Executive Summary

In 1995, the market for design consultancies was estimated to be worth around £590m by design fee income. While the volume of business commissioned from consultancies is rising, the industry faces resistance to fee increases. Consequently, profits remain low and the market's value remains virtually static.

Key Note defines design consultancies as companies which design on behalf of others, but which are not involved in the manufacturing process and are free from ties with manufacturers. They include five broad sectors: corporate identity/image, product design, graphic design, technical/systems design, and building design/architecture.

Among the factors impacting on the development of design consultancy business is the growing trend towards globalisation. UK consultancies are increasingly developing interests abroad, largely in response to demand for UK design, which has established a high reputation. At the same time, the global view of branding is demanding the development of designs which are appropriate to widely varying cultures and climates, for use across several markets worldwide.

Another trend which has had a major impact on the market in recent years, is that for a corporate identity. This has served to bring designers into their own, requiring a variety of design skills to develop a range of products and environments with the same instantly recognisable identity.

The market for design consultancies is projected to grow to the end of the century and beyond, as companies increasingly recognise the advantages of outsourcing to specialists who can respond to their ever changing needs. The fields in which this will be most evident are those which have a promotional basis, notably advertising and marketing, corporate identity, packaging and interiors. The majority of product design and technical/systems design is expected to be retained in-house, since it requires a more integrated approach.

As the pattern for using consultancies becomes more established and the effects of the recession become further removed, it will become increasingly easier for consultancies to raise their fees. However, it is unlikely that the high increases and rates charged during the 1980s spending boom will be repeated, and clients will continue to expect high standards for their fees.

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