Q: Does Europe Still Offer Growth for Design Studios

Over the last year, I’ve received many questions on running a Design Studio. This series of articles will answer several of those one by one in a public forum.
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Question

If you started a company again right now, would it be in Europe? What country or region for you see the future of growth for Design Studios? What areas would you invest in?

Answer

This is a great question as we become more fluid in terms of talent and clients needs. If I started again, would I start in Europe? Yes and No.

My network and personal comfort is in Europe, and specifically in Amsterdam. There is a lot of great talent here, and as for quality of life, it’s hard to beat. Personally I fully enjoy staying where I am, and the work I have.

But that is by no means to say there is serious growth for design here. In fact, I believe it’s the opposite — I currently don’t see Europe as a high potential growth area. That Europe, especially with concerns over economic stagnation, is entering a period of stasis for design.

While consumer applications and start-ups are more often delivering quality experiences, larger corporations are often times a decade behind regions like the US in their overall investment and understanding of design. For design studios, this means a lack of spending and a difficult client base to maintain.

I’ve presented this stasis and lack of investment towards design in three specific areas that I believe are fundamental to understanding why the upside of design (and great experiences overall) is limited within the European market.

March 20 addendum: To clarify my comment of not seeing high growth in Europe; I do see stable work here. It’s not that there is a decline or no work, rather this article is looking at the potential for growth of design work over the next 5–10 years.

1.Quality of Design Maturity and Culture

In working in Europe for almost a decade, and working in the US a decade before that, for larger businesses, and somewhat in general, there is a lack of maturity, knowledge, and drive towards understanding the full value of design — funny enough from a lifestyle and furniture perspective it often goes far beyond other countries and continents in stylistic elements. However digital experiences, let alone design of those experiences, for the most part hasn’t caught up. I will say there are exceptions, and pockets of great digital work, especially in more northern countries, but overall in the consumer and enterprise application space, there is much left to be desired.

For agencies, corporate budgets are often minimal (on the scale of 1/5 to 1/10 what I might see in the US), design is often visual aesthetic over quality of service, there is a lack of consistent customer feedback (Qualitative and Quantitative), and timelines against budget are often unrealistic. I have found in general, the further north you go in Europe, the more digital experiences are expected to have a high standard of quality — and companies will appropriately allocate time and funds to it. The further south you go, the more frustration people are willing to put up with.

For talented designers, working in Europe may prove frustrating against other countries with stronger experience and design desires. If you can’t keep your A talent, letting in B talent is a quickly sliding scale downward.

2. Limited Market Size

While many people outside of Europe may see Europe as “one country” in reality, it is a multitude of countries, each with their own systems, cultures, payments, languages, and needs.

It’s easier to grow a product in US, China, or India simply for the sheer size of digital population and common regulations and infrastructure. Germany leads the country population in Europe with around 82 million. Contrast that to the US population of 320M or India or China at over one billion. The scale of building technology doesn’t exist on the same level, which will obviously limit investment and potential upside.

3. Technology Regulation

While the EU is ahead of other areas on developing regulation to protect citizens, it’s ability to implement them leaves something to be desired.

GDPR is a good example. I often liked the implementation of it to a three year old child helping their mother cook dinner. They have the right intentions, but it simply ends up a mess. While GDPR was meant to protect people, its unintended consequences meant that it entrenched larger companies, like Facebook or Google and made it harder for start-ups to compete.

Their are discussions of further regulation around data portability policies. If these are done well it could be a huge step in the right direction. Implantation and enforcement will obviously be where the potential future payoff is.

While there are discussions of great policies around additional data portability, there have also been reports of protectionist policies going into place. An anti-competitive market is one of the quickest ways towards sub-par products. Instead of spurring innovation and competition, these policies are aiming to simply slow the extension of technology from other countries within Europe.

From the NY Times — Europe, Overrun by Foreign Tech Giants, Wants to Grow Its Own

The European Union on Wednesday outlined an attempt to restore what officials called “technological sovereignty,” seeking tougher regulation of the world’s biggest tech platforms

Simply put, you don’t compete on a global scale effectively by running slower. You don’t win the best talent by forcing them to work with subpar standards.

While the US and Asia are facing personal burn out, depression, and other issues, the answer is probably somewhere in the middle of aggressive capitalism and regulatory equilibrium.

Where are we seeing growth for Design?

While I love Europe, and in particular Amsterdam, based on the regulation and discussions I see happening, I can’t say I see high potential for design growth and maturity within this region. For those looking to start companies or talent coming into the continent, it may offer unforeseen frustrations or difficulties in driving business.

Over the next 5–10 year, I would look at areas like SE Asia, China, India, and Middle East to grow heavily in their design investment to compete on both a local and global scale.

While areas like SE Asia or the Middle East are still in the infancy of understanding the potential of design and deliver great experiences as a competitive advantage, I do see a quicker drive towards learning how to effectively compete. This in-turn will hopefully grow their companies to invest in design, talent, and innovative experiences.

Want more on Design Entrepreneurship? Check out this ever growing list of articles and view points.