design innovation and societal challenges

DESIGN INNOVATION AND SOCIETAL CHALLENGES

PART 1. The DESIGN INNOVATION INITIATIVE

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PART 2. REGIONAL DIMENSIONS OF DESIGN

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(Studies from creativwirtschaft austria, DG Regio about Structural Fonds)

PART 3: SMEs INNOVATING DIFFERENT

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PART 4: SMEs ARE FUTURE FACTORIES

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Design Innovation and young talents for European companies

By building micro factories to bring manufacturing back to Europe

This report is a anthology of different texts from the research compiled by Gerin Trautenberger (Microgiants GmbH) as a design consultant and according to his work at the European Design Innovation Initiative.

Gerin Trautenberger works since 1992 as art- and creative director in different companies and countries. In 2005 he founded with friends microgiants and specialised in Product-, Service design and consulting Studio. He also works as a curator for the vienna city government and telco companies. He is Vice-president of the creative industries austria (chamber of commerce). Since 2011 he is a member of EDII, a initiative to consult the EU-Commission in Design Innovation.

WESTBAHNSTRASSE 9/33B A - 1070 VIENNA FON +43-1-526 60 66 FAX +43-1-526 60 669 MAIL OFFICE@MICROGIANTS.COM WWW.MICROGIANTS.COM FN 251543T UIDSeite ATU 61192248 1/ 17 HG WIEN BANK ERSTE BANK 28238152700 BLZ 20111 IBAN AT832011128238152700 BIC GIBAATWWXXX

PART 1. The DESIGN INNOVATION INITIATIVE The Design Innovation Initiative and its Leadership Board was founded 2011 in line with the commitment of the Innovation Union, to exploit the full potential of design for innovation. Beyond the recognised drivers of innovation in other policy domains, such as education and entrepreneurship, some countries in the EU and beyond have started looking at drivers of innovation not previously examined in a policy context. Notably, some of Europe's leading innovation nations have included user-driven or user-centred innovation as cornerstones of their national innovation strategies. It is seen as a way of providing innovative products, services and systems that correspond better to user needs and therefore are more competitive. The same countries that explore the potential of userdriven or user-centred innovation are leading nations as regards the development of national design policies. User-driven innovation is often closely associated with design, and involves tools and methodologies developed and used by designers.

The European Design Leadership Board was set up to steer the The Design Innovation Initiative. To ensure the crucial link between design and innovation, the Board is composed of members with diverse backgrounds (i.e. business sector, higher education, designers, national and regional agencies promoting design and innovation).

The goal of the initiative is to raise awareness about design as a driver of innovation in Europe. The goal is to enhance the role of design as a key discipline to bring ideas to market. Design transforms ideas into user-friendly and appealing products, processes or services.

As stated by the European Commission, the task of the Leadership Board is: “A particular importance of design as a key discipline and activity to bring ideas to the market, has been recognised in the Innovation Union, Europe’s 2020 flagship initiative. In line with the commitment taken in the Innovation Union, the European Commission will launch in 2011 the European Design Innovation Initiative to exploit the full potential of design for innovation and to reinforce the link between design, innovation and competitiveness.”

The first Report of the EDII Leadership Board on Design Innovation will be presented in the second half of 2012. The following text gives a short overview of the discussions and analyses made in the Leadership Board. Our work has focused on how design innovation and user centred design can be used to meet current societal challenges.

Responding to the crisis The starting point for the discussions in the European Design Leadership Board is that Europe faces a severe financial and economic crisis.Through the crisis, structural weaknesses in Europe's economies have become visible. The crisis has wiped out years of economic and social progress, and it is now vital to get get Europe ,back on track‘1.

We argue that an important response to the crisis must be to focus on the critical role of innovation in delivering smarter, sustainable and inclusive growth.

1

Document the Innovation Union 2020

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Technology-led development has contributed profoundly to the growth and competitiveness of the European economy. Today, we face a situation of shrinking or even disappearing technology gap between Europe and its main competitors, not least in Asia. Earlier, European growth depended on technology-led innovation, low production costs and the proximity of markets. Today, Europe's ,broader expertise‘ will be needed in order to meet the challenge of increasingly competitive countries elsewhere, including the BRICS economies.

As a consequence of the economic crisis, there has been a significant reduction of funding available for innovation. At the same time, European nations are facing the highest recorded levels of general and youth unemployment for decades.

Leadership Board on Design Innovation concludes that the complex economic and societal challenges faced by Europe call for new approaches and solutions. We argue that Europe must focus on ensuring „a distinctive European design innovation capability that delivers attractive, desirable and sustainable products and services that can compete on the global stage“. We also call for „public services that deliver new perceptions of what is possible in the user-centred, design-led, public-sector procurement and innovation of services“.

Design in innovation (people centred approaches) The Leadership Board on Design Innovation agrees with the conclusions of the Competitiveness Council meeting held in Brussels in May 2010. This Competitiveness Council meeting showed that non-technological innovation, including design, (for both products and services), as well as culturebased creativity, are important tools for competitiveness and growth in the quality of life for the citizens of Europe2.

The Leadership Board takes note of a large number of European studies and reports written over the past three years that have explored and communicated design’s power to make a difference.3 From these documents, it is clear that design as a driver of innovation contributes to getting good ideas to market. Design enhances agile and focused product and service development. This can be strengthened and made more effective through good design management. Design facilitates the development of better, transparent and more effective public services and contributes to social innovation, thereby raising the quality of life for all the citizens of Europe. And, maybe most importantly, for complex societal problems, design offers people-centred approaches that can achieve better solutions.

The Leadership Board on Design has also looked at the level of design practice, where the role of design and the designer is also expanding. Traditionally, designers have often been associated only with product styling. Nowadays, designers contribute at a number of different levels ranging from strategic business direction and design management to the conceptual design, design development and production of user-centred products and services for the private and public sectors. This extends onwards to user communications where, instead of the product or service driving the process, it is the users and the design process which lie at the heart of contemporary problem solving.

The Leadership Board on Design will argue that there is an outstanding opportunity and an urgent need for Europe to grow its design innovation capacity to develop and promote products and services that are distinctive, user-driven and sustainable. Construed in this way, design can be understood as a distinctive, competitive advantage of Europe.

Conclusions on Creating an innovative Europe. 3016th Competitiveness Council meeting. Brussels, 26 May 2010 pp4 (II,5) 2

3

Commission staff working document ‘Design as a driver of user-centred innovation’,7.4.2009, SEC (2009) 1198 final.; INNOGRIPS MS05- Design as a tool for innovation 2009; Seite 3/ 17

And there is already a foundation upon which we can usefully build. This includes not only the resources and networks available within Europe’s existing design landscape, but also the current actions of the Commission at the European level.

The Innovation Union – existing actions for design The Leadership Board on Design expands on already existing actions for design. Under the name „The Innovation Union“, we would like to see a union that is committed to a wider definition of innovation within which design is recognised as an important driver of user-centred innovation, drawing upon the innovative and creative talents of Europe’s small businesses and entrepreneurs that lie at the heart of Europe's strategy for growth.

The Commission is already giving special attention to design, considering its leverage effect on innovation performance in order to maintain the economic foundation that supports our quality of life and our social model.4 As a consequence of design’s inclusion in the Innovation Union, the Commission set up the European Design Initiative in 2010. The European Design Leadership Board has been constituted as a key part of that initiative and within it the Commission has also already launched and awarded, (in 2012), four projects within a unique design Call, ‘Joint Actions for Non-technological, User-centred Innovation.’

In parallel, the Commission is currently pursuing actions aimed at growing the European Creative Industries within which design is a significant player. The European Creative Industries Alliance was launched in December 2011.5 The initiatives of the Commission are engaging a variety of actors within the existing European design landscape.

4

The Innovation Union

5

Creative Industries Alliance

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PART 2. Regional dimension of design (Studies from creativwirtschaft austria, DG Regio about Structural Fonds)

The Ecology of the Creative Industries and Design Business in Austria Every second year, the Creativwirtschaft Austria (cwa) publishes a report about the situation of the Austrian creative industry. The third report is entitled „Contribution of the Creative Industries to the Innovation System in Austria”. According to this report, 10 percent of all companies in Austria belong to the creative industries.

As measured by the number of employees, their share, however, is considerably lower and only amounts to 4.4 percent of the total number of employees on the Austrian labour market. This is partly due to the small average company size, but it is also a result of the high share of self-employed workers, including freelance workers. If self-employed and freelance workers are also taken into account, the number of people working in the creative industries is significantly higher.

In the year 2007, the Austrian Creative Industries–based on the definition in the “Second Austrian Report on Creative Industries”–encompassed about 33,453 private sector enterprises with approximately 111,746 employees.

The average company size is 3.3 employees per firm. In 2007, the sector yielded revenues of EUR 21.3 billion. The revenues and profits per employee amounted to approximately EUR 190,000 in 2007 and the gross value added amounted to EUR 8.4 billion.

Concentration in Urban Locations The strong scientific orientation of creative industry enterprises, which results from the high share of employees with university degrees and the frequent co-operation with scientific institutions, is reflected by the location pattern of the creative industries. About half of all creative industry companies in Austria are located in one of the university cities Vienna, Graz, Linz, Salzburg, Innsbruck, and Klagenfurt, with more than 30 percent of the creative industry firms located in Vienna.

Structural Funds: The Creative Motor for Regional Development As one of the first EU Member States, Austria carried out a study about cultural and creative industries within the framework of the current EU-funded regional programs. The study “The Creative Motor for Regional Development“ was published by an organisation called „österreichische kulturdokumentation“ (i.e. „Austrian Cultural Documentation“).

The study commissioned by the Federal Ministry for Education, Arts & Culture “The creative engine for regional development – arts and culture project and the EU Structural Funds in Austria” was presented on 10 November, 2011. The study demonstrated for the first time that the EU funds for arts and culture contribute to regional development in Austria and support the creative industries. “Arts, culture and creative industries create added value for European regions. They are engines of economic dynamism, show above average growth, encourage creativity, innovation and entrepreneurship, attractiveness, quality of life, wellbeing and cultural diversity. It is important that this central role of culture makes is visible in the regional development, and highlight the potential to improve access of cultural projects to structural funds”, said Minister of Culture Claudia Schmied6.

The study very clearly demonstrates the mutual benefits of culture and regional development: the structural and regional supports benefit culture by facilitating diverse, regional and cross-border arts and culture projects and supporting the creative industries; culture promotes structural and regional development by encouraging the attractiveness of locations, cohesion and employment opportunities in the regions. This mutual benefit is currently too little recognised and developed. It must be essentially more broadly

6 (via.http://www.ifacca.org) The Study was edited by the authors Veronika Ratzenböck, Xenia Kopf und Anja Lungstraß for the Institut österreichische kulturdokumentation. internationales archiv für kulturanalysen.

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communicated and anchored in the coming support period from 2014 to 2020 in order to better exploit the potential of culture for regional development and vice versa in the future.

PART 3: SMEs INNOVATING DIFFERENT Design Innovation and young talents for European companies

Innovation processes in small and medium sized companies (SME) are very different from the well known innovation processes of technology driven large companies. Small teams or even single individuals in small companies are often involved in incremental innovation processes with a steady step-by-step process of constant change. As recent studies have shown, for successful companies design is a key element in their daily business. Innovation applies ideas and new knowledge to the production of goods and services, with the goal to improve product quality and process performance. In this way, even radical innovations can be fostered in SMEs environments with their specialists and skill workers. These professionals are responsible for internal innovation processes of their small companies. In traditional economies, these companies take the responsibility to train and educate new talents.

Educational systems based on apprentices and with well-developed vocational education help these SMEs. It shows also that in member states where the responsibility between state and enterprises for the vocational system is shared the unemployment rate among young is way below the european average of the general unemployment rate.

Most R&D and innovation activities happens outside high-tech companies The PILOT study (Policy and Innovation in Low-Tech) 7 from the PILOT Project Consortium shows that 97 percent of R&D and innovation activities in Europe are carried out by mid- and low-tech companies and not as commonly perceived by the high-tech sector alone. „According to the OECD, the “High-Tech Sector” is defined as industries with an R&D share in turnover of more than 4%. This sector counts even in highly developed economies for about 3% of the GDP. That means 97% of all economic activities and most of the innovative processes in Europe, but also in the US, happened in sectors defined by the OECD as “Mid-Tech” or “Low-Tech”.

Most innovation and development activities are carried out by mid- and low-tech Companies. SMEs constitute 99 percent of all enterprises in Europe. The group of SMEs is made up of small companies, micro companies and companies with 100 to 250 employees.

Most innovation is founded on non-scientifically based R&D On the European as well as on the national level, the so-called high-tech, research-intensive and sciencebased industries are often perceived as the key drivers of future economic prosperity. In the narrow definition of innovation used by the OECD (2005) and the Frascati Manual8, only knowledge based scientific work can be counted as R&D. Companies within the crafts, trades, design and production sector usually cannot carry out their own R&D and are therefore defined as mid- or even low-tech. These MLT companies, even when they are highly productive and have a large capacity to innovate they are by definition not high-tech companies and are not able to generate fundings for their innovation processes.

In contrast to high-tech companies, most of the SMEs innovation process are:9

7 Find

more on the Pilot Project at: http://www.pilot-project.org

8 definition

of R&D used by the OECD (the so-called Frascati Manual)

9 PILOT Study, http://www.pilot-project.org

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• • • • •

based on available technologies, which are used in a new and sophisticated way; based on the experiences and the knowledge of persons in and around the company; supported by highly qualified employees and the entrepreneurial spirit of the business owner; based on highly flexible, but long lasting, costumer and supplier relations; supported by existing networks and clusters.

A supportive policy for innovation, especially in the SME sector, has to recognise these drivers for innovation and needs a quite broad approach to enhance the capacity of SMEs to innovate and become more competitive.

Linking innovation to design to user-centred innovation (Rewrite) The Commission Staff Working Document ‘Design as a driver of user-centred innovation’, SEC (2009) 50110, gives an view of the relationship between design, innovation and competitiveness by presenting design as linking creativity (the generation of new ideas) to innovation (the successful exploitation of new ideas), as it ‘shapes ideas to become practical and attractive propositions for users or customers’.

‘Creativity’ is the generation of new ideas – either new ways of looking at existing problems, or of seeing new opportunities, perhaps by exploiting emerging technologies or changes in markets.

‘Innovation’ is the successful exploitation of new ideas. It is the process that carries them through to new products, new services, new ways of running the business or even new ways of doing business.

‘Design’ is what links creativity and innovation. It shapes ideas to become practical and attractive propositions for users or customers. Design may be described as creativity deployed to a specific end. 11 The model below shows the mapping of this relationship. Creativity and design play a role as inputs to innovation, but they can also have a direct effect on productivity and business performance, through process design, branding and marketing.12

Innovation in SMEs Business turns Ideas into Value Design is a cornerstone of the overall innovation process of companies. As recent studies have shown, for successful companies design is a key element in their daily business. Innovation applies ideas and new knowledge to the production of goods and services, with the goal of improving product quality and process performance. It is a driver of renewal and growth in an organisation and hence also in the wider economy.13 The “Design Ladder Study“ 14 that was carried out in Sweden, Denmark and Austria a few years ago has shown that companies which use design as a strategic business tool are better organised, have better turn-overs and are creating products which are more user-centered.

Skill Workers and Professionals are the Movers of Innovation Today, the innovation processes and the creative work of small and medium sized companies are usually lead by professionals. In micro-enterprises, these professionals are often the owners of the company – the craftsperson and/ or a state certified master themselves. In small companies with two ore more employees the 10 Commission Staff Working Document ‘Design as a driver of user-centred innovation’, 7 April 2009, SEC (2009)501, p. 16.

11 Cox, G., (2005) ‘Cox Review of Creativity in Business: building on the UK’s strengths’, HM Treasury, 2005.

12 Swann and Birke (2005) in UK Department for Industry and Trade (DTI), 2005.

13 Design Council, www.designcouncil.co.uk 14 Design Ladder, http://microgiants.com/beratung-studie/studie-die-osterreichische-designleiter-2

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innovation processes are owned by skilled workers, specialists or graduated engineers. Most skilled workers bring some degree of expertise to the performance of a given job. They have gained their expertise and professional knowledge in a collage, at a technical school or have learned 'on the job'. In only a few cases, these skill workers are academically trained professionals. These skilled workers are managing the step-bystep learning curve and incremental innovations of smaller enterprises.

The Innovation in Crafts can be Characterised as NEW CRAFT and is Learning by Doing The crafts businesses in the overall small and medium sized company landscape are characterised by small and micro entrepreneurship. In contrast to the traditional crafts, the new way of craftsmanship is innovative and lead by design. The UK Crafts Council describes these creative entrepreneurs as „....highly qualified makers, practitioners, researchers and innovators...“ who are „.. grounded in an educational experience that involves learning by doing. They largely operate independently in an ever-changing landscape of micro-businesses and freelance work which characterise the crafts sector. Innovation, high quality, authenticity and aesthetic value are important characteristics of the contemporary crafts output“.15 Highly sophisticated and driving innovation - This is a changed perception and

new way of working as a craftsman or artisan and has been labelled as the NEW CRAFT. In new craft „the skills and knowledge learned through making are still well regarded by crafts graduates.16 Shortage of Skilled Labour Across Europe, economic data shows that production and the added value of manufacturing17 is decreasing.

Production and manufacturing in Asia seems financially more viable than investing in European production. As a consequence, the employment of skill workers is declining in Europe. Financial Times recently wrote about the shortage of skill workers: “A recent study by PwC, the accounting firm, shows that family-owned German companies see labour shortages as their greatest challenge in the recovery.“ 18 of the recent crises.

The dilemma is that on the one hand the industry is out-sourcing production facilities and processes out to the Far East, and on the other hand skill workers and professionals are needed for local innovation processes and new product development. The lack of new professionals and skill workers is already evident at all stages of production.

In counties like Germany, Austria and Switzerland, the labour market might be better geared to meet this challenge than labour markets in other European countries. These countries have well developed systems of apprenticeship, that are able to guarantee a young generation of skill workers. In these German speaking countries the unemployment rate of young people is well below the European average. In fact, youth unemployment is lower in these countries than general average unemployment in Europe.

Apprenticeship as an Answer to the Shortage of Young Talents in Europe This system of vocational training is based on part time education in an school and part time learning-by-doing at a workplace. It is a social contract between the state based educational system and companies. All partners involved profit from this partnership between schools and companies. The company gets trainees who are working – the trainees can qualify for the profession by learning on the job. The state profits by having to carry only half of the responsibility for this educational system.

In certain sectors of the economy this partnership of companies and the state in vocational education has no tradition, or the companies are not able to take on apprentices. In these cases, vocational training centers19 are organised by the state to fill the gap. In this system, every trainee is guaranteed a certification for his profession at the end of the vocational training.

The vocational training and education is for most of the skill workers and craftspersons a milestone in their personal development and professional life. Unfortunately, these curriculums are deployed only for professional 15 http://www.craftscouncil.org.uk/files/file/cd68904f6f59df22/crafting-futures-executive-summary.pdf 16 http://www.craftscouncil.org.uk/files/file/cd68904f6f59df22/crafting-futures-executive-summary.pdf 17 tab OECD at the end of the dokument 18 http://www.ft.com/cms/s/0/f8a5005c-f7ea-11df-8d91-00144feab49a.html#axzz1qKAeiq00 19 Jugend am Werk:“HIGH QUALITY APPRENTICE TRAINING ACCOMPANYING PERSONS WITH DISABILITIES“

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work, persons who would like to go on with their schooling are blocked from any higher education and academic qualification. The aim for all qualification systems should be an easy interchangeability/alternation and easy access to other stages of education - especially to higher education.[CASE] The President of the European Commission Jose Barosso togehter with the Austiran Cancler Feyman on the 5th of march 2012 came to see the successful austrian example of vocational education organisation „Jugen am Werk“. Today, the "Jugend am Werk Berufsausbildung für Jugendliche GmbH" trains about 1.500 young men and women per year who have been unable to find an apprenticeship on the open job market and offers a wide range of courses for vocational training and qualifications: The vocational training centres for young persons offer apprentice-training courses for vocational training in a large number of professions. In addition to that, apprentices from other companies can also complete certain training modules workshops within the framework of “inter-company apprenticeship training”. For disadvantaged or disabled young persons, a scheme called “Integrative Vocational Training” is offered, where it is possible to extend the apprentice training courses, accompanied by special trained “Vocational Training Assistants”.

Facts and figures about the austrian vocational system • In total, up to 4.500 young people attend the “supra-company training programmes” in the City of Vienna that is also a federal state in Austria. These programmes are funded by the Public Employment Service and the City of Vienna (2011: 90 million Euro).

• The overall drop-out-rate in these programmes is about 30 percent. (at this workshop: lower than 10 percent) • About 85 percent of the apprentices are satisfied or well satisfied with their training.

• About 80 percent of the apprentices pass the final exam of their apprenticeship training at their first attempt. (at this workshop: 99 percent) • Up to 75 percent of the apprentices find a job immediately after their training or after their military service/ community service.

Apprenticeship and Mentoring in Creative Industries and Design Sector When vocational training is only organised by the state and not by the companies, there will be a lack of „training on the job“ under real conditions. Therefore systems of Apprenticeship with its special mentoring and learning-by-doing for young trainees is the only option to pass on traditional crafts methods and procedures.

[CASE] The established apprenticeship system of the LVMH and its maisons is a case in point. As example the perfumers at Guerlain are trained in the 5th generation by their predecessors on all manufacturing processes and in specific the sourcing of raw materials and natural ingredients. The Apprenticeship is key for LVMH and its maisons. The group signed in France the Apprenticeship Charter 20, encouraging the Maisons to hire apprentices and capitalise on know how transmission, including for design related jobs.

For LVMH the key learnings are the Transmission of know how and skills, which enhances the creativity of designers and creative teams supporting designers, is a key for success and innovation. The Guerlain Perfumer Thierry Wasser has learnt from his predecessor how to source raw materials and design Guerlain perfumes with their specific identity. He has used this knowledge and tradition to make the brand evolve, but also source more sustainably and while respecting biodiversity.

As a result of this learnings of Apprenticeship: LVMH has, in France, 663 apprentices and is currently developing its apprenticeship policy, including for design related jobs.

Crafts and Design Innovation and user-centered Design

20 Communication campaign and toolkit developed by the French Government to support apprenticeship of young people in companies: https://www.alternance.emploi.gouv.fr/portail_alternance/jcms/pa_5012/navigation/accueil

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Different studies have made clear that Crafts and Trades, or Handwork, are primarily associated with tradition and technical understanding and very rarely with a competence in design. Apparently, the efforts of the Skilled Handwork organisation to promote the design subject internally have been inadequate. In the age of design, such an image becomes increasingly problematic. Huge market potentials are not being tapped on. Potential customers of Skilled Handwork have no idea that there are qualified craftspeople offering top quality and highend design solutions based on an in-depth customer counselling. In the future, a society with an ever growing demand in quality and sustainability will need a lot more well- trained Designer Craftsmen to meet the needs for smart, adequate and exceptional design solutions.

Craftsmen are not only producing their own goods and products they are also responsible for the creative part of their work as well as marketing, selling and new ideas. As the Crafts Council UK wrote in their latest study about the qualifications and educational background of craftsmen:

“Crafts makers enter the sector from a range of educational backgrounds, many embarking on their careers from a first degree or postgraduate study in arts, crafts and design at UK universities. Women represent the majority both in undergraduate crafts higher education and in the crafts employment sector,...“21 But still with an higher educational Background and long experience with own businesses, design skills and design innovation are not widely accepted by the craft community. The german organisation for crafts, the „Zentralverband des deutschen Handwerks“ stated at their annual assembly as the „Rosenberger Thesen“ that design education and vocational training are important for the future development of crafts in germany:

„The next generation of craftspeople will need increased design education from early on in their vocational training. Whilst systems of compatibility and comparability must be initiated, at the same time the multi facetted, diverse nature of the education should be preserved. In this way new models should be tested. It is only in the interest of the Skilled Handwork organisation, as it is for the Handwork industry at large, to improve the structures for design education and to provide for its funding. Particularly, in terms of the potential of crafts/ handwork, inter-professional and inter-trade co-operation must be supported and strengthened.“ 22 Also in Crafts, there is often lack of understanding about the growing market for design. For many businesses connected with crafts, the issue of design competence seems too remote and therefore they do not feel the need for professional training in the field. Having said this, by taking on designers they could win a new market segment. In times when the customer values the individuality of products, the personal contact between customer and craftsman in the development of a unique and bespoke design is a competitive advantage for the hand-work. Up to now only a few crafts firms have recognised that they can improve their businesses via an orientation towards design.

[CASE] As Good Case for the discussion about the relation of craft and design can be considered the:“ German Craftsmen conference „Future of Design in the Crafts and Trades Industry“, 14th - 16th October at the Academy of Designer-Handwork, Gut Rosenberg, Chamber of Skilled Crafts and Trades Aachen.“ This conference was held because all member organisation of the german Zentralverband des Handwerks felt there is a lack of connecting design with craft and that international developments in design innovation and user-centered design are bypassing germany and its craft enterprises. The main proposition the Rosenberg-Thesen have for crafts in germany and general is, that the:“ Focal points being sustainability, environmental issues, social responsibility and user orientation. Design can contribute to the added-value of products and can reduce the development

21 http://www.craftscouncil.org.uk/files/professional-development/Craft_in_an_Age_of_Change-England_summary.pdf 22 http://www.gut-rosenberg.de/fileadmin/gut-rosenberg/upload/pdfs/3_designtage/leporello_rosenberger_thesen_internet.pdf

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cost. In the long term, design processes can lead to positive effects on innovation and hence business growth by increasing competiveness of firms which leads on to more employment opportunities.“ 23

23 Rosenberg Thesen, Oktober 2010, Zentralverband des Deutschen Handwerks

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RESOURCES http://www.craftscouncil.org.uk/professional-development/research-and-information/research-reports/ http://architectureau.com/articles/old-materials-new-craft/ http://craftresearch.blogspot.com/2006/09/3rd-call-new-craft-future-_115747262552912043.html http://www.newcraftfuturevoices.com/ http://www.gut-rosenberg.de/aktuelles/pressemitteilungen/rosenberger-thesen.html

tab Added Value of Manufacturing: Source World Bank Manufacturing, value added (% of GDP, Source World Bank

30 25 20 15 10

1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 Austria Czech Republic Denmark United States

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European Union Germany Italy OECD members

PART 4: SMEs are FUTURE FACTORIES By building micro factories to bring manufacturing back to Europe

During the past ten years, we have approached what might be the end of industrial mass production and fabrication. We have seen the development of a post-industrial production system that is able to handle individual aspects in mass customised, small serial production. In the production process each new product can be optimised or adapted for personal taste or individual needs and the final product will be unique and special. This new manufacturing and production system has been enhanced by computational fabrication and standardised interfaces, giving more freedom to engineers, designers and architects.

Post industrial production systems with mass customisation The post-industrialised factory with its computational fabrication is the next logical step of computer aided processes of planing, designing and producing. The post-industrialised factory connects the advantages of mass production with traditional crafts. Traditionally, craftsmen produced unique individual single pieces for a very local market. The traditional arts and crafts manufactured individual products on a small scale in a low volume production process. Each new production can be distinguished through the process, material, or even through a single client. In contrast to traditional single items or low volume production, mass production manufactures standardised products in large quantitates. In this mass production process, variations or individual needs can be satisfied only with large financial and personal resources.

Different from the traditional mass production, the post industrial manufacturing process of a „Future Factory“ with computational fabrication enables a serial production of individualised products – a kind of mass customisation. The meaning of mass customisation in this context is beyond the meaning that large car manufactures gives customisation of cars, to choose your own favourite colour of your car.

These new products of low volume production with its single or individual products are produced again by local factories for a local market. Even when these products are designed for global consumers, no physical transportation of goods is needed and therefore no transport costs accrue.

[CASE] As a good example of this new methodology of computational fabrication is the construction and building of the Austrian pavilion at the World Expo 2010 in Shanghai. The architectural magazine details.de (05/2012) writes that the pavilion with its designing and building process can be seen as a proof of concept for computational fabrication. The building at all stages and the planing, construction and at the end the building itself where supported and managed by digital processes. As the architectural magazine details points out, architects “are coming ever nearer to their goal of one continuous digital workflow, from design to actual construction". The magazine details.de published a revealing interview with the Austrian architect Matias del Campo, from the architectural firm "SPAN". Matias del Campo shows how the development of his Austrian pavilion for the EXPO Shanghai 2010 was done completely digitally.24

Today Innovation is coming from all directions Innovation processes in small and medium sized companies (SME) are very different from the well-known innovation processes of technology driven large companies. In small companies, small teams or even single individuals are often involved in incremental innovation processes with a steady step-by-step process of constant change. Yochai Benkler, a professor at the Harvard Law School, argues that innovation must be seen in an very broad sense. For Benkler, innovation processes are not only connected to businesses but also to cultural developments as the development of software, Wiki or other per-to-peer phenomenon of the Web2.0.

"Today innovation is coming from all possible directions. Before, innovation came predominantly from enterprises and was market-driven. Today we see that significant innovation comes from the periphery. Wiki, blogging and peer-to-peer software, for example. Today innovation does not only happen within an

24 architectural Magazine detail.de, 5/2010, P. 458-463, http://www.detail.de/rw_5_Archive_En_HoleHeft_231_ErgebnisHeft.htm

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enterprise or within the frame of the copyright and patent system anymore. It develops from social interaction and collaboration." Yochai Benkler, [datum] 25

As Benkler argues, innovation happens everywhere and not only within enterprises. Fab Labs, Future Factories as well as Living Labs and other open laboratories are incubators for new ideas and experiments. These places are by definition open and free (free as freedom of thought, not in the meaning of „no cost“). The idea that you can find innovation everywhere, means that society has the mission to enable and foster these ideas. Such innovation ecosystems can be fostered in special build spaces, labs or facilities for a new generation of innovators.

The European Commission Staff Working Document on “Design as a driver of user-centred innovation” 26 concludes that design has the potential to become an integral part of a European innovation policy targeted at societal and market needs.

FAB LAB The first Fab Lab was founded at the MIT (Massachusetts Institute of Technology) as a collaboration between the Grassroots Invention Group and the CBA (Center for Bits and Atoms). The Goal was to explore the content of Information can be transformed into physical objects and how grassroots initiatives can be empowered over using machines „A fab lab (fabrication laboratory) is a small-scale workshop offering (personal) digital fabrication. A fab lab is generally equipped with an array of flexible computer controlled tools that cover several different length scales and various materials, with the aim to make "almost anything". This includes technology-enabled products generally perceived as limited to mass production.27 These FabLabs are low-threshold Innovation space for amateurs to get in contact over experimenting, making and building things with computer aided fabrication, new ideas and innovation processes. in 2009 the united state congress voted for an motion that in each city over 200.000 habitants should build an FabLab for its citizens.

LIVING LAB Living Lab is a user-driven open innovation ecosystem based on a business – citizens – government partnership which enables users to take an active part in the research, development and innovation process. The Living Labs „movement“ has a growing number of participants all over Europe.

As the initiative living labs stated it in their document:„The benefits for the different types of stakeholders to deploy user-driven open innovation and Living Lab methodologies can be summarised as follows: • For the users in their role as citizens and the community: To be empowered to influence the development of services and products which serve real needs, and to jointly contribute to savings and improved processes through active participation in the R&D and innovation lifecycle.

• For the SMEs, including micro-entrepreneurs as providers: developing, validating and integrating new ideas and rapidly scaling-up their local services and products to other markets.

• For the larger company: making the innovation process more effective by partnering with other companies as well as end-users, which are rooted in active user experiences, increasing ‘right the first time’.

• For research actors, the economy and the society: Stimulating business-citizens-government partnerships as flexible service and technology innovation ecosystems; integrating technological and social innovation in an innovative „beta culture“; increasing returns on investments in ICT R&D and innovation. „28

New division of labour with user-centred design The new individualised products that are a results of the production in an post industrialised manufacturing system change not only the way of using tools, methods, approaches and processes but also the way we perceive the designer as the „author“ and the consumer as part of the creational process.

In the cis.reader, Paul Attkinson describes the new division of labour in the following way:

25 Yochai Benkler is a law professor at the Harvard Law school, in his book The Wealth of Networks and the essay “Coase‘s Penguin, among other publications, he deals with questions pertaining to internet production and copyrights. (Quote from an Interview with futurezone.at under CC-by-SA) 26 Commission Staff Working Document ‘Design as a driver of user-centred innovation’, 7 April 2009, SEC(2009)501, p. 32.

27 http://en.wikipedia.org/wiki/Fab_lab 28 Source: http://ec.europa.eu/information_society/activities/livinglabs/index_en.htm, http://www.openlivinglabs.eu/

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“Clearly, Post Industrial Manufacturing systems will change the meaning of design. The boundaries between professional and amateur design (or to put it another way, between designer and user) are quickly being eroded. The bar has been raised from “co-design” and “user-centred design” processes as now, the designer and user are essentially one and the same thing. We are entering a post- professional era of open design. We are far closer than might be thought to a position where high-quality products, indistinguishable from those produced professionally, can be downloaded, adapted and manufactured by anybody, anywhere, in any material. This not only changes the way we think about design practice and the consumption of design, but the way we need to teach design to future designers.“ 29

This new devision of labour between the designer, the producer and the consumer helps not only to make better products and reach better competitiveness but is also a driver for new innovations. This was also confirmed in the public consultation that was launched on the basis of the staff working document30. One major finding from the consultation was that design – and „user-centred design“ – should be better integrated into innovation policy and support. There is scope for more innovation, more user-centeredness, and more social and environmental responsibility in much of today’s design.

[CASE] Electrolux - Global Personas for User-centred design A good example of how user-centered design has been used is the household appliances firm Electrolux. Electrolux developed eight different global individual personas to support the design process for its global design teams.

User-centered design is a methodology and a process in which the needs, wants, and limitations for end users of a product are taken into account. In each stage of the design process these needs or limitations are given extensive attention. The user-centered design can be characterised as a multi-stage problem solving process for designers, engineers, developers and decision makers to analyse how users likely will use their product. The process includes thorough testing of the validity of the assumptions on user behaviour with real world tests with potential users.

In the Design Council UK- Magazin (Edition 2) this new approach was featured as:„Electrolux has explored a new user-centred approach to help users adopt more eco-friendly habits. In 2000 they gave 9,000 Swedish families free machines which let the user pay per wash (about 50p a cycle) via their electricity bill. The machines are replaced for free after 1,000 washes (five years for the average family).“31

Designers with in-House production - a added value system The new approaches and processes developed for a post industrial manufacturing system not only questions the traditional role of a costumer, to only consume products and services, it questions also the designer as the only „author“ of a product by asking costumer to co-design or co-create products and services.

3D-Printing, CNC-milling machines and industrial robots are tools of the Future Factory. The purchasing cost of the new generation of computational fabrication machines are manageable even for small enterprises like design studios or architects.These new tools are giving more freedom to the designer. The designer him/herself can control the whole production process from the design towards the actual manufacturing until the sale of the product. For certain products the whole supply chain can be integrated in an in-house production. So products and goods can be produced on demand or even in very small numbers. In this way, the investment cost for a new product line can be managed by SMEs without stocking cost and large investments in mass production.

As the well known author and critic Cory Doctorow writes it his steampunk manifest: “Love the machine - hate the factory! ....Here in the 21st century, this kind of manufacture finally seems in reach: a world of desktop fabbers, lowcost workshops, and communities of helpful, like-minded makers puts utopia in our grasp. “Finally, we’ll be able to work like artisans and produce like an assembly line”.32

A a conference organised by the Austrian [English name of creative wirtschaft austria] in May 2010 Ronen Kadushin, a pioneer of Open Design, delivered a talk under the title „Reinvent yourself“. Kadushin stated that: 29 http://www.cis.at/de/Schwerpunkte/cis-projekte/downloads/ci-convention-2011-2/view , page 11

30 For this, see http://ec.europa.eu/enterprise/policies/innovation/files/results_design_consultation_en.pdf 31 http://www.designcouncil.org.uk/publications/design-council-magazine-issue-2/user-centred-design/ 32 Cory Doctorow, cis reader 2011, via steampunkmagazine.com cc-by-sa, His first novel „Down and Out in the Magic Kingdom“, was published 2003, and was the first novel released under a Creative Commons license. All his other novels have been also released under Creative Commons license. This licensing allows derived works and prohibit commercial usage. At the same time a print version is published Cory Doctorow publishes also a digital version without charge.

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“Open Design, with the possibilities of self producing and easy use of machines – the designer himself is the producer – it cuts out the middleman who decides whats he is going to produce.“ This in-house production is a Future Factory or a micro factory with all its components – a factory on small scale for prototyping, low volume production and mass customisation. Designers who can´t afford this machinery themselves are building added value system with other designers to build their own factory.

More production for Europe Across Europe, economic data shows that production and the added value of manufacturing33 are decreasing.

Production and manufacturing in Asia seems financially more viable than investing in European production.

More and more European enterprises transfer their production to Asian countries. By transferring labourintensive production to China Europe is transferring both knowledge and external costs like pollution to these subcontractors. Thanks to affordable oil prices, transportation costs make up only a small share of the total cost of production.

The oil price will not decline in the future. In contrast, most experts agree that due to the world economic crisis, limited oil recourses and speculation on financial markets, oil prizes will increase with between 30 and up to 50 percent until the year 2020.34 Against this background, Future Factories as micro production entities with their local and on-demand production systems are likely to be more and more viable in the future. This would open a new field for local production in Europe with the need of specialists, professionals and skill workers and add value to the local economies and communities.

Global Design with local production We can already witness how these new technologies, new approaches and new ways of working and producing are growing. One example is the projects of the Open Design Pop-Up-Store for the City of Design Graz (Design month 2011) 35. The Open Design Pop-Up store was realised with a full digital workflow, and the shop interior as well as the products sold in the Pop-Up Store were made entirely with computational fabrication. The products for sale where designed globally, but all of them where produced locally. The region of Styria, where Graz is the capital, profited form the added value of manufacturing since all the goods where produced in the region. All products where manufactured in small numbers or on demand. On the plus side no cost of transportation, no cost of stocking.

The Open Design Pop-Up Store was a demonstration of a new way of collaboration and production in Europe.

But also vice versa, ponoko 36 is a global marketing platform for designers with local producers. A designer can contribute his designs to the platform and on the other end of the world a costumer can download the files and commission a local manufacturer, who is a member of the platform to produce the goods.

[CASE] The Open Design POP-Up Store for the Graz (City of Design) in 2011 The Store was build in devastated area near the city centre of Graz. The plan by the city government is to gentrify this district over this next years. Therefore a program with artist in residence (AIR), low rents of stores for new designers who are willing to work in this area and run a store and their business, cultural events and also temporary staging of unique stores like Fashion, Assecoirs, and Design was the idea of the City of Design program.

In the year 2011 the cis (creative industries styria) a economic development agency for graz commissioned the open design store. In this Store 25 different Open Design Products where presented and could be bought by the public. All products are published under the Creative commons licence and can be downloaded by everyone for self fabrication(http://www.od-shop.com/). The idea was to show a digital work flow from the Idea of a product to fabrication and at the end the display at a shop. The products where designed by different designers all over Europe and the fabrication of the goods was handled by local producers. The concept behind the Open design Shop was to demonstrate how Creative Commons Licensing can be integrated in the daily work of designers and how local producers can benefit of such model.

[RECOM] Therefore the European Parliament and the national governments should support instruments for working with Open Design and foster the new possibilities for Creatives to work with Open Deisgn 33 tab http://data.worldbank.org/indicator/NV.IND.MANF.ZS 34 WIFO http://www.energiestrategie.at/images/stories/pdf/16_bmwa_08_evalbiomasseap.pdf Seite 22 35 http://www.cis.at/de/archiv/pop-up-store 36 ponoko.com

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Creative Commons, Open Source and Open Design Practices in Production All these new methods, practices and developments have been made possible by the development of new technologies. The development of standardised interfaces has been key. The increased use of communication, and global exchange of files and ideas, as well as computational fabrication over distance is the key to the Future Factory and to the paradigm shift in manufacturing. The process of production is open to easy changeable manufactory lines and on-demand production. In addition, machines get easier to program and are increasingly useable for non professionals.

The development of Linux, the open source operating system for computers is a excellent example of an open process of innovation and design. This example could be easily transferred to other industries and business sectors. The main principle and practice of this specific open source development is peer production by collaboration, with the end-product, blueprints and documentation as open source and free for the public.

For working in the digital sphere like the internet in the resent years a new legal framework called the creative commons licence was developed. As the website of creative commons is stating: „The idea of universal access to research, education, and culture is made possible by the Internet, but our legal and social systems don’t always allow that idea to be realized. Copyright was created long before the emergence of the Internet, and can make it hard to legally perform actions we take for granted on the network: copy, paste, edit source, and post to the Web. The default setting of copyright law requires all of these actions to have explicit permission, granted in advance, whether you’re an artist, teacher, scientist, librarian, policymaker, or just a regular user. To achieve the vision of universal access, someone needed to provide a free, public, and standardized infrastructure that creates a balance between the reality of the Internet and the reality of copyright laws. That someone is Creative Commons.“37

37 http://creativecommons.org/about

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