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The Fourth D and the Economy
Māris Bērziņš, economist, writer

Recently in a dream I saw something like an advertisement, like a signboard with the heading “God, Nature, Work, Design” (In Latvian: “Dievs, Daba, Darbs, Dizains”). I don’t remember anything more, dreams dissolve so quickly. I only remember – when I awoke I thought to myself: isn’t that a pretentious addition to Anna Brigadere’s trinity. But still... If you think about it, the relationship between design and the first three can be seen even with an untrained eye. At least in the fact that God and Nature have designed absolutely everything in the world, and also man, working in his farm or in the economy (the Greek oikonomikē – the art of directing a household), is constantly creating something new. But is this enough? I don’t know. Looking at the relationship between business and design in Latvia, definitely not. Design has not yet occupied an appropriate place on the Latvian economic stage, although the axiom “Design is one of the foundation stones of the economy” should also be regarded seriously. The statistics of developed countries prove this – companies which invest in design earn a lot more than those who do not. Because design creates an added value, and added value to a large degree is dependent on design. At times it can comprise even 99% of a product’s price.  

Design – the unappreciated tool
Some company directors tend to express themselves in the following way: “I am not convinced that the investment in design will pay itself back. So I will get by somehow without it.” And still today they are trying to get by, because it is assumed – also on a national level – that Latvia’s competitiveness should be based on three whales: cheap labour, nature’s own gifts, and let’s say, the blue cows by the sea. Perhaps it sounds too harsh – because after all we also have a number of very original, national items which are appreciated in the world market. Yes, there are, but there are too few of them to even up the negative export-import balance (twice as much is imported than is exported), not to mention turning it into a positive direction. Raw timber still occupies too large a proportion of exporting, rather than production, which could try to cut the buttons off IKEA. During this time inflation has climbed high into the sky, but the national economy, running fit to burst, slowly slides into the ditch. We should try to get out of this sensibly and with dignity, and here national design could serve as a point of support: a crutch and wings simultaneously. Luckily, besides writing various policies, strategies, programmes and guidelines a real educational activity has already begun – this is demonstrated by, for example, the collaboration between the Latvian Design Foundation and the Ministry of Economics, also the magazine which you are reading right now. 

But manufacturing, unfortunately, is still dominated by the supply of separate details and the manufacturing of anonymous products. Many items which Latvia manufactures for export are sold as foreign brands, without any indication of their country of origin. The design is not ours, and this says everything – or, more accurately – has been silenced. Goods that have been made in Latvia have too little added Latvian value, because businessmen lack the competence in the design field and the understanding about the growth that added value could give their production. Only 19% of Latvian companies are innovative and introduce new or significantly improved products to the market in comparison to the EU, where the proportion of innovative companies is 45% of all manufacturers and service providers. Also the state sector is not particularly interested in how professional design could improve the provision of state services to society. In turn, the wider society associates design firstly with the look of expensive cars and the colour of apartment walls, rather than as a source of significant improvements for goods, services, competitiveness or the quality of life. Because of this, one rarely hears of Latvian design on an international scale. The exceptions are some companies producing articles of underwear and linen. It remains to hope that in the future these exceptions will become the majority. After all it is worth it, because, looking at technologically comparable companies – those who invest in design gain an average of 30% higher profit than companies that do not.  

Design thinks about tomorrow

With the intention of mixing the colours a little I will say that for us, a fair amount of design occurs by fortune telling in coffee grounds and depends on the aesthetic taste of an individual. This is a very amateurish approach – it is important to not catch the design from the air, but to support it on real, verified data and facts. It’s true, this requires long-term investment in design education and research. One example is a small piece of research, the aim of which was to clarify the needs of the future consumer: at kindergartens children were shown mobile telephones with the brands removed, and were asked “Which do you like better?”, “Which is easier to use?” etc. This research, ordered by designers offered totally unexpected results, which indicated that designers as aesthetes and specialists can make mistakes in their assumptions about the taste of the consumer. But the most important issue is that broad statistics were gained which are very important for the design process. It has also been found through research that young people have a much more developed thumb than the previous generation, because they communicate with sms messages. Somewhere in another country, when new products are being designed, this is definitely taken into account. But here, does anyone have any idea what will be needed by today’s fifth grader in a decade’s time? It would be interesting to find out how far into the future the view of the Latvian businessman is trained.  

Design is not decoration
The 1978 Nobel Prize winner economist Herbert Simon has called design a tool for the achievement of economic goals. In his mind – and not just in his mind – design is a serious resource of economic development, a driving force, and its use in the national economy brings significant positives. Design was one of the spheres that helped the USA climb out of the Great Depression of the 1930s. Canada solved its economic problems in a similar way in the 1970s, and Great Britain did so in the 1980s, when encountering a crisis in export of manufactured products, played the design trump and in 1994 took first place internationally with its largest proportion of export per capita. I won’t even begin to talk about Finland. The evidence collected by researchers working for world design leaders provides a convincing argument that the use of design is a profit-making business investment. The effectiveness of design improves turnover, the prospects of individual companies in the marketplace, and also the nation’s competitiveness as a whole. For example, the World Economic Forum’s Global Competitiveness Report includes various indicators which allow the comparison of the economic parameters of 75 nations. These offer convincing proof of the meaning of design at a macro economic level – of 25 nations which are listed as the most highest achievers in the field of design, 24 are also the most competitive in the world.  

The role of design cannot be overvalued. Particularly now, when the world market is oversaturated with goods and services. The first thing that the consumer notices, of course, is the look of the product. However that is not the main thing which the design should be responsible for in the manufacturing process, because the buyer wants the item to look at, but also to use. Therefore a contemporary designer thinks not just about the outer look of the goods, but also works as an expert in materials and has an idea about technology, in this way economising on manufacturing resources. Professionals are needed which could participate in high quality manufacturing which is filled with achievements of science. In Latvia the designer is regarded more as an artist, but they also have to be an innovator. It is even better if they are also a soothsayer and a prophet.

Contemporary business culture can in a way be valued as the culture of a concrete project. This suggests the use of a completely different, much more progressive methodology in the reaching of economic aims. Here we are speaking about specialisation. At times even very narrow. But the designer is no longer alone, he works in a team, which has been not only endowed with the ability to work with high-quality artistic and aesthetic standards, but have also been armed with an understanding about the specifics of manufacturing, about management and marketing, and about the social environment and market situation. It is possible that someone will have to rope in their artistic egocentrism, but these are our contemporary industrial design and business relations. That’s the way it is. While the designer is wishing for humans to anatomically change to suit the form of his imagined chair, nothing will succeed. From the point of view of business, design has to be able to take the goods from the manufacturer to the buyer. If this cannot be achieved, then it is not design, but only a decoration.  

Design is the key to successful innovation

A large number of businessmen truly view design as a surface decoration only, which is added to products that are already finished. In professional terms, this is not the truth. An effective design is included in an integrated product during the manufacturing stage, including the process of innovation, where design plays a very important role. The significance of design in innovation grows rapidly, if designers think about the user, and bring some new, useful experience to each project. The ability to see fresh solutions in places where apparently no innovation is possible, is testimony to creativity. But the ability to add collected experience as a value is an indication of professionalism. I will name some recent foreign and local innovations: Google, iPod, iPhone, Skype, “Stendera ziepju fabrika”, “Mádara”, “Emīla Gustava šokolāde”... Each has their own turnover and differing niche in the market, but all of them are significant because the innovators have gauged the needs of the clients and, using already existing technologies, they have created new products, centred on the user. And design has been the key to success of these innovations.  

Design is a story  

No matter how pragmatic a person becomes, they will always need emotional comfort. This is why the Danish futurologist, Rolf Jensen’s idea about the stories of businesses and goods is attractive. In his book “The Dream Society”, Jensen describes situations where consumers buy a product because of their story, which is told by the item and its manufacturer. He asserts that an ever-increasing number of companies will bloom because of their interesting stories, which are associated with their products. Here one can only agree – good design has always created emotional arguments based on facts favouring this or some other product. Thanks to talented designers who understand the human aspects of goods and services, stories place an emphasis on feelings, rather than technical data. And their significance will grow, as soon as the number of competitors with technically equivalent products increases. Does this mean that designers have to be good story tellers? Apparently so.