot three regional public Zero Carbon Design Innovation Centres as accelerators of local green industrial renewal:
To bridge the gap between research and real-world application of green innovation through design.
Recommendation summary: DESNZ, DLUHC and UKRI work together to pilot three regional public Zero Carbon Design Innovation Centres within new Investment Zones and Net Zero Innovation Portfolio funded projects.
Delivering on the Nurse Review’s recommendation to optimise and increase the number of regional translational research organisations 6 , these pilot local Innovation Centres7 would build translational design and sustainability capacity within sites of existing governmental investment and level up access to the latest climate-based research. The Centres would build on existing local design strengths and serve two functions:
1. Enable the best net zero research to find a home in industry, by connecting local businesses to academic institutes, and supporting these businesses to use this new knowledge to drive design-led R&D which decarbonises their products and processes.
2. Work with local authorities and the public sector support public and place-based innovation, through better service and policy design grounded in leading climate research. The Centres could also support quality design within placemaking and local green transition strategies, enabling investment and talent ‘stick’ to the area.
The Centres would complement UKRI’s existing design-based investment Future Observatory’s8 Green Transition Ecosystems but focus on building practical green design capability specifically outside of design industries.
Rationale and context
The Government’s Innovation Strategy 9 champions design as a critical enabler of innovation. Design fuels our innovation system,
Design Economy Policy Briefing 8 The Design Council
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bridging invention and application10, de-risking R&D, and creating the quality places which investment needs to take root.
The environmental benefits of new ideas and technologies can only be realised when innovations are adopted and used11. More investment in discovery research alone won’t be enough to mitigate or adapt to climate change. Design enables successful late-stage R&D that drives sustainable industrial and behaviour change and will therefore be foundational to accelerating the impact of net zero innovation investment12
The UK is already home to centres of world-leading design excellence, from industrial design in East Renfrewshire and Tameside, to Reading’s and Belfast’s thriving digital design industries.13 These clusters can help catalyse R&D in sectors and regions of our future economy, such as digital, clean transport, and the circular economy.
Clusters are about more than geographic proximity, they are about local relationships, neighbourhoods, and identity. Strategic use of design can improve the quality of places, enabling for investment and human talent to ‘stick’ to a regional centre, supporting green and equitable local economic regeneration.
Supporting asks
Strengthen design leadership within innovation
infrastructure: Existing innovation agencies from ARIA to Office for Science and Technology Strategy and the Catapults should explore employing a Chief Design Officer14; local authorities should consider employing a Chief Place Officer.
Design Economy Policy Briefing 9 The Design Council
Credit: Pattern Project
Reform R&D tax credits by correcting eligibility and incentivising green innovation:
To scale up business investment in design-led innovation for net zero.
Recommendation summary: HM Treasury expand tax credit eligibility by adopting the globally accepted definition of R&D within the OECD’s Frascati Manual.
To increase private sector investment in R&D, and to support innovation which drives sustainable behaviour change, tax reform for design’s contribution to R&D is needed. The definition of R&D and eligibility criteria within the UK’s current R&D tax credit system undermines design’s role in innovation and R&D for behaviour change.
Adopting the Franscati Manual within the UK’s R&D tax system would enable UK businesses to work on a level playing field with design innovators in Denmark, Germany, South Korea, France, and Italy. Incentivising design within R&D will benefit the UK’s design sector directly, supporting design businesses to innovate and strengthening the market for R&D design services, as well as improve the quality and market success of innovation activities in the wider economy.
Design Economy Policy Briefing 10 The Design Council
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Credit: Duku
Transitioning to a green economy will require all UK businesses to transform their business models, products, and supply chains. The current redesign of the UK R&D tax credit system15 is an opportunity to roll out a green R&D ‘uplift’, topping up the SME deduction rate by an extra 20% for activities which create positive climate impact16.
Rationale and context
Design is a driver of profitability, innovation, and R&D within UK businesses. 42% of design workers carry out innovation-related activities such as R&D, compared to a 6% UK average17. Across the wider economy, 1 in 5 businesses say design is integral to their innovation process. Design-active businesses are more likely to be market innovators, anticipate growth, and have a long-term net zero strategy18 .
UK R&D tax credits are valued by the UK’s design economy. Design businesses – 92% of which employ under 10 people –are R&D intensive. However, in current R&D tax credit guidance, design’s role is fragmented and under supported. ‘Design’ as defined within current guidance represents the relatively narrow field of design engineering, and leaves out industrial, service, packaging, and UX design vital to business innovation.
Many of the most important functions of design within R&D are undermined by the current guidance’s exclusion of social sciences. Without human-centred design innovative products often fails product market fit and don’t successfully support user and behaviour change19, vital in the context of the climate crisis.
Supporting asks
Drop the exclusion of Arts, Humanities and Social Sciences (AHSS) projects from BEIS guidance20, so that all design businesses are eligible.
Refresh the IP system so that it is easier and cheaper for designers to protect their innovations, together with creating licensing business models that enable designers to share green innovations around the world for others to build on21.
Boost design exports by increasing international business development funding for design businesses, mirroring UK Global Screen Fund or MEGS.
Design Economy Policy Briefing 11 The Design Council
Roll-out progressive environmental regulation and incentives across all design sub-sectors:
To align design’s economic value with environmental commitments.
Recommendation summary: DESNZ and DEFRA should audit legislation in all design sub-sectors, assessing their alignment to environmental targets, then roll out updated or new green regulation and standards across the whole design economy.
The audit should pinpoint where existing regulation can be ‘retrofitted’ to align with the UK’s net zero strategy22 and wider targets such as biodiversity and resource use, and where there are regulatory gaps for design which need addressing urgently.
New policy should focus on targeting the regulation ‘upstream’ at the performance-standard requirements23 which influence the design and commissioning stage of a product or building’s development, so that negative environmental outcomes can be ‘designed-out’ from the outset.
Rationale and context
With 80% of the environmental impact of any new product determined at the design stage24 and 25% of the UK’s carbon footprint coming from the built environment25, it is critical that design’s economic value is realigned with the government’s own environmental targets and our planetary boundaries.
However current environmental regulation is highly fragmented across design sub-sectors and between UK nations. There are already several good environmental standards in place, from the National Planning Policy Framework in the built environment, to Ecodesign standards in electrical products. The UK government needs to build on these precedents to ensure consistent and authoritative regulation across all design-subsectors and industries – from fashion to packaging design.
Design commissioners and investors need clear, progressive, and modern regulation and standards to take advantage of net
Design Economy Policy Briefing 12 The Design Council
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zero opportunities26. Regulation can create and shape markets, directing innovation efforts where they are most needed, and tilting the playing field so that green design isn’t undercut by climate laggards.
Supporting asks
Implement existing standards effectively: Regulations like Extended Producer Responsibility, the ‘environmental net gain’ principle, Ecodesign standards, Future Homes and Buildings Standards, and the ban on single use plastics; need expediting with firm enforcement, and then expanding on fixed timescales.
Implement eco-labels, including indicators for durability and repairability widely, using a design-led approach to ensure that future labelling schemes meet consumer needs.
Explore Mandatory Product Standards and embodied carbon limits for a wider range of products, such as clothing, technology, and white goods.
Leverage public procurement by introducing top-of-thefield carbon, biodiversity, and resource efficiency metrics into public sector commissioning, pump-priming the emerging private sector market for regenerative and green design.
Design Economy Policy Briefing 13 The Design Council
E-waste being processed.
Credit: Fairphone
Create a National Design Education and Skills Plan:
To ensure everyone can access high-quality design education and upskill for the green economy.
Recommendation summary: The Department for Education must commit to creating a National Design Education and Skills Plan, with a roadmap for repairing the decline in GCSE D&T by 2030 and targets for green design skills development.
The National Design Education and Skills Plan 27 for England should include curriculum change, teacher retention strategies, investment for materials and machinery, and reforms to Ebacc and Progress 8 28. Design skills should also be fostered across the wider curriculum to ensure all young people are getting a great design education, equipping themselves for the green jobs of the future.
Within adult education, the Department for Education and the Green Jobs Delivery Group should review a) green skills gaps within the design, and b) green design training gaps within FE and technical education, and create an action plan that enables more adults to train as designers, or improve their design skills with CPD, so that they can contribute fully to the green economic transition.
Design Economy Policy Briefing 14 The Design Council
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Credit: The Design & Technology Association
Independent plans may be created by the Scottish Government, Welsh Government and The Northern Ireland Executive.
Rationale and context
Over the next decade, as we transition to a green economy, there will be a huge demand for people with a blend of technical, creative, and critical thinking skills29 – in other words, people with design skills. Workers with design skills are 47% more productive than the UK average, generating an extra £10 per hour in GVA30. Design skills will be the foundation of many great, green jobs. Therefore, it is critical that the government strengthens design education and training.
Studying design at school is a crucial talent pipeline – seven in ten of today’s designers have studied design at GCSE level. However, entries to Design and Technology GCSE in England have declined a staggering 68% since 2011, a far faster rate than in the rest of the UK31. This presents an urgent risk to the UK’s future workforce. There are currently too few incentives to teach or study design at school.
By 2030, 80% of the current workforce will still be active. Today, an estimated 59,000 people working in design industries already have skills gaps, together costing the UK £5.9bn per year. Skills shortages in design are some of the highest in the creative industries.32 With 25% of designers being self-employed and 92% of design businesses employing under 10 people, there is little industry resource for upskilling33
This is worrying for the UK economy: design industries like Architecture and Industrial Design are critical to achieving net zero, and design skills help future-proof jobs from climate-related economic transitions and automation34.
Supporting asks
Resource designers to upskill: CPD should be freeto-access and accredited for small design firms. The implementation of the Lifelong Loan Entitlement should be brought forward, with additional bursaries for freelancers, returners and transferers.
Secure international talent: Reform eligibility for the High Potential Individual visas to include leading design schools35 and introduce a skilled freelancer visa route36
Design Economy Policy Briefing 15 The Design Council
“Sustainable
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development demands good design. We won’t win the battle against climate change unless we design the solutions. It is good design which will enable us to use the smallest amount of our resources as is possible, that will enable us to reuse, that will enable us to extend, that will enable us to be flexible, that will enable us increasingly to grow – but to grow in a way that is not at the expense of others and the planet.”
Lord Deben, Chairman, independent Committee on Climate Change
Design Economy Policy Briefing 17 The Design Council
“Design is crucial whatever you do in the United Kingdom, whether you’re in business, the civil service or education. I’ve seen from my own experience as the founder of Cobra beer, how important design has been from day one. There is a huge opportunity to educate businesses about the benefits of design and to use design more.”
Lord Bilimoria President, Confederation of British Industry and Founder of Cobra Beer
Endnotes
1 Design Council (2022), Design Economy, (designcouncil.org.uk)
2 Design Council (2022), Design Economy, (designcouncil.org.uk)
3 Design Council (2012), Design delivers for business, (publishing.service.gov.uk)
4 Design Council (2012), Design Economy, (designcouncil.org.uk)
5 Design Council (2022), Design Economy, (designcouncil.org.uk)
6 Department for Science, Innovation and Technology and Department for Business, Energy & Industrial Strategy (2023), Independent Review of the UK’s Research, Development and Innovation Organisational Landscape, (publishing.service.gov.uk)
7 Zero Carbon Design Innovation Centres would draw on the proven success of UKRI programmes like Design for Growth, and government initiatives the five Local Net Zero Hubs, and could be aligned to initiatives like the three regional Innovation Accelerators.
8 UKRI (2022), Designers unite to meet climate challenges through £25m fund, (ukri.org)
9 Department of Business, Energy and Industrial Strategy (2021), UK Innovation Strategy: leading the future by creating it, (gov.uk/ )
10 Design Council (2014), Innovation by Design, (designcouncil.org.uk)
11 Innovate UK (2020), Design in innovation strategy, 2020-2024, (gov.uk)
12 Department for Science, Innovation and Technology (2023), UK Science and Technology Framework, (gov.uk)
13 Design clusters are areas with above average concentrations of design employment and/or design businesses.
14 Chief Design Officers hold strategic direction for design practice in an organisation. See also: James Pallister (2015), The secrets of the Chief Design Officer (designcouncil.org.uk)
15 Including HM Treasury (2023), Research and Development reform — Consultation on a single scheme, (gov.uk)
16 As outlined by the CBI (2023), Spring budget submission, (cbi.org.uk)
17 Design Council (2018), Designing a Future Economy, (designcouncil.org.uk)
18 Design Council (2023, forthcoming), Business understanding of design
19 Interaction Design Foundation (2023), What are Affordances? (interaction-design.org)
20 The Creative Industries Policy and Evidence Centre (2021), Representation for the 2021 Spending Review, (pec.ac.uk)
21 Intellectual Property Office (2022), Calls for views on designs, (gov.uk)
22 HM Government (2021), Powering Up Britain: The Net Zero Growth Plan, (gov.uk)
23 As opposed to design-based standards which specify the use or exclusion of certain materials and design choices, which can act to limit innovation. As described by UCL Green Innovation Policy Commission (2021), Innovation for a Green Recovery: Business and Government in Partnership, (ucl.ac.uk)
24 European Commission (2023), Sustainable Product Policy ( joint-research-centre.ec.europa.eu)
25 UK Green Building Council (2023), Climate Change Mitigation, (ukgbc.org)
26 UCL Green Innovation Policy Commission (2021), Innovation for a Green Recovery: Business and Government in Partnership, (ucl.ac.uk)
27 Following the example of the National Plan for Music Education.
28 Edge Foundation (2023), Curriculum and Assessment – Broad, Innovative, Multimodal, (edge.co.uk)
29 Kingston University London (2022), Future Skills, (kingston.ac.uk)
30 Design Council (2022), Design Economy, (designcouncil.org.uk)
31 Design Council (2022), Design Economy, (designcouncil.org.uk)
32 House of Lords Communications and Digital Committee (2023), At risk: our creative future, (parliament.uk)
33 Design Council (2022), Design Economy, (designcouncil.org.uk)
34 World Economic Forum (2018), The Future of Jobs Report, (weforum.org)
35 See also the Creative Industries Policy and Evidence Centre (2021), Representation to the Autumn Spending Review, (pec.ac.uk)
36 See also Creative Industries Policy and Evidence Centre (2023), Post-Brexit migration and accessing foreign talent in the Creative Industries, (pec.ac.uk)
Design Economy Policy Briefing 18 The Design Council
About the Design Council
The Design Council is the UK’s national strategic advisor for design, championing design and its ability to make life better for all. It is an independent and not for profit organisation incorporated by Royal Charter. The Design Council uniquely works across all design sectors and delivers programmes with business, government, public bodies and the third sector. The work encompasses thought leadership, tools and resources, showcasing excellence, and research to evidence the value of design and influence policy. Their Design for Planet mission was introduced in 2021 to galvanise and support the 1.97 million people who work in the UK’s design economy to help achieve net zero and beyond.
For questions and feedback, please contact Matilda Agace, Senior Policy and Advocacy Manager, Design Council: matilda.agace@designcouncil.org.uk
