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The Value of Design Strategies for New Product Development: Some Econometric Evidence

University of Tartu Faculty of Economics and Business Administration Working Paper No. 85-2012

26 Pages Posted: 9 Feb 2012  

Stephen Roper

University of Warwick - Centre for Small and Medium Enterprises

James H. Love

Aston University - Aston Business School

Priit Vahter

University of Tartu - Faculty of Economics and Business Administration

Date Written: February 8, 2012

Abstract

Investments in design play a potentially significant role in new product development (NPD) although there is little unanimity on the most appropriate or effective design strategy. Previous case-study based studies have identified three alternative design strategies for NPD: design used as a functional specialism, design used as part of a multi-functional team and designer-led NPD. Using data on a sample of Irish manufacturing plants over three periods we are able to examine the effectiveness of each of these three design strategies for NPD novelty and success. Our analysis suggests that design is closely associated with success in NPD performance regardless of the type of strategy pursued. Adopting designer-led NPD, however, is associated with a much greater NPD performance than more functionally-oriented strategies. The effects of design on NPD outcomes are also strongly moderated by other plant characteristics. For example, the beneficial role of design on NPD outputs is only evident for plants which also engage in R&D. Also, while both small and larger plants do gain from using design as a functional specialism and as part of multi-functional teams, the additional benefits of design-leadership in the NPD process are only evident in larger plants.

Keywords: design, new product development, design-led manufacturing, Ireland

JEL Classification: O31, O32

Suggested Citation

Roper, Stephen and Love, James H. and Vahter, Priit, The Value of Design Strategies for New Product Development: Some Econometric Evidence (February 8, 2012). University of Tartu Faculty of Economics and Business Administration Working Paper No. 85-2012. Available at SSRN: https://ssrn.com/abstract=2001525 or http://dx.doi.org/10.2139/ssrn.2001525

Stephen Roper

University of Warwick - Centre for Small and Medium Enterprises ( email )

Coventry
United Kingdom

James H. Love

Aston University - Aston Business School ( email )

Aston Triangle
Birmingham, B47ET
United Kingdom

Priit Vahter (Contact Author)

University of Tartu - Faculty of Economics and Business Administration ( email )

Narva Rd. 4-A214
Tartu 51009, 51009
Estonia

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