A recovery is forecast, but it hinges on rebounds in on stabilizing global economy
Los Angeles, CA (PRWEB) September 05, 2012
The Global Graphic Designers industry is expected to generate $43.5 billion in 2012, up 2.9% from 2011. This represents a continuation of recovery following the global recession, which caused a decline in demand as cash-strapped businesses cut back nonessential spending. As this report measures global revenue in US dollar terms, the appreciation of the US dollar in 2009 magnified the decline in underlying demand. Over the five years through 2012, industry revenue is estimated to decrease at an annualized 0.7%. While a rebound is forecast, it hinges on a continued recovery in global economic conditions. Risks to the global economic recovery remain very real, particularly in Europe, which continues to struggle with fears of sovereign debt default and contagion that has moved from the periphery towards the center of the eurozone. “Prior to the downturn, the industry's growth was driven by changing design technology, which provided an incentive for businesses to outsource design activities rather than try to keep up with the latest technology; growth in emerging markets; and increasing competition among consumer appliance makers, particularly electronic goods, which made industrial design input more important,” says IBISWorld industry analyst Craig Shulman. Over the next five years, slowing technology change will allow clients to bring some of the design process in-house, decreasing demand for specialist design services. Design firms will increasingly look to mitigate this by offering consulting advice on the strategic side of design and branding such as market characteristics and trends. Over the next five years, industry revenue is forecast to rise.
Graphic and industrial design firms tend to be small. Even the world's largest firms are estimated to account for only about 1.0% of global industry revenue. This is because there are minimal efficiency benefits to be gained, and therefore limited potential for profit margin expansion from increasing scale. The majority of the industry is made up of small firms operating out of a single location. In graphic design in particular, there are also many freelancers operating out of home offices. Between 2004 and 2008, a rise in the number freelancers is estimated to have boosted growth in enterprise numbers, as the cost of computers with the power to run design software decreased, making it more affordable to freelance. These nonemployers can enter and exit the industry quickly, depending on the level of demand for graphic design work.
Some large firms in the Global Graphic Designers industry benefit from their size, which allows them to serve large global clients with worldwide consistency and fast turnaround times. This is more often the case for graphic design firms than for industrial design. According to Shulman, for industrial designers, size and globalization may bring about some benefits through knowledge sharing across different regions of the world regarding trends in product development and consumer behavior. In both graphic and industrial design, some firms grew by expanding into new markets from initial success in a single market, which built their brand reputation and made it easier to win business in new markets. Many large firms involved in the industry also benefit through vertically integration, thus allowing their design activities to carry easily into their production activities. The most obvious cases of this are advertising agencies and engineering consultancies. For more information, visit IBISWorld’s Global Graphic Designers industry report page.
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IBISWorld industry Report Key Topics
Graphic designers plan, design and manage production of printed materials, packaging, advertising, signage systems and corporate identification (logos). Industrial design, in contrast, involves applying artistic design to improve the product itself, in terms of aesthetics, usability and marketability.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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