The Red Dot Institute has developed a method using the Red Dot design competition for calculating companies’ design value. In their study they observed design-intensive businesses and sectors in connection with the Red Dot Award. The sector-specific ranking of companies’ design competitiveness can also be used for determining their design quality, which allows companies to be compared in selected industries. The method can be used for calculating the “design revenue” of each market segment and product category based on design investment and operating profit. This design revenue is then multiplied by a weighting factor derived from the company’s design continuity and strengths, and added to a design capital figure, which takes into account factors such as patents. The results of the design award are used as a basis for continuous analysis of design strength and design continuity. For example, the consumer electronics company Loewen, which won 33 Red Dot awards between 2000 and 2009, had a design value of 157 million in 2008, representing a growth of 49 per cent over the previous year. (Zec and Jacob, 2010) Petersen (2007) investigated the links between the IDEA Award and investors’ expectations and found them to correlate in terms of the success on the stock market of award-winning companies. Within a five-year period (2000–2005), the share price of companies that had received the award exceeded that of companies in the S&P 500 index by an average of 6.5 per cent per year. Despite all the abovementioned research, no previously existing generally applicable models or metrics were found by the Design ROI research team. Design has such extensive and often indirect long-term effects on business operations that it has not been possible to identify completely applicable metrics. The industry does not have nationally or internationally established practices for measuring the impact of design investment.
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