The Different Approaches to Design by U.S. Businesses

Design is ubiquitous—there is no such thing as an undesigned product. Every decision made regarding the fabrication of a good or delivery of a service is implicitly a design decision. The question in the 2022 ABS used to differentiate companies with no systematic approach to design from those with a structured, creative approach (referred to as design-active) reads as follows:

We are interested in collecting information on clear design activities defined as part of structured creative processes.
Does this business take a structured approach to conducting design activities?
___ Yes ___ No

Design of goods can include the following: the “look” of manufactured products; function; ease of manufacturing; environmental sustainability or resilience; quality; or architectural design.
Design of services can include the following: business processes (i.e., design thinking); customer experience; delivery of a service; or user experience (UX) that addresses interaction with goods, services, or digital content by users.

Table 1 provides responses by 2-digit NAICS industry code and company size. Across all industries, 16.1% of companies reported approaching design as a structured process. Industries that have a higher percentage of companies active in design include manufacturing (NAICS 31–33); information (NAICS 51); professional, scientific, and technical services (NAICS 54); and educational services (NAICS 61). Industries with a lower percentage of companies active in design include agriculture, forestry, fishing and hunting (NAICS 11); mining (NAICS 21); retail trade (NAICS 44–45); transportation and warehousing (NAICS 48–49); real estate rental and leasing (NAICS 53); health care and social assistance (NAICS 62); accommodation and food services (NAICS 72); and other services (NAICS 81). Design-active companies are least prevalent in the smallest microbusinesses (1–4 employees).

Design-active companies that take a structured approach to design may differ in their commitment to or coordination of design, manifest as the explicit provisioning of resources for design and a design budget. Among design-active companies, 40.3% reported allocating resources explicitly to design and 11.4% reported having a design budget (table 2). Both percentages increase nominally with company size, with the smallest microbusinesses (1–4 employees) being the least likely to report having a design budget. These findings reinforce the coordination interpretation of the indicators where larger companies may have a greater need to allocate resources explicitly and document expenditures.

Who is engaged in design activities and how engagement differs by company size are empirical questions. The assumption that design activities are carried out exclusively by professional designers who are either employed or contracted is not supported by the data, which show that companies report design tasks performed by other occupations, such as engineers or craft workers. Company leadership or managers in key departments, such as marketing or web development, may also routinely perform design activities. In design-active companies, company leadership was engaged in design activities most often (38.9%) whereas occupations other than designers were engaged least often (21.3%) (figure 1). Other occupations routinely performing design activities was most often reported by companies with fewer than 5 employees.

Company size is likely to have a large impact on how design activities are organized. The smallest microbusinesses (1–4 employees) report design being performed by those working independently most often and report use of a small team or design department least often (table 3). Design organized around a single, small team demonstrated the least variation across company sizes. The type of organization selected was not exclusive, so larger companies with a central design department could also report some design activities being carried out independently.

Design-active companies in all states nominally followed a very similar pattern: a majority of companies pursued a styling approach, a smaller percentage of companies pursued a functional approach, and the smallest percentage of companies pursued a strategic approach (table 5). However, because of the relatively small cell sizes for some states, the only statistically verified conclusion is that a styling approach to design was more prevalent than a strategic approach to design in all states. With the strategic approach as the highest rung on the design ladder, it is notable that a significant number of companies in each state regarded design as a central directing element of their business.

The number of employees or contractors performing design activities nominally increased between 2019 and 2021 across all company sizes; however, these differences are not statistically significant (table 6). Most striking when looking at the data is that the number of employees across the company size categories increases much more than the number of employees or contractors performing design activities in either 2019 or 2021. For example, companies in 2021 with 10–19 employees had on average 3.4 design-related employees or contractors; for a company at the midpoint of this size category, the ratio of those working in design to total employment was about 1 to 5. At the midpoint of the 500–999 employee category, this ratio jumped to greater than 1 to 20. This finding from table 6 and figure 2 reinforces findings drawn from the data in table 3 regarding the organization of design in larger companies: a small team or employees or contractors working independently may provide adequate design capabilities in the larger size companies.

The suggestive evidence from table 6 that the number of employees or contractors in design may be increasing is reinforced by expected changes in design activity over the next 3 years. Among design-active companies, 36.1% believe that design resources will increase slightly and 8.9% believe design resources will increase substantially (table 7). Among companies that are not currently active in design, 8.7% believe that design resources will increase slightly. While about half of design-active companies expect no change in design resources over the next 3 years, fewer than 5% of design-active companies expect to see design resources decrease. Among companies that are currently not active in design, more than 10% of companies in manufacturing (NAICS 31–33) expect an increase in design resources.

The statistics from the survey are based on a sample; as such, they are subject to both sampling and nonsampling errors (see the survey “Technical Notes”). The estimates in this InfoBrief are based on responses from a sample of the population and may differ from actual values because of sampling variability or other factors. As a result, apparent differences between the estimates for two or more groups may not be statistically significant. All comparative statements in this InfoBrief have undergone statistical testing and are significant at the 90% confidence level unless otherwise noted. Variance estimation in this report was calculated using replicate weights that incorporate full information about the complex sample design of the ABS.

This InfoBrief is designated as an experimental statistical product, the data tables are not official statistics and should not be used to make official statements or inferences about characteristics of the population or economy. NCSES releases experimental statistical products to benefit users in the absence of other relevant information and to improve future iterations of data collection. Experimental statistical products may not meet some of NCSES’s quality standards and, as a result, users should assess the utility limitations of these experimental statistics relative to the intended use. Official statistics on design activities are available in Tables 62–65.

For the full ABS 2022 (data year 2021), 300,000 employer companies were sampled to represent the population of 4.9 million employer companies, and the unit response rate was 67.0%. ABS 2022 uses the 2017 North American Industry Classification System (NAICS).

The full set of data tables on R&D, company demographics, innovation, technology, and patent and intellectual property protection from this survey is available at https://ncses.nsf.gov/surveys/annual-business-survey/2022. Individual data tables and tables with relative standard errors and imputation rates from the ABS 2022 are available from NCSES upon request.

NCSES has reviewed this product for unauthorized disclosure of confidential information and approved its release (NCSES-DRN24-068).

National Center for Science and Engineering Statistics (NCSES). 2025. The Different Approaches to Design by U.S. Businesses. NSF 25-330. Alexandria, VA: U.S. National Science Foundation. Available at https://ncses.nsf.gov/pubs/nsf25330.

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