Why governments should invest in design support interventions for SMEs

For SMEs and other small businesses, there are plenty of routes to innovation; such as, undertaking tech investment or in-depth market analysis. But at PDR, we help organisations develop their products, services and experiences with design – one of the most accessible methods of innovation there is.

In our latest interview, Professors Andrew Walters and Anna Whicher discuss the ways in which design-led support programmes and interventions can help SMEs grow and develop - and why governments need to invest in design to aid future economic growth and better quality of services.

Taking a design-led approach to innovation

The term ‘design innovation’ is a common one, used generously within design communities - but what does it actually mean? Put simply, design innovation is used as a catch-all term that encompasses the many ways a company might produce something new, different, or ‘innovative’ - and a design-led approach is a way of reducing the risk.

It takes a user-centred approach - discovering needs and values through research - to create something usable and useful to those users.

Anna explains, “Because of this, there are multiple options for SMEs to actually use design to further their offering - from gaining better insight into clients, to developing concepts with their users, from communications through to prototyping and strategy, using design offers a plethora of options for SMEs.”

“And it’s the scalable nature of design that is really suited to SME characteristics,” Andy adds. “The different levels of interaction all bring some benefit at each of the scale points; and that fits especially well with smaller businesses who are often resource-constrained due to money, staff or other restrictions.”

How design interventions can help SMEs

The ultimate benefit of design for SMEs is the way in which it reduces risk.

“It’s critical that we don’t just see design as a cost and it’s not just about making something ‘look nicer’. It’s a way of managing the risk of creating something new within your organisation,” Andy states.

Taking the design process in a step-by-step manner - starting with understanding the needs and values of your end-users - puts you in a better position to make decisions about what you do next.

“This is incredibly beneficial to SMEs who perhaps won’t have other options for innovating that don’t come with significantly more risk.”

Within PDR, the research and policy teams work continuously to support governments to identify what design support programmes might best fit their regions to help SMEs. Currently, PDR teams are working on two EU funded projects - User-Factor and Design4Innovation - to support SMEs in using design as a tool for user-centred innovation.

“One example to illustrate this is our work with Scottish Enterprise over the past 5 years,” Anna continues. “By Design was a grant that helped over 600 companies in Scotland access up to £5000 to work with a design agency for the first time. It was designed to avoid the bureaucratic nature sometimes seen in government support programmes, and instead offered a ‘light-touch’ grant which really proved its worth and more.”

By the end of the scheme, 64% of companies reported bringing a new product or

service to market and 27% entered new markets - and afterwards, 83% of companies continued to work with a design agency going on to invest £26,000 on average, proving that a small government grant of up to £5,000 can stimulate a fivefold increase in investment.

“This is really a golden example of governments opening doors to businesses using design for the first time. It’s not about financing the whole A-Z; sometimes it’s about having a small incentive that goes on to leverage huge impacts for the company,” Anna explains.

Funding for the future

Through our projects, we’ve been able to look at good practices across Europe for business support programmes and bring them to Wales and Scotland to benefit SMEs in UK industries.

“Design is a route to recovery and innovation,” Anna says. “Whatever situations may happen within the business landscape, it’s really important that design continues to be a component of Welsh Government’s innovation support in the future.”

“In our experience, the Welsh and Scottish Governments have shown great commitment to taking a design approach to innovation,” Andy agrees. “It’s more important than ever that this continues. However the context may change, we hope that there will still be the opportunity for the government - for all governments, in fact - to continue to have the freedom and the ability to take a design approach during what can be a tricky time for investing in local businesses.”

Next steps

There’s never been a better time than now for governments and local authorities to integrate design into their business support mechanisms. Discover how PDR uses design-led support programmes to help SMEs - contact us to arrange a discussion or explore our recent related funded projects.