Financial literacy is an essential component in design innovation projects, holding the potential to transform both the practice and education of design. The capacity to make effective financial decisions, encompassing knowledge, skills, and self-efficacy, is pivotal in the context of innovation (Warmath & Zimmerman, 2019). This capacity empowers designers to manage risks, budget projects, and effectively communicate with stakeholders, ensuring the evaluation of economic viability and sustainability (HBS Online, 2020).
This research underscores the importance of financial literacy within design innovation. By enhancing designers’ financial competence, it shifts their focus from exploratory innovation towards strategic innovation. This transition involves combining elements of exploratory, design, and viable innovation, aligning innovation efforts with long-term project goals. This shift becomes possible by leveraging financial knowledge, resulting in choices that provide a competitive advantage, adaptability to changing market conditions, and entry into new markets (Lusardi & Messy, 2023).
While acknowledging the organisational influence on financial literacy, this research focuses on its significance at a project level, particularly during the fuzzy front end of innovation. The study adopts the double diamond approach, a popular process among design practitioners (Brown, 2009; Martin, 2009; Liedtka, 2014), to evaluate financial literacy's impact on the innovation process.
The culmination of this research is the Design Innovation Viability (DIV) Dashboard, an innovative tool that guides designers and professionals through the intricacies of financial literacy in design innovation. It features a series of 16 learning modules, each focusing on specific components of financial literacy, and provides a structured learning assessment to gauge one's financial competence, by use of Bloom’s Taxonomy.
The implications of this work are substantial, equipping designers with comprehensive financial literacy, enhancing design innovation competence, and enabling effective stakeholder communication. However, it is important to recognize the study’s limitations. it is essential to further explore and expand the understanding of financial literacy in design innovation. Moreover, a more comprehensive framework for presenting a Value Case or Business Case in the final stages of design projects is needed (Duréndez et al., 2023).
In summary, this research pioneers integrating financial literacy with design innovation, making financial competence a fundamental element. The findings resonate with the importance of financial literacy for designers and professionals, reinforcing the significance of making informed financial decisions, assessing viability, and fostering strategic innovation. This work serves as an inspiration for future research in the domain of financial literacy in design innovation, ultimately advancing design education and practice.