While the increase in internal design spending for 2024 was reported as being slightly higher than external spending, when business leaders were asked what their organization would likely do to address a major innovation or design challenge that arises this year, 76% said they would look to handle with an external firm, while 24% noted they would try to handle internally.

Of that 76%, 35% said they would likely engage with a large design/development firm (e.g., IDEO), 22% said they would likely partner with a global, multifaceted consultancy (e.g., McKinsey), and 19% said they would be more likely to engage the services of a boutique or market-specific design/development firm.

Interestingly, 34% of this subset of respondents who say they would seek external help still noted that they struggle the most with partnering with other organizations to create new ideas externally. This was more for this group than saying they struggle the most with creating (22%) new ideas internally or implementing (21%) new ideas internally.

“Even the most sophisticated businesses are struggling to adequately use partner firms for ideation.”

Overall, executives from companies with 5K+ employees reported struggling the most with establishing partnerships alongside other organizations to create new ideas externally (44%). These responses highlight that despite needing external expertise and resources to meet even bigger design and innovation challenges today, even the most sophisticated businesses are struggling to adequately use partner firms for ideation.

Meanwhile, across vertical industries there are other challenges. Healthcare executives, for instance, highlight difficulty securing budgets for new idea development as their primary struggle (40%). Manufacturing executives, on the other hand, stated they struggle the most with creating new ideas internally (34%). While there certainly has been innovation brought to the forefront in recent years as part of the Industry 4.0 movement, it is a sector that lags behind others in adopting software and new technologies.

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