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Design and the Creation of Value
Clive Dilnot and Susan Boztepe bring together the unpublished writings of the late writer and lecturer John Heskett in Design and the Creation of Value. The book contains four front-end essays: two by Clive Dilnot who introduces the book and delivers insights on the editing of the final manuscript, one by Cameron Weber on Heskett’s view of each economic theory, and finally, an essay by Sabine Junginger on the role of governments in design. The back of the book presents a detailed set of appendices and further notes. This book is a fitting tribute to one of the field’s seminal figures in design writing and theory.
Creating a cohesive book from a series of unpublished, separate manuscripts after an author's death is challenging. Dilnot is clear in his introduction that this is more of an extended essay than a book and admits this "... book cannot, by definition, be comprehensive or systematic..." (page xxx) While Dilnot's introduction on editing the incomplete manuscripts provides a context for the book’s 234 pages, it must be highlighted that Heskett's own writings comprise less than half of the books’ entirety. However, it is through Heskett’s clarity of argument and ideas is where the real value resides.
When Adam Smith, the Scottish economist and moral philosopher, wrote "An Inquiry into the Nature and Causes of the Wealth of Nations" in 1776, he created the foundations of classical free market economic theory. Based on a simple model of the division of labor and production, his theory rationalized self-interested competition leading to greater productivity, lower prices and increased standards of living. Seventeen years earlier, Smith wrote "The Theory of Moral Sentiments," which articulated that conscience arose from active social relationships in which people sought mutual empathy that would guide moral behavior and conscience to better interpersonal interactions. In Design and the Creation of Value Heskett, like Smith tries to connect the economic to the moral. Heskett directly addresses how design can bridge value through values. This can be traced to how his career progressed from first his broad education at the London School of Economics in economics, politics and history, and then transitioning into building a career as a design historian interested in governmental design policy.
Heskett stated the intent of the book was to connect design to economics and to explore how design creates economic value. However, he recognizes that connecting the two "... is a minefield." (page x) This challenge is addressed in the first 67 pages where he dedicates half of the manuscript to help designers understand the evolution of 150 years of key economic theories. Heskett is adept at establishing these relationships ranging from detailed explanations of Adam Smith’s Neo-classical Theory (1776) to The National System (1840s), developed by the German economist Georg Friedrich List, Austrian Theory (1870s) which builds on Adam Smith’s theory through the work of Austrian economist Carl Menger, Institutional Theory (1900s), a modification of Menger’s Austrian Theory by Norwegian-American economist Thorstein Veblen, and New Growth Theory (1980s) extends Neo-Classical theory through Austrian political economist Joseph Schumpeter.
Starting with Adam Smith and laissez-faire markets that self-regulate through rational consumers and the simple mechanics he could see at the time: labor, production, price and markets. The social and political dimensions were considered external to economic transactions. As the world became more sophisticated in the trading of products and services, The National System, Austrian, Institutional and New Growth theories gave increasing credence to the positive byproducts of new technologies, product innovation and dynamic markets. The economic factor began to dovetail into the political and social factors that would need to be recognized as affecting and defining wider notions of creating greater value.
The role of information in improving products and markets was increasingly recognized as creating new knowledge which drives innovation and new labor skills for greater economic impact. Because knowledge can be shared and recombined in many different ways, its effects can be both unpredictable and transformative on markets. Thorstein Veblen (Institutional Theory) noted that information was not equally accessed by everyone because of the unpredictable nature of how people share it. Unequal knowledge and the uneven nature of how companies leverage it for competitive advantage creates imperfect markets.
In the second half of Heskett’s manuscript, he focuses on design and the creation of value. He recognized that the terms 'design' and 'value' are so broad that unless there are clear definitions, it would be difficult to have a coherent conversation on either. However, he takes on the challenge and describes three strains of design: individual design disciplines, which take substantial training and preparation; individual flair of commercial and decorative art; and fields that use design to suggest a higher status of their particular activity. According to Heskett, designers are reduced to creative implementers at the micro-economic level.
How inherent is design in affecting labor, production, price and markets, or in creating value? To neoclassical economists, not much. At a macro-economic level, design is regarded as “non-excludable” (non-paying consumers can access it) and therefore of little economic value. At micro-economic level, design has more impact as a local activity. However, Heskett points out that design has difficulty defining its economic contribution or wealth-creating due to the ability to copy a design, making it mostly non-proprietary and therefore lacking protection. This, according to Heskett, consigns design to “economic limbo.”
A large challenge to design having more visible economic integration is based on design’s emphasis on trial-and-error tacit (or personal) knowledge and competency. Therefore, design’s idiosyncratic ways of knowing cannot always be quantitatively packaged to business people who are focused on markets and profit. Heskett states that if designers cannot bridge the gap between individual tacit knowledge and the shared knowledge of an organization, then management will not understand what design is and “...it will inevitably be easy to make designers appear incompetent by demanding conformity to practices client to design." (page xx) The disconnect wipes out the innovative and economic potential of design. The irony of such a situation is that many executives point to companies like Apple as highly successful which generates the highest sales per square foot of any company in the world. This is in large part due to the role played by human centered design in both differentiating the company and commanding a price premium.
Design is about adaptation and by its nature is concerned about enlarging the boundaries of possibility – which could have future economic value. Heskett recognized that the value of a design does not always convey the intent of a designer, so ultimately the consumer determines the meaning and value of design in the marketplace. Consequently, economic value is a byproduct of design, rather than being a core of its function. At a macro-economic level, a relatively new design expertise known as "design planning" defines a product/service strategy and marshalls the resources of an organization to change and adapt to that strategy over time (strategy and optimization). A design practice would need to be managed from an integration and implementation standpoint (organization and implementation). This would allow design to move from a micro-economic level, which focuses on specific tacit design practices at the product level, to a macro-economic level, in which designers enable organizational and market systems. The transformation of design from low-level creative implementation to a strategic activity that defines policy by rationalizing the purpose, structure and delivery of products and services could "...create value, generate breakthroughs that open new markets or fundamentally redefine existing ones, and subsequently sustaining and extending them is a continuously evolving process." (page xx) Products are giving way to an explosion of services. According to The New York Times, services now account for over two-thirds of economic output and over 70 percent of employment in the United States.
Heskett does state several times that designers need to learn more about economics. Business, systems and institutional thinking have to be introduced to design students so they can connect strategic efforts with traditional physical manifestations of objects and services which use creativity and technological competencies. Design education will need to prepare future designers with a different type of knowledge that introduces systems, organizational and economic thinking to traditional knowledge of aesthetics, making and craftsmanship. Heskett had the foresight to instinctively connect parts of all five economic theories together and postulate on how design directly connects to markets, economics and the goals of business that we take for granted today. He proposes that “It is above all the focus on people and their needs and the reconciliation of these with business requirements that is advocated here as the major contribution of design as practice and theory, that has economic validity as a means of creating as well as adding value.”
Heskett spends much of the second part of his book discussing that economic activity needs to be more focused on "values," rather than just "value," which at times can become confusing. The tension between "values" and "value" creates a conundrum about the role of design as a human-centered activity and as a business function. If design is human-centered, a term that Heskett uses many times in the book, then it is an extension of culture. Business motives for profit do not always map to cultural impact. He believed that this gap has to be reconciled by both business and design in order to harmonize and align the intent of the two disciplines.
When reading this book, a reader may keep coming back to the essential question of what is value? Value is usually associated with material or monetary worth of something that is greater than the effort or resources spent acquiring it. It is also a product of the mind, which places an importance on the usefulness of something that exceeds expectations. In the book’s appendices, Heskett explores different types of value, such as producer, aesthetic, and intrinsic/extrinsic value.
Heskett’s greatest contribution through Design and the Creation of Value is connecting users, business requirements and innovation through grounded human-centered values in relation to economics. Together they can super-charge both the individual and global economy for greater value. For most classically trained economists and designers, the book may initially be challenging because he questions many canons held dear by both fields. His ability to distill the abstract nature of economic theories through clarity of words and helpful diagrams illustrates how design and business can collaborate in ways the most economic theorists could not have envisioned. Heskett successfully connects the ever-changing sources of knowledge, production, distribution and consumption of wealth with design that can directly contribute to social, political and economic prosperity.