Design-Based Products and Services

by Henry J. Schumacher

In October 2004, Executive Order No. 372 established a Task Force to create and promote globally competitive service sectors. The task force was designed as a public private partnership, with the private sector driving and the government enabling.

The EO specified three initial service areas:

•       IT and IT enabled services
•       Wellness, healthcare and medical services, incl. retirement and assisted living
•       Global logistics.

ECCP is substantially involved in the development of the first two sectors:

•       ECCP jointly with GTZ and the Hanns Seidel Foundation established the European IT Service Center Foundation (EITSC) in 2003 which is involved in marketing the Philippines as IT outsourcing location, in human capacity building and in guiding European SMEs into this market. As part of a project co-funded by the European Commission and the Hanns Seidel Foundation, the EITSC has just purchased 170 square meters for an IT training center.
•       ECCP is closely connected with the task force and is presently establishing a ‘Global Health Coalition’ which liaises with Philippine potential investors, the US-based Healthcare Coalition Institute, various potential funding agencies, certification and training bodies, and Philippine government offices.

Given ECCP’s strong and decades long cooperation with the furniture, furnishings, home accessories, fashion accessories, gifts, toys, housewares, lighting, textiles, jewelry industries, we are firmly of the opinion that the service sectors in E.O. 372 should be expanded by a fourth sector

Design based products and services.

Why? Let’s look at some of the country’s assets:

•       At the cutting edge of global trends, Philippine designers ply their trade with indigenous materials such as rattan, abaca, bamboo, and coconut to produce innovative artworks for living that can be seen in chic homes around the world.
•       But the materials are not limited to the above natural products; metal and plastics, synthetic fibers and stone, glass and leather, are blended into lifestyle products. The aim is to stretch the limits of technologies. Innovative ideas, increased quality of craftsmanship and revolutionizing the manufacturing technologies to deliver genuine designs to fulfill customers’ new lifestyles around the world.
•       The Philippine style has become a dialogue and integration of architecture, functions, furnishings, landscaping and lifestyle.
•       Philippine furniture makers are winning fans with high-end designs that both ultra-modern and warm.
•       Leading fashion accessories companies from Cebu are the stars in Bijorhca in Paris.
•       The late Eli Pinto of CITEM, jointly with designers Budji Layug and a group of leading designers / company owners, established ‘Movement 8’ to promote Philippine traditional craftsmanship across the archipelago and beyond.
•       Philippine designers target the sophisticated consumer. They can’t compete with the likes in China on price but they can capitalize on coveted strengths in workmanship and materials.
•       The Philippines has three lifestyle products shows: ManilaFAME, Cebu X and PIFS which, in the best part of each show, present clear differentiation from China.
•       Philippine exhibitors and their products can today be seen in the leading trade fairs around the world:

-       Ambiente in Frankfurt
-       IMM in Cologne
-       Macef in Milan
-       Bijorhca in Paris
-       iSalone in Milan
-       Index in Dubai
-       ICFF in New York
-       IFFT in Tokyo
-       IFFS in Singapore
-       Maison&Objet in Paris
-       Las Vegas Hospitality Show
-       Tendence Lifestyle in Frankfurt
-       Furniture China in Shanghai
-       Ambiente Rossija in Moscow,
        to name a few only.

Many in the Philippines are of the opinion that this country is the ‘Milan of Asia’, given its reputation as design-oriented producer of gifts, accessories, furnishings and furniture. But then, sad to say, the ‘Milan of Asia’ does too little for its designers. There is no world-renowned design school in the Philippines; the Design Center of the Philippines has no money and some well-known Philippine designers are only now starting to support universities to improve their design curricula.

What’s happening elsewhere?

•       Singapore and Taiwan have made industrial design one of the sectors they wish to build up.
•       If you think that Thai design means carved wood and green pottery, think again. A new breed of designers is making waves with sleek lines, funky colors and wild new shapes.

What needs to be done in the Philippines?

•       It is time that this competitive advantage of the Philippines is taken seriously and that a ‘School of Art and Design’ be created that will develop a new breed of designers, from industrial design to packaging design, from gifts to furniture, from fashion to gold and silversmiths. It is useless to expect government to create such a design center; it’s the private sector that has to pick up the ball. One of the design and arts oriented captains of industry (retired or otherwise) should become the chairman and main sponsor of the ‘Philippine School of Arts and Design’.
•       It is time to create a new lifestyle trade fair concept for the Philippines to attract foreign buyers in big numbers.
•       It is time to use the example of ‘Cebu X goes abroad’ as a vehicle to demonstrate Philippine capabilities in design and designed products around the world.
•       It is high time to convince designers to stay in the Philippines and offer their designs to the outside world rather than leaving the country and moving the design capabilities of competing countries up.
•       It is time that research & development is added to design so that modern technologies and modern materials can be used in the design and in the manufacture of lifestyle products.
•       It is time to consider strategic alliances with design centers in Milan, New York, London and Paris.

Design – made in Holland

There are 46,100 designers in the Netherlands.  Together they contribute 2.6 billion euros to the Dutch economy – in other words, 0.7% percent of the Netherlands’ GNP.  In fact, the design industry accounts for a larger share of the economy than the Dutch oil industry or traditional sectors such as shipbuilding.

The figures quoted above stem from two studies carried out by Statistics Netherlands (CBS) and the Netherlands Organization for Applied Scientific Research (TNO) for the Premsela Foundation (which represents the Dutch design sector) and the Dutch Ministry of Education, Culture and Science.  The purpose of the studies was to investigate the economic significance of design.

Subsectors

Almost 60% of all Dutch designers work in visual communication, a subsector of the design industry.  That 60% is made up of 27,400 commercial artists, window dressers, ornamental painters, graphic designers, illustrators, quick-draw artists and advertising designers.  One out of three designers (13,900 persons) works in product design.  This category consists of industrial designers, fashion designers, goldsmiths and silversmiths.  It also includes flower arrangers, because their design skills also add value to a product.  The third subsector, environmental design, accounts for 10% of all Dutch  designers.   It is represented by 4,800 interior architects, garden designers and landscape architects.  In summary: 59.4% of Dutch design professionals are involved in communication design, 30.2% in product design and 10.4% in environmental design.  All in all, the number of people working in design is comparable to the number working in the insurance and pension industry (53,000 persons).

Design specialists

Seventy-two percent of all designers work in the service sector, 20% in industry and 8% in the non-profit sector.  TNO’s report also distinguishes between different corporate categories.  The first category consists of the “design specialists”, which employ 16,900 designers or well over a third of the total.  The design specialist sector is made up of companies such as advertising agencies and interior and fashion design houses, whose core activity is design.  Advertising agencies employ 14,000 designers and represent the largest group in the design specialist sector.  The sector accounts for 24.5% or EUR 635 million of the EUR 2.6 billion that the Dutch design world contributes to the nation’s economy.

The second category consists of companies that employ a considerable number of designers.  The include publishers, furniture manufacturers, service engineers for consumer items, firms of architects, consulting engineers and technical design and drafting firms and consultancies.  These companies employ 21,600 designers.  In other words, one out of every two designers works in this category, which represents 35.6% of the design world’s economic value, or EUR 922 million.

Design pays

TNO’s report also concludes that design plays a key role in innovation.  Fifty-eight percent of the companies that combine technical and design innovation say that innovation has a major impact on their competitiveness, as compared to only 47% of companies that do not do so.  Design is therefore a significant competitive factor.