By almost every measure, 2014 was a breakthrough year for design and big business. Any list of highlights would include John Maeda joining the ranks of Kleiner Perkins as a partner, Jony Ive re-asserting Apple’s product vision and IBM rapidly building the largest design team on the planet. Beyond all of the hype, we can measure the rise of design in terms of dollars invested by major corporations in design talent. In 2014, design went to the bank! The recent departure of Todd Simmons—the top creative at arguably the most celebrated brand agency in the world, Wolff Olins—for the leadership team at IBM is a fitting bookend to the year.

So, you might ask yourself why leading design firms are contracting or exiting the business just when it has become more relevant than ever to corporate America.

Adaptive Path, a bay area pioneer in User Experience Design (UX), recently exited the business, finding greener pastures as the in-house design agency for Capital One. Smart Design, a pioneer in design entrepreneurship through its groundbreaking work with OXO in the '90s, recently closed its SF office.

Consolidation is nothing new for creative industries like advertising, which is dominated by a few large holding companies. But for the first time, in 2014 we saw Fortune 500 companies—primarily big banks and IT firms—grabbing the biggest share of the design talent pool.

What does this mean for the future of design as an independent field of practice in 2015 and beyond?

The First Wave: Digital Change Agents

This is not the first wave of consolidation in design. I joined the mainstream design industry in the mid 1990s just as a new breed of firms emerged around the rise of the Web. Firms like RGA, Avalanche, Razorfish (who coined the term “digital change agents”) and io360 (my personal favorite) embraced rapidly changing technologies and new distribution platforms to radically rethink how consumer experiences were created and shared. The work was not only groundbreaking, it was immediately accessible and replicable simply by viewing the source code in your browser. These designers were able to riff on (and rip off) each other’s work in real time. On the Web, the digital experiences these pioneers created could sit side-by-side with the best efforts of major media properties from Time Warner and others—outshining the corporate efforts every time. In comparison to these firms, the stalwarts of product design like IDEO and Smart seemed outdated and slow to adapt to the “new economy” with their fabrication shops and user research-driven methods (anyone remember the Audrey?).

Robert Fabricant's About Robert Fabricant is a frog Fellow and the Co-Founder and Principal of Dalberg’s Design Impact Group (DIG). Robert is co-authoring a book on User Experience with Cliff Kuang, Articles Editor at Wired Magazine.

Where are these pioneers today? By 2001 every single one of these firms had been acquired as the shiny digital toy for a large-scale advertising conglomerate like Omnicomm or Interpublic.

To folks outside the creative industries this may seem like a natural progression, with obvious synergies between digital experiences and marketing budgets. But advertising and design are fundamentally different businesses: in the world of advertising, user experiences are typically a loss leader to sell media buying services that are much more reliable and higher margin. Design, by contrast, is studio-driven, not account-driven—and does not benefit from the reliable, recurring revenue streams of ad spends. Ideas are not a loss-leader, they are the core value for design. __This difference may not be visible to corporate buyers, but it is quite meaningful to creative talent, the lifeblood of both industries. If you walk into a meeting in which you are pitched fully-formed concepts as part of the sales process, you are probably not talking to a design firm. __

The Second Wave: Innovation Consultants

While the digital pioneers of the late 90s were rapidly disappearing, the heavyweights of the product design world re-crafted themselves as consultants at the forefront of innovation leveraging rapidly changing consumer expectations and a renewed interest in human-insights. IDEO took the lead in embracing a broader application of design “thinking” that is divorced from the shiny outputs of websites, consumer products or digital gadgetry. Working closely with A.G. Lafley of P&G, IDEO legitimized this broader notion of human centered design (HCD) as a powerful (and scalable) approach to innovation in large organizations.

I was fortunate to join Frog at the time and helped drive our transformation from a firm organized around design outputs—products, packaging, brands, websites—to one organized around integrated disciplines like design research, interaction design and experience strategy. This shift in strategy allowed Frog to play a similarly transformative role for large clients like GE and Disney.

In this new era, one of the most talked about fields to emerge from design was User Experience. One of the first firms to embrace UX was Adaptive Path (AP)1, a startup founded in 2001 by a group of Bay Area designers including Jesse James Garrett—who put his stamp on the concept of UX with the celebrated infographic “The Elements of User Experience".

AP rose to prominence not just through the quality of their work, but by building a side business running UX conferences that introduced the concept of user experience design—as well as the AP way of working—to product managers from every conceivable industry.

That was a pretty clever way to build your client base but hard to see how this wing of their business will now survive the Capital One merger. Will senior stakeholders at Capital One be happy to continue to share AP’s UX gospel with the folks from Fidelity or American Express—both of whom are building robust UX design teams?

The Third Wave: Venture Design

Increasingly, innovation has become synonymous with the startup market. Smart Design was a true pioneer in this space, launching their partnership with OXO starting in 1990. More recently, firms like Fuseproject (which recently sold a majority stake to a Chinese holding company) and Ammunition have taken this approach to the next level launching similar partnerships with Jawbone and Beats, helping to drive product innovation and business value in commodified categories like headphones and wireless speakers. It was only a matter of time before the VC community took notice and began seeking out startups with a product designer as one of the principals, like AirBnB and Tumblr. Prominent startups like Twitter and Facebook also began to heavily recruit top talent, luring Nick Felton and Mike Kruzeniski (the lead designer of Windows Phone).

The success of these startups cemented the role of design as a core ingredient to the VC model. Kleiner Perkins added design fellows to complement their celebrated program for top engineering students. Joie Ito’s firm Neo acquired the design shop Proof to bring the gospel of “Lean UX” to his portfolio of investments. Suddenly, you could even find startups wiling to trade a chunk of equity for access to design services, a model that Google Ventures continues to drive effectively. This year we have, for the first time, seen design heavyweights such as John Maeda, Irene Au and Tom Hulme join leading VC firms to shape their portfolios of investments.

Mass Extinction: The Corporate Takeover

The startup market, along with the Apple marketing engine, played an essential role in solidifying the strategic value of design to corporate America in recent years.

TED-like product launches have become a right of passage for executive like Jeff Bezos and Satya Nadella, with Wall Street responding appropriately. __Inevitably, big corporations began to see UX as a critical corporate asset, not something to outsource to a third party design firm, who could end up working for your competitors the following year. __

Designers also learned that driving change deep into a product portfolio requires more than design thinking: it requires a seat at the table.

I saw this first-hand working on the UX strategy for GE from 2012-14 with Greg Petroff that led to the build out of a 70-person design team at GE’s software HQ. Fidelity has made a similar investment in design, building out a team of more than 200 including a major outpost in Jersey City to attract New York talent. Building an effective internal design culture to attract and retain creative talent is hard work. So a number of organizations have acquired entire firms as a short cut to corporate design capacity. In addition to the acquisition of AP by CapOne, the last few years have seen Facebook acquire HotStudio and Accenture acquire Fjord, a leading service design firm.

This corporate scale-up is not purely a US phenomenon. Rumor has it that Barclays is now the biggest employer of design talent in London, and Singtel has built out a massive floor for its design team in Singapore. __But no one has been more aggressive in building design into their core capabilities than IBM, which is on track to grow their design team to 1,000 people, making them by most measures the largest design firm in the world. __According to one friend they had 50 designers start the same week this summer. There are rumors that IBM offered a job to every single CMU grad this year in the interaction design program.

In-sourcing could have its upside: design firms have always struggled to capture the true ROI work from the outside, so hopefully corporate partners can do a better job from the inside. You better believe that they will have to, given the scale of investment at places like GE, IBM and CapOne. Budget planning cycles can be brutal in corporate America if you don’t come armed with hard numbers.

Rising from the Ashes: Big Design

The design industry is dynamic. In-sourcing is a new phenomenon that has left the remaining independent firms consistently competing with in-house teams for budgets and talent, putting significant pressure on margins. Financial services and enterprise IT have traditionally been some of the highest margin clients for design firms. So it is no surprise to see Smart Design’s departure from SF—as well as Jump’s recent departure from NYC. Only the biggest firms seem able to navigate this new world order effectively. Both Frog and IDEO have the scale to straddle all these models, recently launching venture arms.

So, why is an independent design business important to anyone who is not in the field? The first answer comes back to YOU: the user and consumer. Design has had an outsized impact on your life in recent years, because designers are deeply committed to advocating for user needs / wants / desires in the face of corporate inertia. This gets much harder to do when designers are on the inside.

More importantly, design is increasingly critical to addressing issues that sit outside a single corporate mandate or organizational footprint. In 2013 Clinton Global Initiative dedicated its annual meeting to showcase the role of design in social impact and international development. In the pages of Wired, Melinda Gates famously picked human-centered design as the single biggest driver of social change in the last few decades. If this seems surprising to you, then you might want to check out this illuminating report from the World Bank that profiles projects in which “The Bank” invested in human-centered design to improve the appeal and usage of mobile money services for the BOP. What can you say when the World Bank is tapping more outside design talent than Citibank?

As we look ahead to 2015 and beyond, who will explore these new frontiers for “Big Design”—as my friend Richard Tyson refers to it—without a thriving and independent design community. Large firms like Frog continue to dedicate significant efforts to this sort of work, but it will get harder for other firms to follow their lead if the pool of big clients in financial services and enterprise IT continues to shrink. More importantly, where can talent go to work on these sorts of Big Design problems as the focus of their design practice? That is why Ravi Chhatpar and I are building the Design Impact Group, a design and innovation team at Dalberg, an independent, mission-driven strategy firm in the social sector. Never has an independent design business been MORE important to both business competitiveness and social impact—or harder to sustain.

1Correction on Monday, January 5: An earlier version of this story incorrectly stated that Adaptive Path was created by alumni of Carnegie Mellon.