The Outsourcing of Industrial Design Services by Large US Manufacturing Companies
This article examines the extent to which US producers of durable goods outsource design and development work to external organizations. Evidence from a sample of sixty-eight large manufacturing companies suggests that independent design consultancies and other design service vendors contribute significantly to the product development efforts of major corporations. External organizations are increasingly expected to deliver innovative design solutions with respect to materials selection, aesthetics, ergonomics, product performance, and ease of manufacture. These vendors vary from single-person establishments to firms that employ over 500 people. We find that the outsourcing of industrial design has been driven primarily by the ability of external companies to offer innovative services that complement the core competencies of client firms. Our data also point to the rising importance of design service imports, notably from the United Kingdom, France, and Italy. Such imports currently account for about 35 percent of externalized design expenditures, compared to less than 15 percent ten years ago.
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