Abstract: This dissertation analyzes the industrial design industry in the United States, and examines the competitive characteristics of firms in this sector. Data for the study come from a national survey of 85 industrial design companies. The dissertation tests two main propositions. First, users of external design services might be expected to benefit in terms of a wide range of possible effects, including reduced defects rates for new products, better ergonomics and styling, and improved product performance. Second, the most successful design companies might be expected to be those that offer a complete range of innovation-related services, ranging from applied research to product design, testing, and market analysis. These propositions are framed against a variety of theoretical insights gleaned from the recent literature on industrial innovation. This literature includes important work by economic geographers on the role of advanced producer services in regional industrial development and firm-level innovation. The empirical results can be summarized in terms of four principal themes. First, the sample consists of three distinct types of firms (Tier-I, Tier-II and Tier-III). Tier-I firms are described as 'total package providers', or TPPs. These firms offer research, design, and marketing inputs, as well as a wide range of related services. Tier-II firms primarily offer design and marketing services, whereas Tier-III firms offer design services only. There is a distinct performance gradient across these three groups in terms of recent employment growth, profit expansion, and sales development. The TPPs lead the pack by a significant margin. A second finding is that the recent business performance of the survey firms has been superior among those that have cultivated non-local markets (both domestic and foreign). A third finding is that most firms compete upon the basis of longstanding relationships with existing customers, and that service delivery involves contact-intensive interactions with customers. Trust-based relationships are found to be particularly important. Clients are chiefly interested in service quality, timely input delivery, and creativity. Other competitive factors such as price are found to be of minor importance. Finally, the survey data suggest that the most successful firms invest heavily in design research, human capital, and new technology. These findings are discussed in relation to the dissertation's two main propositions. Contrary to some of my initial expectations, no significant regional variations in the competitive characteristics of the survey firms were found. An important exception concerns sector focus, in that design firms tend to develop skills that reflect the structure of industrial demand in their home regions. From a geographical perspective, the single most important finding is that business performance tends to vary directly with the spatial scope of markets served. TPPs serve wider market territories than their lower-tier counterparts. TPPs are also found to be more export-intensive than non-TPPs. (Abstract shortened by UMI.)