Design capability and business innovation

The complexity and the turbulence of the current socio-economic system are driving a reappraisal of how innovation is developed, requiring the adoption of a systemic perspective to face challenges that include big issues like the environmental/sustainable imperative and the rapid pace of technological advance. To keep up with the complexity of the new socio-economic environment, effective business strategies increasingly require negotiation between different socio-economic actors (companies, institutions, citizens and so on) working in teams of multi-experts. Enterprise and business models, value systems and strategies for competition are being reformed by the major socio-economic trends, including the importance of the digital and the acknowledgement that innovation goes beyond technology to include concerns on quality of life and social wellbeing. This is also stimulating investments in creativity and co-creation as increasingly considered key assets to shape and envision new scenarios for growth and new job opportunities. In particular, the current European strategies paint the future of innovation as a larger idea of ‘circular economy’ and ‘industrial renaissance’ (EC, 2013) with a mix of technological advancement and people-driven improvements. The European vision also prompts the emergence of a new entrepreneurial culture connected with creative experimentation and renewed paths of integration between business and creativity recognizing the centrality of human, social and digital/technological capitals (EC, 2010). This supports the inclusion of a design thinking approach at higher governmental levels as a driver of non-technological innovation (EC, 2009): design (and design thinking at large) is recognized as a fundamental ingredient in business innovation through its ability to shape ideas and translate them into solutions that are user-focused. From the perspective of design, this recent interest is challenging traditional practices and methods, stimulating experimentation and reflection on how design can have a role in the innovation process, and on the relevant justifications for the investments made in this area by policy makers and businesses. Looking at the connection between design and innovation from an academic point of view, important references can be found in the literature referring to design thinking and design management (Boland and Collopy, 2004; Borja de Mozota, 2011; Brown, 2009; Cooper et al., 2011; Cross, 2010; Dorst, 2010), where strategies to advocate and justify the impact of design in business performance are discussed. Although design is recognized as a function or tool that is widespread throughout all business functions, important discussions still remain about pinpointing and identifying clearly the value that design brings to companies and the society, and the processes and tools to measure it. Building on this gap, the chapter mainly examines how design intervenes in business innovation processes through exploring the most interesting design-driven business strategies that are responding to the current macro-economic transformations. This is achieved by discussing the concept of design capabilities and how this impacts on business competitiveness.