Product Design And Innovation Consultancies

Part
01
of two
Part
01

Product Design And Innovation Consultancies: Market Size

The two major types of design consulting are innovation strategy and product and service design. Companies who want to introduce novelty into their business or launch a new product have increasingly turned to innovation consultancies.

The US industrial design industry has an approximate market size of $3bn for US product design and innovation consultancies.
  • The industrial designers industry, which consists of innovative product design, model design and fabrication, and other industrial design services such as graphic design, consists of industrial designers who are hired by manufacturers to improve functionality, longevity, and production efficiency of goods.
  • The total industrial designers industry revenue in 2019 has been $3bn (three billion USD). The industry revenue is expected to rise, since higher corporate profit boosts demand for industrial design services. This is the value used to extrapolate the market size.
  • The global industrial design market size is expected to gain market growth from 2020 to 2025, and will be expected to reach $56,910M USD by 2025, from $46,700M USD in 2019. The compound annual growth rate is speculated to be 5.1% between 2020 and 2025.
  • Over the five years to 2019, increased consumer spending on cars, furniture, and other good has stimulated increased downstream demand for the industrial designers industry.
  • The industrial design market has grown steadily in the last few decades. The annual growth of the industry from 2014 to 2019 has been an estimated 0.7%. This is due to the growing investment in computer-aided design and computer-aided engineering. Increasing environmental awareness among industrial heavyweights and the growing incorporation of automation and intelligent technology into industrial sectors are influencing factors.
  • In business and model innovation, innovation consulting specialists see growing demand.
  • The companies holding the largest market share in industrial designers in the US in 2019 include Jacobs Engineering Group Inc, Bureau Veritas SA, and IDEO.
  • The surgical instruments segment held major market share of 26.6% in 2018 due to the complexity of instruments required in detailed designing for making them suitable for human body contact. Increased US medical spending also boosted industry activity in that segment.

Research Strategy

All the data collected on product design and innovation consulting companies were lumped under the category of "industrial designers", with reports mentioning companies such as IDEO, FROG, and Altitude as some companies that own large market shares of those designers. As mentioned in the research, the industrial design industry has been described as including product design, model design and fabrication, and other industrial design services. As described by Max Burton on the Fjord website, industrial design is now experience design, and all designers need to consider the entire experience of a product and service where the relationship between company and customer is extended over time and space. Strategic and conceptual methods involved in industrial design result in holistic delivery, from ideation to prototyping to production. While industrial design is a category of service, there is a significant crossover between it and other services that allow for the possibility of innovation. This allowed us to assume that data applied to the industrial design field could be applied to our question in hand.

Despite scouting the websites of top innovation consulting companies, we were unable to establish a customer number for design and innovation consulting companies, since the customer base was far too large to be calculated into a single value. However, we were able to find the revenue of the US industrial design industry to be $3bn, which we extrapolated to be market size of the product design and innovation consultancies. We made this assumption based on one of the definitions of the market size, which described it as the maximum amount of revenue that can be possibly generated by selling products or services to potential customers. We were able to find a reported number for the global industrial design market size, which is $46,700M USD, or $46bn. We were unable to find statistics regarding the US market share within the industry.
Part
02
of two
Part
02

Product Design And Innovation Consultancies: Market Forecast

The overall market size of the industrial design industry is growing at a 6.4% CAGR over the next five years for a total size of $59B globally and $8B in North America by 2024. The "industry designers" (companies that service the industry) U.S. market size is estimated at $3B in 2020. Triangulation was utilized to determine an available market for mid-sized companies in this industry at $1.65B in 2020 growing to $2.25B in 2024.

KEY FINDINGS

RESEARCH STRATEGY

Preliminary research, using a variety of sources, was undertaken to determine a high-level global and U.S. overview of the industrial design market size and growth rate. Subsequent research determined the size of the "industrial designers" market, which is a more precise determination of companies providing design and consulting services to this market. Further investigation uncovered a top-heavy company share in this market in which the 50 largest companies accounted for 45% of the total revenue. To determine a more precise market size and growth for the mid-sized consultancies in this industry, the $3B market size was reduced by about half to remove the share of the top 50 firms. The subsequent "available" market size was then projected out five years using to CAGR rate to determine market sizes for 2020 and 2024 (see calculations). The market growth rate for companies in the mid-sized segment was unable to be determined so the CAGR growth rate for the industry was used with the assumption all companies in that segment will have the opportunity to grow at that level.

CALCULATIONS

Global industrial design market: $40.7B X .20% (North American share of market) = $8.0B North American market size

$3B (U.S. "Industrial Designers" market size) X .45 (% of Top 50 firms in market) = $1.65B "available" market size in 2020.
$1.65B (2020 market size) X 6.4% CAGR (5 years) = $2.25B
Sources
Sources

From Part 02
Quotes
  • " The Industrial Design market will register a 6.4% CAGR in terms of revenue, the global market size will reach US$ 59000 million by 2024, from US$ 40700 million in 2019."
  • "China occupied 33.03% of the revenue market in 2017. It is followed by Europe and North America, which respectively account for around 27.30% and 19.70% of the global total industry."
Quotes
  • "Total Revenue in 2019 $3bn"
  • "ibisworld.com/united-states/market-research-reports/industrial-designers-industry/"
Quotes
  • "The four largest industrial design firms earn 11 percent of the industry’s total revenue. The fifty largest earn almost half at 45%. Compare this to the top 50 firms in the professional services sector as a whole, which generates only 18% of the sector’s total revenue."