First off, what is the mission of the Center for an Urban Future?
CUF is a public policy think tank specializing in economic development and workforce development issues. We focus primarily on the five boroughs of New York but have done comparison studies of other big US cities. One thing we’ve been studying for years is the need for New York to diversify its economy. The city has traditionally been so focused on financial services and real estate and, to a lesser extent, media and advertising that it has failed to notice its other economic assets. So every year we try to profile a sector in New York that shows potential for growth with the hope that city economic development officials will take note and develop supportive policies. We’ve done studies on biotech (before that was big), food manufacturing, video game development and health information technology. Our report on design is in the same vein, though going into it we already knew the sector was strong. In our 2006 Creative New York report, which was an attempt to define and quantify core creative sectors in New York, we saw that the applied design fields had more firms than advertising, performing arts and publishing combined.
For those who haven’t read the report in full, please summarize your key findings.
We established beyond all doubt that New York City’s design industries, including architecture, are not only an important part of the city’s economy but one that has been growing rapidly over the last decade and will likely continue to grow. Despite the 2008 crash and the depressed economy that followed, the number of design firms in the city rose 15 percent since 2001, which is a much faster rate of growth than most other industries. New York has 3,969 firms in architecture, landscape architecture, fashion, graphic design, industrial design and interior design. That’s 33 percent more design firms than Los Angeles, the next largest city. The New York metro area has 40,470 designers, a majority of whom don’t work at design firms, and that’s 75 percent more than the next largest city which, again, is Los Angeles (with 23,160 designers).
When you look at the proportion of employed people in New York who work as designers, you’ll see the city has a much higher concentration of designers than any other major US city with the exception of San Francisco, which has an equivalent concentration but a smaller number. Economists measure an industry’s geographic concentration in order to get a sense of how much it is exporting to other places; if the concentration is much above the national average, then it is likely serving more than just local needs. New York’s design cluster is well above the national average. That’s a good sign.
Did you (personally) have any assumptions about the design industry going into this project?
It’s hard to live in New York City and not have a few preconceived notions about design. Design is everywhere here, fashion is everywhere — it’s all over the people on the street, in most stores in Manhattan, and on subway advertisements. But recently, I think, the whole city has become much more conscious of design, with Brooklyn Bridge Park and the East River Waterfront esplanade going up at the same time this last year, and the World Trade Center memorial slowly being realized and Governors Island opening up to the public. A lot of smart design and quality architecture has happened in the city over the last five years, and I think it has raised awareness of design’s importance and value.
Landscape Architects Designing | via Green Mission
How did you come to define “design” in your study? Does your definition differ from a standard used by the government in labor research?
One thing we uncovered was the difference in the design field between industry employment and what the Bureau of Labor Statistics calls occupational employment. Typically, economic development analysts and economists will use industry employment (categorizing companies by sector) as their basic metric for judging the size and growth of a particular field. This doesn’t work very well with designers. For example, in New York, there are about 1,100 graphic design firms and something like 4,500 people who work at those firms, but that represents a small fraction of the graphic design industry, since, it turns out, most graphic designers work for companies in other industry categories like finance, media and publishing. According to another survey that asks employers to categorize their employees by field, there are 16,000 graphic designers in the New York metro area, and, since the Occupational Employment Survey won’t capture freelancers if they’re not counted as employees, there are likely many more.
Our on-the-ground reporting does much to explain this gap. From talking to designers and people from other sectors, we know that more and more companies, whether they’re banks, museums, universities or retail businesses, are deepening their internet presence. Banks are offering online banking, museums are developing online catalogs, universities are offering online courses and so on. And their design departments are expanding as a result. In 2000, the Occupational Employment Survey found just 6,700 graphic designers in the New York metro area. Nine years later, it turned up 16,000. That growth would have been completely invisible to someone looking at industry employment data. If anything they would have found a slight drop in employment and wondered to themselves why graphic design was doing so poorly.
What were the biggest surprises that emerged from your research?
I’m not sure surprise is the right word, but the field I knew least about was industrial design. New York has a larger industrial design sector than I expected. It has more firms and people than any other US city. But in terms of influence, it trails the San Francisco Bay Area and Boston, where the tech boom has led to a lot of work designing consumer electronics and software interfaces. A lot of cutting-edge industrial design work in New York revolves around consumer experience research and consulting on innovation strategies for large manufacturers. One designer told me that if industrial designers would get more involved in New York’s tech scene it could lead to a lot of growth. Designers are more willing now to forgo upfront consulting costs and instead take investment positions or royalty positions in these young start-ups, and since they’re really good at developing and sharpening prototypes they could bring a lot to the table. That’s actually an area city officials could focus on.
What have you identified as some of the key drivers of growth for
the design industry, both globally and for NYC?
Design will continue to grow in large part because it is so exportable. Fashion designers, industrial designers and architects, in particular, are offering a service that, first of all, is difficult: it requires skill and research and practice, and all of those things benefit from proximity. Second, it’s a service that is experiencing a rapid rise in demand in other parts of the world. The fastest growing consumer markets in the world right now are China, India, Singapore and Brazil. Those countries are investing heavily in their cities and their middle classes are growing faster than we’ve ever seen. What they don’t have is a lot of home grown design talent. Chinese developers are tapping American and European architects for their biggest developments and in a lot of cases giving them carte blanch to do whatever they want. Asian manufacturers are similarly looking to American and European fashion designers and industrial designers for consumer products. One major Korean textile company recently opened up a big design studio in Chelsea in order to develop fashion brands for Chinese consumers. They didn’t go to Chinese designers for that. This is a built-in advantage for New York as well as for the country, but the city, state and federal governments need to do more to facilitate our dealings with these countries.
In the spring of 2010, President Obama outlined a National Export Initiative that hopes to create jobs by doubling US exports over the next five years. But at the state and local level, very little is being done to achieve that goal. New York State has repeatedly cut its export budget, and the State now spends $1.5 million per year on export assistance. $1.5 million doesn’t go very far, as I’m sure you can imagine. Other places spend many times that. I’ve been told that Ontario spends $70 million per year on export assistance. Meanwhile, most federal and state programs focus overwhelmingly on manufactured goods and agricultural products rather than services, and they look primarily to Canada, the UK and Israel — those are our biggest trading partners, but their consumer markets are also not growing anywhere near the rate of China or Brazil. I think this would be a great opportunity for New York City to step in and begin an export strategy of its own. Right now, as far as I know, the City doesn’t have an export strategy at all. Design would be a good place to start. Designers are already dealing with clients in China and other fast growing markets, and there’s good reason to believe that will increase over the next decade. According to the financial services firm Credit Suisse, China is poised to become the world’s largest consumer market by the year 2020.
How do design clusterings and productive adjacencies influence the
Designers depend on communication and visual information sharing, which, despite technological advances, still happens most efficiently in person. In his book Triumph of the City, the economist Edward Glaeser cites studies that show steep rises in long distance air travel as advances in telecommunications increase, and telephone calls appear to take place most often between people who are geographically close. A little contact, a little information sharing, apparently begets the need for even more. Many of the designers I interviewed said, even between competing firms, there was a lot of idea sharing, enabling a person or firm that did not originate an idea to carry it to the next level. In New York, designers have definitely carved out geographic communities. There’s the Garment District of course, but also DUMBO, Bushwick, the Starrett-Lehigh building in Chelsea, the Brooklyn Navy Yard and the Old American Can Factory. In those places you have designers working with other designers but also a panoply of service providers like iPhone application people, product photographers or pattern makers. Those kinds of adjacencies lead to all kinds of productive exchanges that, collectively, push ideas and new methods forward.
Graphic Design Office | via The Office Stylist
What challenges are emerging to the future viability of New York’s design sector and its prominence on the global stage? The report makes clear that economic development agencies haven’t
historically paid attention to the design industry. What kinds of
economic development strategies do you think would benefit this
I think the biggest challenge in maintaining New York’s prominence in design will be making sure that the venues and organizations that make information exchange possible are allowed to continue and grow. Unlike most other industries, even knowledge industries like software development, designers depend heavily on cultural non-profits, industry groups, publications and galleries. These organizations provide context and space for the meaningful exchange of information, they get people excited and inspired, but they rarely capture that value monetarily. A vast majority of designers don’t make a lot of money either, and they have to spend years apprenticing at firms for next to nothing, so making sure that New York is a place where both underpaid organizations and underpaid individuals can physically survive is incredibly important. It’s definitely a hard thing for the city to address. It encompasses so many different things including land-use policy, transportation, student visa and H1-B visa processes, and on and on, but its importance can’t be stressed enough.
There are a lot of other, more targeted things the city could do to support growth in the design industries. In the report, for example, we recommend that the city look to London’s Design Festival as a model for capitalizing on and connecting the city’s various design-oriented trade shows in the spring and fall. London’s festival is really neighborhood-centric in that local groups are encouraged to create hubs with their own idiosyncratic styles. Some neighborhoods put on street events and parties, and others build site-specific installations like toothpick cathedrals. That could galvanize other institutions like the big design schools and museums to collaborate more, but it probably needs a big initiative from the city to get it going, and perhaps some continued coordination and marketing later on.
Etsy offices in DUMBO | via mashable.com
David Giles is the Center for an Urban Future’s Research Associate. In his two years at the Center, he has written about the need for New York to diversify its economy by looking to sectors like health information technology and the problems many of the city’s small businesses have had in accessing energy efficiency incentives.