The UK Innovation Survey, published in June 2026, found that 9% of businesses reported investing in design activity during 2022-2024, down from 12% in the previous survey covering 2020-2022
The findings come as British businesses face continued pressure over investment decisions. According to the British Chambers of Commerce’s Quarterly Economic Survey for Q3 2026, 17% of firms plan to increase investment over the next three months, remaining at a post-pandemic low.
The latest Design Council research also estimates that design contributed £136.7 billion to the UK economy three years ago, reflecting the economic significance of an activity in which fewer firms are reporting investment.
Kristo Shivachev, innovation management expert and founder of Simple Design Works, said, “Product development involves making a series of decisions, and the earlier those decisions are tested, the more opportunity there is to identify problems before they become expensive to resolve. It is also where businesses can establish what makes a product distinctive, how it delivers customer value and how to protect its margin ahead of launch.
“When businesses are reviewing budgets, the focus should go beyond the most visible costs of bringing a product to market. Investment should support pressure-testing assumptions, understanding consumer behaviour and ensuring solutions deliver meaningful value. Commercial feasibility needs to be tested early: a concept may work in principle, but whether it is viable to manufacture and desirable enough for customers to buy is what makes the difference.
“Something that appears to save money at the beginning of a project can potentially cost considerably more if it results in redesigns, tooling changes or delays further down the line. This is also where strategic input helps create meaningful value for the target customer, with the aim of increasing brand loyalty. Most markets are heavily saturated, and the opportunities a business sees are likely to be visible to its competitors too. Unless development is strategically aligned with user needs and market opportunities, businesses risk falling short of their expected return on investment.”
The survey figures do not show that businesses are deliberately cutting design to reduce costs. Still, they do emphasise the importance of understanding what businesses are investing in, and whether product development programmes are recieving the attention they need.
For manufacturers, these considerations extend past appearance to technical feasibility, customer requirements, consistent production, and commercial viability at the intended price.
34% of UK businesses were classed as innovation active during 2022-2024, down 2%. 47% of large businesses were innovation active, compared with 34% of small and medium-sized enterprises.
The proportion of total innovation expenditure allocated to machinery, equipment and software fell from 35% in 2022 to 29% in 2024; however, internal research and development continued to account for the largest share.
These figures measure different aspects of innovation and do not demonstrate that businesses are deliberately cutting design to cut costs. However, they highlight the importance of understanding what businesses are investing in, and whether product development programmes are receiving the attention they require.
For manufacturers, design considerations can influence more than how a finished product looks. Early-stage development can determine whether a product is technically feasible, meets customer requirements, can be produced consistently, and is commercially viable at the intended price.
Failures to address these questions before production can leave businesses facing additional engineering work, manufacturing complications, quality issues, or delayed launches. Where products must meet certification requirements or perform in demanding environments, late surprises can be costly.
Kristo added, “One of the biggest reasons product development programmes fail is a lack of a user-centric approach. Without a clear understanding of consumer behaviour, businesses can focus on what’s already visible, improving existing functionality or ergonomics rather than identifying new ways to deliver meaningful customer value. A strategy grounded in user needs helps challenge those assumptions and shape solutions customers want to buy, creating a stronger basis for commercial advantage.
“A product can be a brilliant idea on paper but still face significant challenges when it comes to production. That’s why testing assumptions and understanding manufacturing requirements early is so important. The right solution sits at the intersection of feasibility, viability and desirability, and this needs to be worked out from the very start of the programme.
“Businesses don’t necessarily need bigger development budgets to improve outcomes. They need to make informed decisions about where investment can have the greatest impact. Cutting back on design is not just a question of taking on more risk; it can mean handing market position to competitors who keep investing.
“As companies begin planning for 2027, the question shouldn’t simply be how much it costs to develop a product or what a late problem could cost, but what strategic design investment can help them win: meaningful differentiation, stronger margins and a stronger launch.”
