Smack in the heart of Toronto's supposedly savvy business district is the latter-day equivalent of an alchemist's den.

It's a place with a magical formula to propel any business to untold wealth. Yet, mysteriously, most of its high- flying Bay Street neighbours are giving it the cold shoulder. And so are the denizens dwelling a few blocks away at Queen's Park whose sworn duty is to enhance Ontario's economic viability.

A fairytale? Nope. Just a deliberately provocative way of describing what's happening, or rather not happening, at the Design Exchange a decade or so after it launched amid fanfares all round.

Ironically, given the corporate and governmental indifference that forces the DX to struggle financially today, its abode was once the epicentre of Canadian business because, from 1937 to 1983, it housed the Toronto Stock Exchange.

Brennan O'Connor, Business Edge
Design Exchange CEO Samantha Sannella poses with the latest exhibit, 50 Designers/50 Costumes, at the centre.

After lying dormant for years, the handsome art deco treasure reopened as the 3,700-sq.-m not-for-profit Design Exchange in September 1994.

Architect and then-president Howard Cohen said its mandate "was based on the belief that design and business are inextricably linked" and was intended "to increase the number of Canadian-designed and produced products and services that are globally competitive."

Both a museum and a resource centre, the DX is comprised of exhibition halls, an interactive lobby space and meeting rooms in which it produces educational programs, exhibitions, competitions, lectures, workshops, publications and advisory services. It houses a permanent collection representing the best of Canadian designs since 1945.

The highlight for most visitors is what was formerly the TSX's three-storey trading floor, which remains virtually intact and crowned by Charles Comfort's famed industrial-themed murals. Today, the too-few-and-far-between businesses that do recognize a good thing rent this superb space for product launches and other showcase events.

Completing the DX took seven years of intense effort, including fund-raising that amounted to $3.8 million from the federal government, $2.5 million from Ontario and $1.7 million from the private sector for capital expenditures. That may sound like a lot, but it contributed zip to the annual operating budget, which now runs at about $3.5 million and includes hefty mortgage payments on the $20-million facility. For running expenses, the DX relies mostly on rental fees for the use of its various spaces.

At the DX's glittering opening gala, then-prime minister Jean Chretien and myriad others extolled its fathomless potential, hailing it as the only such centre in North America and one of a mere handful like it around the world, which is still the case.

Why was everyone so excited? And what's the magic formula that was prized then but evidently considered ho hum today?

It's the DX's ability to inspire, impart and facilitate the calibre of great design and innovation that can catapult any business, city, province or country to their respective forefronts.

How does the DX accomplish these wonders? Well, if your notion of design is that it's basically an expensive add-on to meat-and-potatoes necessities, you've got some catching up to do.

The bottom line, say those in the know, is that good design is really about good business.

Not only does beautiful design enhance our daily lives in small ways personally and big ones collectively, making cities and towns attractive translates into an economic boon because it draws productive residents and well-heeled tourists.

As for design's strictly commercial aspect, current DX board chief Frank Delfino, senior vice-president of furniture maker Teknion Corp., explains: "Thoughtful design increases productivity and supports a company's strategy, culture and bottom line."

Not to mention, adds the DX's firecracker current president and CEO, architect Samantha Sannella, that excellent design enhances products so compellingly that companies can leapfrog ahead of their competitors.

That's what happened with the iPod and Apple computers and other such textbook cases, she says. "So the only conclusion is that design is an investment that cannot be overlooked."

If all the foregoing is true, what light might it shed on the fact that, in the latest Business Week ranking of the 100 most valuable global brands, not one Canadian company made the cut?

A lot, says Christopher Hume. As architecture critic for The Toronto Star, he says he's "never understood why so many businesses don't get that design can be a great differentiator from their competition.

"And we've got all the talent and everything else that's needed right here in Canada. So why do we export so many raw materials and then import them back as finished products? It's crazy."

So convinced is Hume that "businesses are missing a great opportunity" by not hooking up with DX that he volunteered to curate a coming exhibition called Stealing Beauty.

It will focus on "Ontario building projects that are stunning and functional but done on the cheap," says Susan Rutledge, DX's vice-president of development and public relations.

"The point of this look at budget-conscious architecture," she adds, "is to disprove what is so often said to the effect that, 'If we only had more money, we would have made a better building.' " With apparently similar anti-elitist intent, as well as an attempt to feed its skimpy coffers, the DX chose to present, among its 100 or so exhibitions to date, two that were designed to appeal to masses of first-time visitors.

One is the colourful current display of 50 costumes from contemporary Hollywood movies, which was curated by the Academy of Motion Picture Arts and Sciences and the U.S. Costume Designers Guild. Included are duds worn by the stars of such movies as The Matrix, Cold Mountain, The Terminator, 101 Dalmatians and the Austin Powers flicks.

The other populist show was devoted to the late Diana, Princess of Wales, and some of her most famous clothing, and ran for four months last year. Although that exhibit attracted about 75,000 people at approximately $8 a visit, Rutledge says it was so expensive to mount that the DX barely broke even on the effort.

Both of these exhibits were "frankly a bit of an aberration for us," Rutledge says, adding that a more faithful and more successful project was last fall's Plastic: Chemistry, Commerce & Culture in Canada, 1945-Present.

Very much a reflection of Sannella's dynamic new regime at the DX's helm, Rutledge says the "very ambitious" undertaking "was conceived as not just a celebration of plastic material, but of how various businesses incorporate plastic in everything from polyesters, household objects, furniture, sporting goods, cars, breast implants and even Barbie dolls."

For once, what Rutledge calls "the buy-in" from various segments of the business world was so enthusiastic that a soupçon of light may be appearing in the DX's financially gloomy tunnel.

What would it take to parlay that interest into fiscal viability for the DX and stiffly enhanced benefits to Canadian companies? Sannella and Rutledge pounce on the question.

"We have a powerhouse of creativity that is not utilized to its fullest extent," says Sannella, adding that the DX offers many different ways for businesses to gain exposure for their brands, products and services, including plum naming rights for the trading- floor space.

And, says Rutledge, Ontario has 40,000 designers (the third-most per capita in North America, after New York and Boston) poised to help Canadians finally break into those best-businesses lists.

(Terry Poulton can be reached at poulton@businessedge.ca)