Hi Gunnar,
Thanks for your question. I guess I didn't explain things well.
Imagine a designer having spent a couple of months work designing a
wonderful new iPhone App. They've identified the gap in the market, defined
all the details of the apps functionality and navigation, done the user
testing on paper prototypes, created the GUI design and designed all the
branding, promotion and marketing. All that's needed is to pay some
hard-earned cash to have the app coded in Objective C or Cocoa or whatever.
The big 'transaction' is the 'design of the iPhone app'. Having the app
coded is a 'transaction cost'.
An example from my current work. I'm designing new small eco-houses
(something I'd worked on 20 years ago). My current interests are the shapes
and configurations of the building and rooms for usability and environmental
efficiency, and new material and manufacturing methods etc. Designing the
houses is straightforward using Revit and I could construct them now using
the Revit drawings. Before they can be sold or built, however, I need to
employ a building designer to rework the designs to align with the
requirements of the local shire building office. The main transaction is
'designing the houses' and the 'transaction cost' is 'employing a designer
to make the 'official' designs for the shire building control department'.
Another example, a neighbour has just put together a business providing
maintenance services for rental property. The big 'transaction' in that is
'creating a maintenance business'. As part of that transaction, he needs to
spend a few dollars on branding for his van and some flyers and headed paper
created by one of the local design firms in the city. The cost of that
design production is a 'transaction cost' for him.
I hope that makes it clearer.
Best wishes,
Terry
-----Original Message-----
From: PhD-Design - This list is for discussion of PhD studies and related
research in Design [mailto:[log in to unmask]] On Behalf Of Gunnar
Swanson
Sent: Monday, 1 August 2011 8:05 AM
To: Dr Terence Love
Subject: Re: Transaction costs (was 'measuring the impact of design in
product development')
On Jul 31, 2011, at 12:18 PM, Terence Love wrote:
> I suggest the reasons for how and why design activity occurs, and how it
> will be done in the future, are primarily linked to transaction costs.
I'm a little slow here. What turns design production costs into "transaction
costs"?
> To recap, it is emerging that the concept of transaction costs is an
> alternative and potentially more useful way to understanding the
development
> and future of design activity than conventional approaches.
How is this "emerging"?
Gunnar
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