An article on eMediaWire summarizes a report from Strategies for Management, Inc. (SFM) called “The U.S. Graphic Design Business 2004—2009.” You can buy the report for $2,875 (no, I won’t go in halves with you; that just wouldn’t seem honest) but the summary is worth checking out for free. As of 2004, it says, the U.S. graphic design industry has over 16,000 individual businesses, 60,000 employees, and over 74,000 freelancers. Industry wide, design firms annually generate $7.8 billion in revenues.
Thanks to David Weinberger for pointing out the article.
I mistrust economic forecasting but the projections don’t exactly make me giddy. “Total industry revenues for both graphic-design businesses and freelancers in 2004 is estimated at over $11 billion, which is expected to top $13 billion by 2009.” Considering how sucky 2004 is/was, an 18% bump in five years doesn’t make me want to run out and start a layaway plan on that jewel-encrusted vibrator I’ve been meaning to get for my wife. The figures on design firm size and revenues are interesting, however.
The report says that graphic design firms employ about 60,000 people (with nearly 68,000 employees expected by 2009.) It also indicates that there are 74,000 graphic-design freelancers (with an expectation of well over 86,000 by the end of the decade.) Even a graphic designer can figure out that this means 134,000 graphic designers in the US. That also means that about 1 in ever 220 Americans is a graphic designer. Surprisingly, the US has more troops in Iraq than it has graphic designers. I suspect, however, that graphic design students outnumber ROTC cadets.
So those total revenues of $11 billion divided up equally come out to a reasonable eighty-two grand gross per designer. Nobody should be too surprised to discover, however, that we aren’t sharing equally. The freelancers’ $3.4 billion comes to an average gross of just shy of $46K. The summary indicates that the 50 largest firms are less than 1% of the number of establishments, but account for over 16% ($1.3 billion) of the industry’s total billings but it doesn’t say what percentage of designers are associated with the largest firms so it’s hard to conclude anything specific from that. They also say that design firms are expected to generate average revenues of $491,000 each in 2004 (over $550,000 in 2009) and that 75% of design businesses employ 1 to 4 people with almost 90% smaller than 10 employees.
The disturbing-but-predictable prediction is that as the freelance population rises, the average gross freelancer income in 2004 dollars is expected to drop by a couple of thousand bucks. The total predicted revenue increase of 18% is, thankfully, greater than the total predicted graphic designer population increase of 14% but that’s not going to the burgeoning freelance population.
What does this mean? Maybe I should hire a few hundred employees. Or go into the jewel encrustation business. I never know how to compare this or the How salary survey (the December, 2004 issue is probably fading off the newsstands and I haven’t seen it) or the Aquent survey to my reality. Is a one-person business that deals directly with clients like a freelancer who works for design firms and ad agencies? (Not to compare myself with Paul Rand but was he a freelancer?) What does/should decades of experience add (or subtract)? What percentage of graphic designers have talent or actual expertise? How many of the freelancers are new grads who aren’t making it and will drop out of the biz after lowering the average for a while?
During the bad times of the early ’90s it looked like one-person firms with low expenses could make more money for a designer than having employees would. What is the best model for the graphic designer who doesn’t have a trust fund these days?
That figure (approx 130K designers in the US) has gone way down from the unofficial estimate (300K) during the dotcom heydays.
But $11 billion is still pathetic as an industry. The ad world probably generates that much a month, easy. Hell, I bet the portable toilet industry collectively generates more than we do per year.
The question is though, how narrow is the definition of "graphic design" firms? Does it include branding agencies? Design research agencies? DM/CRM agencies? What about interactive, motion, and all of the print-hybrid iterations in that category of agencies? Not to mention retail, exhibit, "full-service" agencies that do some or all of the above, anchored by a graphic design core?
Despite all of the doom and gloom, I don't think the industry is structured any differently than it was 10, 15 years ago. The path has always been split between agency life or freelance/contract life? Neither path has ever been stable, and neither have been guaranteed to be more financially lucrative than the other. I know freelancers who make 6 figures, as well as agency veterans. The Aquent survey shows that.
I do see a growing trend of more frequent consolidation and acquisitions of medium and larger firms. The Omnicoms, WPP, and IPGs of the world are picking up notable firms left and right. I'm not sure if that's good or bad. It's just been the reality of business lately.
Really, Wal-mart probably collectively sells more than $11 billion of pet food a year. Just pathetic...
On Dec.17.2004 at 07:21 PM