| The Product Capital Model defines measures of Product Financial Capital, Product Intellectual Capital, and Product Social Capital, used to monitor the impact of product innovation on enterprise success. Anecdotal evidence suggests "good design is good business." This research seeks support of that qualitative concept by quantitatively connecting design performance to corporate performance. Corporate performance is characterized by the dependent variables, Market Capitalization, Gross Revenues, and Return on Assets.; Product Financial Capital metrics are derived from accounting practices pertinent to product innovation, including Gross Margin, Net Income, and Total Assets. Product Intellectual Capital metrics include corporate research and development expenditures, patent application behavior, and new product introduction rates. Product Social Capital metrics are based on over four thousand online customer reviews, resulting in metrics of Average Customer Ratings and Number of Customer Reviews.; The statistical representation of the Product Capital Model outperforms purely financial measures when predicting the future performance, market capitalization and gross revenues, of the personal digital assistant manufacturers Palm Computing and Handspring. These results demonstrate statistically significant evidence of a positive relationship between design-development performance and corporate performance. Additional evidence suggests that Product Social Capital could be a leading indicator of product sales. An expanded investigation includes two automotive cases, the MINI Cooper and the Ford Thunderbird. The outcome indicates that Product Social Capital metrics predicted product sales three to seven months in advance for the every case but Palm.; This research provides quantitative support for the precept that "good design is good business." The Product Capital Model outperformed conventional financial metrics. The Product Capital Model provides a framework by which the enterprise can rationalize their product innovation endeavors. End user response to product experiences as measured by Product Social Capital proves to be a leading indicator of downstream sales. These results reinforce the role of the design-development team as a source of value creation in the enterprise. And finally, the use of online customer reviews is a rich design research dataset for unraveling complexity in the product-user relationship. The Product Capital Model aids the enterprise in effectively using design for the creation and deployment of innovative products. |
