Dirk Knemeyer

The future of UX agencies

The future of UX agencies, November 4, 2014

A short comment contextualizing the prediction could go right here

[…] To be clear, we are in the early stages of a down cycle for digital agencies. We’ve seen this ourselves at Involution, with a decline in good leads and an overall decrease in realized billable rates compared to 2011–2013. But we’ve been aware for some time that the agency business is punctuated by up and down cycles. Sometimes a decline is related to macroeconomics, such as after the dot-com crash and 9/11 one-two punch in 2000–2001, or during the great recession of 2007–2011. In such cases, agencies are usually the first to get hurt but are also the first to recover. However, since the U.S. economy continues performing well, it is unlikely that macroeconomics is behind the recent slowdown in the digital agency business.

[…] There is a trend toward companies building internal design and UX capabilities in lieu of outsourcing.

[…] There is an abundance of junior, inexperienced talent.

[…] So, given all of this, why shouldn’t these trends cause panic for UX and digital design agencies?

[…] before long, there won’t be enough skilled leaders and, like with offshored engineering, catastrophic failed initiatives that cost years of time and/or millions of dollars will lead to a renewed demand for fast, skilled, and effective external design support.

[…] The best creative people won’t want to be in corporations for very long.

[…] External agencies have inherent functional strengths: we work faster and we’re more tightly tied into bleeding-edge technological developments and creative cultures across all industries.

[…] The total cost of agency engagements can be less, perhaps significantly, than internal resources.

[…] So, fear not, intrepid agency owner or happy-to-be-there staff: while some of us may go away as this trend catches wind and the market changes, the future for digital design and UX agencies remains promising. We may end up calling ourselves something different, or positioning ourselves in a new way. But, at the end of it, external creative organizations are essential to businesses striving to be better. The work will be there.