State of design and make
Autodesk, partnered with Ipsos
THE State of Design & Make report is a global, annual study for leaders who design and make places, objects and experiences. It identifies the most pressing drivers of change that are shaping today’s business decisions and helps leaders make informed, strategic decisions about how to prioritise and invest in the future. Autodesk partnered with Ipsos to survey and interview industry leaders, futurists and experts in the architecture, engineering, construction, and owners (AECO); design and manufacturing (D&M); and media and entertainment (M&E) industries from countries around the globe.
Challenges with talent, costs and global uncertainty
When asked to name the top three challenges facing their companies today, 48% cited the difficulty of attracting and retaining talent. The second most common challenge was cost management, cited by 40% of respondents, followed by the global economy and global events, including crises such as wars and pandemics, cited by 36% of respondents.
These efforts come on the heels of a challenging era that required companies to make significant operational changes. Although these challenges affected companies of all sizes in all sectors and geographies, the data did show some significant differences among companies in different categories. For instance, 40% of the respondents from large companies and 37% from medium-sized companies cited the global economy as a challenge versus 31% of those from smaller companies.
Meanwhile, 52% of the respondents from medium-sized companies saw talent as a top challenge, while only 42% of those from smaller companies and 46% of those from larger companies did. 56% of US respondents cited talent as a top challenge and 47% cited cost management, more than those from other countries. Respondents in China were less likely to mention these as top challenges, with 40% citing talent and 30% citing cost management.
Business resilience emerges amid uncertainty
Leaders and experts report widespread uncertainty about the future, but they also report high levels of preparedness. Global events during the past several years have forced businesses to change their operations and make new investments. Respondents from companies that are more digitally mature say they’re better positioned to handle change. Still, even respondents from organisations that are less digitally mature report an array of benefits from digital transformation.
Businesses are looking at new ways to respond to clients faster, as well as opportunities to increase existing services and expand into new markets. These efforts come on the heels of a challenging era that required companies to make significant operational changes.
52% of respondents said their companies changed how they worked to offset the impact of the COVID-19 pandemic and 50% said the pandemic changed how the organisation managed its workforce.
In addition, 40% reported that the pandemic spurred their companies to find innovative ways to meet customers’ needs, 33% said it led to a rethinking of the company’s priorities and 30% said it led to unplanned technology investments. Anonymised usage data from Autodesk customers in the AECO industries also showed this pattern, with a 57% uptick in the consumption of cloud resources in the first year of the pandemic.
Digital maturity is a differentiator
Digital maturity appears to be correlated with how well-prepared companies are to handle change. Respondents from companies that are less and more digitally mature said they feel uncertain about the future at similar rates (77% and 83%, respectively).
Companies are struggling to attract and retain skilled workers, and this challenge is leading to tangible negative business impacts, including project delays.
However, the gap was much larger when respondents were asked whether their companies are well prepared to handle uncertainty – 72% of respondents from more digitally mature companies said their organisation was well prepared to handle unforeseen geopolitical changes, significantly more than the 52% of respondents from less digitally mature companies who expressed such confidence.
Among companies identified as more digitally mature, 40% said digital transformation had helped them to launch products and services more quickly, and 39% said it increased innovation/ better ideas. 37% cited each of the following benefits of digital transformation; the ability to scale the business more easily/faster, more satisfied customers, and reduced costs. Even companies in the early and middle stages of digital transformation reported benefits from their efforts.
For instance, 43% of respondents from organisations that are less digitally mature said that digital transformation had helped them to lower costs, 37% said it had led to increased innovation/better ideas, and 36% said it had helped them to launch products and services more quickly. At companies that respondents identified as ‘very effective’ at leveraging data, these benefits were often more pronounced.
For instance, 43% of respondents from these companies reported that digital transformation has helped their organisations increase innovation, compared with 34% of respondents from other companies.
Talent: The most prevalent challenge
Companies are struggling to attract and retain skilled workers, and this challenge is leading to tangible negative business impacts, including project delays. Rather than letting go of employees who lack the skills that companies need, managers are opting to train new and existing employees. 48% of respondents across industries cited attracting and retaining talent as a top challenge for their companies, more than any other factor.
This challenge was more pronounced in the M&E fields, where 53% of respondents cited talent as a top challenge, but talent was also the most cited factor in both D&M and AECO. The data backs up what has become conventional wisdom over the past couple of years, as companies around the world have reported struggling with labour shortages. 72% of respondents said the workforce has evolved more in the past three years than it had over the previous 25 years.
This may be surprising, given all of the workplace changes – including the rise of email and smartphones – that occurred during that quarter century. However, survey respondents and interviewees highlighted the impact of more recent workplace changes such as widespread remote work, ubiquitous digitisation, and increasingly global operations at many companies.
Despite the magnitude of the challenge of attracting and retaining talent, only 15% of respondents identified employee satisfaction among the top two business performance metrics tracked at their company – less than half the number who cite any other major metric.
The data also shows that large numbers of organisations are making, or planning to make, increased investments in training programs, as well as strengthening their employee recruitment and retention efforts.
Companies struggle to find skilled employees
67% of respondents said that their companies struggle to find employees with the right skills and 64% said that access to skilled employees presents a barrier to business growth. In addition to skills, demographic shifts present a challenge. 45% of respondents said that the workforce is aging ‘rapidly’, and 42% said their companies are too slow to adapt to the needs and desires of the younger generation of workers.
71% of survey respondents said they had faced increased competition when recruiting and hiring highly skilled employees over the past 12 months. Most also said that this difficulty was leading to several specific business challenges. For instance, 59% said they experienced project delays over the past year from a dearth of talent, 52% said that an inability to find the right talent prevented their companies from meeting innovation goals, and 50% said that employee turnover hindered their company’s ability to meet overall goals.
Interestingly, large percentages of respondents who did not indicate that talent was a top challenge nevertheless said they faced these obstacles. For example, 65% of such respondents said they’ve faced increased hiring competition over the past year, 62% said that they have difficulty finding employees with the right skills and 51% said their companies have been forced to delay projects due to talent gaps. In other words, even for many organisations where talent is not a top three challenge, the data shows that it remains a formidable obstacle.
Training and technology fill talent gaps
An overwhelming majority of respondents agree that training is important to their companies. 49% said that employee upskilling is ‘very important’, and an additional 44% said that it is ‘somewhat important’ – for a total of 93% who agree on the importance of upskilling. Notably, this is one of the broadest areas of agreement across the entire survey.
Largely, respondents agreed on the importance of training at similar rates across industries, companies of different sizes, and digital transformation maturity levels. However, a country by country breakdown of the data did reveal some differences. China was among the top countries in this category, with 97% of respondents agreeing that training is important. Respondents from Japan were least likely to agree (79%).
Business leaders are saying that they are looking for employees with broad, transferable skills (such as problem-solving and collaboration) who can then learn more job and industry specific skills after they are hired.Broadly, respondents said their companies are using upskilling to shore up talent gaps. 56% said that their companies have hired employees who do not have the skills needed for the job and plan to provide these employees with on-the-job training.
This dynamic also showed up in interviews, with some business leaders saying that they are looking for employees with broad, transferable skills (such as problem-solving and collaboration) who can then learn more job and industry specific skills after they are hired.
This commitment to upskilling also seems to be reflected in the relatively low rate at which respondents said their companies have terminated under-skilled employees.
Although a majority said they had experienced all other cited employee management issues over the previous year, only 29% said their companies had let people go over the past 12 months due to a lack of technology skills. Respondents from small companies face larger obstacles related to training, with 46% saying they lack the skills and resources needed to design internal training programmes – more than those at large companies (39%).
Respondents from companies across the spectrum of digital maturity experienced issues related to talent at nearly identical levels. For instance, respondents from companies that are more digitally mature were only three percentage points more likely than those from less digitally mature companies to say that access to skilled employees is a barrier to their organisation’s growth (65% vs. 62%) and only one point more likely to struggle to find people with the right skills (68% vs. 67%). However, respondents from companies that are more digitally mature were more likely to say their organisations were taking active steps to solve these talent related challenges.
When survey respondents were asked to identify the most important technical skills for their company’s workforce over the next three years, those working in architecture services cited skills related to technology use, monitoring, and control more than the average across industries.
Respondents in both engineering services and energy and natural resources mentioned skills related to technology design and programming more often than others, and respondents from automotive and other transportation companies emphasised innovation and business development more than those from other industries.
Sustainability goals
The survey data contains both good news and bad news for those concerned about environmental sustainability. 83% of respondents said that it was important that their companies achieve their sustainability goals, and only 7% perceived that their industry/organisation is doing nothing in this area. 54% also said that their company’s sustainability initiatives are a key part of their business growth plan, 52% said that they wish their companies prioritised sustainability as much as profits, and 52% said that they are proud of their company’s sustainability initiatives.
Nevertheless, only 20% of respondents ranked sustainability among the top challenges facing their organisations. This is significant, as those who cited sustainability as a top challenge were nearly three times as likely as others to report that their companies are engaged in sustainability-centred activities.
In the United States – the world’s largest economy – 19% of respondents said that their companies and industries aren’t engaged in any sustainability-related activities at all, a far higher portion than any other country. Also, just 70% of American respondents said that it is important for their companies to achieve their sustainability goals, lower than the rest of the world.
Although most respondents said that their industry or organisation has made changes to improve sustainability, these efforts are spread across a wide variety of activities. No single sustainability initiative was cited by a majority of respondents. Among the top sustainability changes that companies and industries have already made, 35% of respondents cited decreasing waste from production or using more recycled materials, 30% said companies and industries were designing products with sustainability impacts in mind, and 30% mentioned the application of sustainable design principles.
There was significant overlap when respondents were asked what steps they expect their companies and industries to take over the next three years. Here, applying sustainable design principles took the top spot, cited by 34% of respondents. 32% said they expected their companies and industries to decrease waste from production or use more recycled materials, and 31% said they expected their companies and industries to develop or invest in more energy-efficient processes or machinery. Overall, 94% of respondents said they expect their industry/organisation to make sustainability-focused changes in the coming years.
Survey data showed several differences in sustainability actions by company size and geography. Most consistently, respondents from large companies reported that their industry/organisation had made sustainability-focused changes at higher rates than respondents from small and medium-sized companies. This may be explained by capacity, as small companies typically lack the resources needed to maintain a dedicated sustainability team that can implement ambitious initiatives and track them over time.
19% of US respondents – double the portion of any other country – said their industry/ organisation had not undertaken any sustainability initiatives.
Japan took second place with 9%. Among Chinese respondents, only 1% reported that their industry/organisation had done nothing to improve sustainability.
However, the United States did rank near the middle of the pack for several specific sustainability initiatives.
Generally, European respondents reported the highest levels of sustainability-centred activity. 37% of German respondents said their industry/ organisation had designed products while considering environmental impacts, 42% said they had increased renewable energy use, 36% said they had developed or invested in more energy-efficient processes or machinery) and 30% said they had helped customers decrease their carbon emissions.
France led the way in the portion of respondents whose industry/ organisation had decreased waste from production or increased the use of recycled materials, with 47%, and the portion that said their industry/organisation had participated in carbon project financing, with 23%.
Conclusion
Business leaders and experts said that they will increase investments in technology, product development, sustainability, talent, and other areas even more over the next three years than they did over the past three years. And more digitally mature companies are increasing future investments at higher rates than other companies.
Across industries, more business leaders and experts said that access to skilled talent is a top challenge for their companies than any other factor. In addition to hiring from outside their geographical areas and continuing to make investments in remote work, many businesses are investing in training for new and existing employees to ensure that their workers have the skills needed for the company to succeed.
Facing pressure from customers, investors, employees, and regulators, companies are taking concrete actions to meet environmental sustainability goals. Business leaders and experts expect these steps to achieve a long-term business payoff, with most saying that sustainability measures will eventually become sources of revenue for their companies.
Ultimately, these challenges and solutions do not exist in silos, but rather intersect with one another. By working across all three areas, companies are taking charge of their future and preparing for success in an unpredictable world.
Autodesk, partnered with Ipsos autodesk.com
This article is derived from the State of Design & Make 2023 report by Autodesk and Ipsos. Reprinted with kind permission.
