To establish the sought direction, it is paramount that the reader has a clear understanding of the research question with the same perspectives and definitions held by the author.

The purpose of this thesis is to explore if design competence outside of the firm creates value and enables the core firm’s innovative capabilities.

The research question and purpose is further broken down into three separate sub-questions to address and situate the purpose.

> What is the role and value of design in innovation?
> How is value created during concept development?
> What factors enable/increase the core firm’s innovative capabilities, when interacting with external design competence?

What? The following exploration will ascertain if and how design competence outside the boundary of a core firm can create value and enable the core firm’s innovative capabilities.

Why? Design has been described as the heart and engine of the innovation process. Design has the ability to collect, assimilate and communicate new knowledge associated around the creation of a novel concept. The value of design in the innovation process is the competence to articulate creative rationale in the discourse of innovation; an ambiguous and uncertain process.

How? The exploration presented here is based on an extensive empirical investigation. Semi-structured interviews were held with both design and core firms involved in the process and transaction of outsourcing design. Primary data has been collected from leading firms located in Australia, China, England, Germany, Sweden, the Netherlands and the United States of America.

Result! Design outside can help and benefit innovation inside. Specifically through the informal processes structured around the behaviours, methods, and practices required for the successful interaction and transaction between the external design firm and the core firm.

Figure 1: Model of Concept; an illustraion of the transaction according to empirical insight.

Utilising the empirical knowledge of this exploration the ‘model of concept’ attempts to accurately depict and illustrate the arrangement of actors in the process. The ‘model of concept’ is presented to represent and communicate the…

1. Process; and
2. Value Creation; used for
3. Understading the complex non-linear network of interactions…
   

…in the discourse of external design competence enabling the innovative capabilities of a core firm.

The method is the process defined to objectively achieve the research goals. The methodology of a research project is the key to ensure that the research is supported by reason, logic and observation of a scientific nature to assert the validity of the knowledge.The research conducted for this project is considered to be cross-sectional. Cross sectional research refers to investigation which takes a snap shot of the environment in time.

The style of the investigation is considered to be phenomenology; the Non-Positivist approach. The central premise of phenomenology is to understand phenomena in such depth to attempt to understand questions such as: What? Why? And How? Where as, Positivism, is concerned mainly with providing answers of How many? or How much?
For the purpose of this study the definition according to Camus (O’Brien, 1965) is perhaps the most appropriate “phenomenology declines to explain the world, it wants to be merely a description of actual experience”.

The design of the phenomenological research to achieve the cross-sectional exploration resulted in the process to be divided into six major stages: literature review, informal empirical, analytical framework, empirical investigation, analysis and discussion of findings. See Process Schematic Below:

Does design outside, help

innovation inside?

> What is the role and value of design in innovation?
> How is value created during concept development?
> What factors enable/increase the core firm’s innovative capabilities, when interacting with external design competence?