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Design Studios vs. Large Design Agencies: The Changing Landscape of the Design Industry

When I was a boy I read a book about the history of battleships. That book illustrated how each generation of ships first grew larger and larger, yet then was superceded and obsolete by a smaller, more nimble type that allowed better maneuverability and survivability.

The design industry is no different. As we are closing the first decade of the new millennium, change has arrived and the design world is no longer dominated by large design agencies of 100, 200 or even 500 employees. We are now witnessing studios with 10, 20 or 30 people consistently delivering top quality design and in a very different way. It's a good change and it is an important change since it's about the availability of top-notch design to every product or company—and the very real opportunity for a small design studio to create a world-class product.

This evolution was crystallized when the IDEA Awards, announced by IDSA and BusinessWeek last month, started publishing its 5 Years of IDEA Winners chart. The chart tallies the number of IDEA awards given to firms over the past 5 years and ranks the design agencies accordingly.

Data collected from BusinessWeek's annual chart.

The 5 Years of IDEA Winners chart is an important metric that shows quality, trends and approach in the design industry. Here's how it works:

  • Each year about 1500 entries are reviewed by the IDEA jury, which awards less than 150 (~10%) awards to the best products designed in the world.
  • As tough as the IDEA program is, some teams manage to win more than one IDEA each year.
  • Very few teams manage to maintain that quality of work year after year—winning multiple IDEA's each year is a rarity. Nobody is surprised by Apple or Samsung's teams' consistent quality over the last decade. These companies are the pinnacle of corporate design commitment, resources and talent—they usually win more than 5 awards annually.
  • Some design agencies manage to do just as well as these corporate powerhouses—winning multiple awards year after year.

For design agencies to create design that wins 2, 3 or even 5 IDEAs annually—along a stretch of 5 years!—is an amazing achievement when you factor the number of annual projects required, staffing and billing for such project throughput, varying juries, economic fluctuations and personnel changes. That's what the 5 Years of IDEA Winners chart shows: An exclusive club of top design firms.

With the recently-published 2009 IDEA results I noticed an important trend. Until 2004, only large strategic and innovation design agencies could deliver enough quality and consistency to appear at the top of that 5 Years of IDEA Winners chart. Since 2005, and increasingly through the years, smaller design studios have managed to gain entry into this very exclusive club. At that same time, the large agencies lost some mojo and averaged fewer awards. As we end the decade, the chart shows a profound structural change in the design industry: Large design agencies are no longer the clear leaders in design services and small studios are achieving the same world-class design, year after year, on multiple projects.

What does this change tells us? There is no longer need for a vast corporate structure under same roof to deliver world-class design. Simply put, having 150 or 250 employees spread all over the globe does not guarantee the quality of your design project. And perhaps the big shops could learn a little about the new type of design management practiced by the smaller, studio-based agencies.

Read more of Gadi Amit's The New Deal blog
Browse blogs by other Expert Designers

Gadi Amit is the president of NewDealDesign LLC, a strategic design studio in San Francisco. Founded in 2000, NDD has worked with such clients as Better Place, Sling Media, Palm, Dell, Microsoft, and Fujitsu, among others, and has won more than 70 design awards. Amit is passionate about creating design that is both socially responsible and generates real world success.

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  • Henry Chin

    Albeit late, I just read your blog. I find your analysis and conclusion interesting but not surprising.

    Quality of work has nothing to do with being small or large. When the IDEA award started in mid 1980’s we were no more than three people, yet we kept wining IDEA awards year after year till early 2000’s when we (and several of our respected competitors) saw the opportunities and trends in the business and decided to move our businesses to where our clients saw more value from design than the usual “creating cool looking stuff.” By being large, not only we can provide tactical solutions for our clients, but we can also engage in much more complex projects that only an integrated, multidisciplinary design team can work on.

    The number of wining IDEA awards by smaller firms for the past few years has as much to do with larger firms moving away from doing tactical, short term engagements by clients to working on multiyear strategic design engagement that we and many of our larger competitors have been taking on. Not only we can not disclose these types of project/engagements for many years (and sometimes ever), we are also being prohibited to even talk about our relationship. Again, this is due to the nature of the amount of value these engagements have for the clients. To reiterate, the number of IDEA awards won have nothing to do with the larger firms’ lack of quality work and the smaller firms’ increase of work quality.

    A more important issue, one that I believe will play out in the next 3-4 years, is to consider the impact on the U.S. design industry when small or large Chinese, Japanese, Korean and Indian firms start to take the time and learn about how to enter the IDSA competition and take away the award numbers from all of us.

    Henry Chin
    Executive Director, Ziba Design

  • Scott Stropkay

    Where I agree that small design studios are producing high levels of design quality, I think they always have. To fuel you argument, we know that winning awards takes a lot of effort and many smaller studios simply don't make that effort because they don't have the staffs or time to write, film, and 'sell' their entry. On the other hand, if it wasn't for the big firms with their PR machines promoting design, the smaller firms wouldn't be given as many chances to make design contributions that have award winning potential. I think it is a symbiotic relationship. Ultimately, winning awards is nice, and with the addition of new green and research categories, they are starting to incorporate a wider range of factors that qualify design as important, but awards as currency is a designers game, there are other currencies to consider.

  • Adam Reed-Erickson

    Five year's worth of data does not a trend make. This is a vast oversimplification of many factors related to client types, design work, personalities (on the client side as well as the agency side), economics, etc. To begin with, there's an implicit assumption that award-worthiness equals "quality".