Design industry economic forecast: plenty of appetite for growth but exports facing headwind
A survey carried out by the Finnish Association of Designers Ornamo shows accelerating growth and a year-on-year rise in profits among Finland’s design industry.
The number of design industry businesses seeking growth outstrips the national average for SMEs and is seeing strong, year-on-year growth in this consistently dynamic sector. More than half of the businesses surveyed by Ornamo reported an increase in their turnover compared with the same time last year. A total of 23% of businesses reported a downturn in their turnover, while last year the same figure stood at 38%.
However, exports are stalling and growth is not sufficient to drive a rise in the industry’s combined turnover. In 2014, the total turnover for Finnish design industry businesses stood at EUR 3.1 bn, down from EUR 3.2 bn in the previous year. The figures are based on Statistics Finland’s enterprise data, published as part of the design industry economic forecast.
Underlying the downturn is the radical downscaling of Finland’s manufacturing sector, which the growth in services cannot match. In order for the industry to continue to develop, it is critically important that Finnish businesses set their sights on the international market.
“Businesses that can compensate against the shortfall in domestic demand by accessing the international market will be the ones best placed to meet the current challenges,” Salla Heinänen, Executive Director at Ornamo, said. “It is worth noting that growth in the domestic market remains fragile.”
Calls for new international export strategy
Of the respondents, 16% reported that they are making determined efforts to expand their international activities. According to 8% of respondents, their international business activities are well-established and seeing steady development. The figures have remained unchanged since 2013. Of the businesses currently engaged in export activity, 38% reported that exports represent less than 10% of their total turnover.
This highlights the need to reform the international export system, something Ornamo has included as one of the organisation’s public policy objectives.
“At the EU level, design leads the way in intangible exports. Design has expanded conceptually to encompass services and strategic planning and, having done so, is ideally place to offer added value to several other export sectors,” Salla Heinänen pointed out.
It is crucial that, for export strategy purposes, design is viewed as part of the wider product development and innovation sector.
“For example, Finnish design agencies have a genuine role to play in exporting our technological innovations onto the wider international market,” Heinänen said.
Ornamo is also calling for greater access to funding to support design sector exports and to reduce the bureaucracy surrounding it.
“In order for us to make effective use of Finland’s export promotion programmes and the funding available, we must be able to focus the resources directly on the exporters’ key products. The process for applying for export funding must be quick and require no specialist expertise, otherwise it will remain inaccessible to smaller companies,” Heinänen explains.
Finnish design businesses increasingly growth-driven
The findings of an economic survey carried out by the Finnish Association of Designers Ornamo in the summer of 2016, show that many of Finland’s design industry businesses are pursuing ambitious growth targets. Of the respondents, 70 per cent expect their turnover to rise in the following year. A significant number also expect to see rising profits in 2016–2017. Some 12 per cent are strongly growth-driven, while 63 per cent will pursue growth to the extent possible.
Ornamo’s annual economic survey provides an overview of the Finnish design industry and current trends. This year’s survey was carried out in June 2016 and attracted responses from 130 Finnish design sector businesses.
Finnish design industry economic survey 2016: https://www.ornamo.fi/en/research/ornamo-economic-survey/