The proliferation of design initiatives or policies, as means to drive innovation and competitive advantage, have been encouraged by scholarly studies that show positive causal links between design capability and national competitiveness. In New Zealand, the Government approach for economic development was set out in the Growth and Innovation Framework (GIF) of 2002. Among other things, four key pillars - ‘engaging with sectors’, ‘strengthening the innovation system’, ‘developing skills and talents’, and ‘increasing international competiveness’ - have been identified for strategic interventions to improve the country’s ailing standard of living. In ‘engaging with sectors’, the Government partnered with sector industries and established sector taskforces. As the four sectors are most likely to apply design, creativity and innovation to achieve their goals, it will be referred here as the “New Zealand Design Policy/Initiative”. This paper adopts an epidemiological method to examine the causes of economic decline, and the challenges of nearly a decade of sector engagement in the New Zealand Creative Industries. Based on current statistical evidence, both in New Zealand and abroad, it is argued that design policies are not always effective for healing a nation’s economic ills. In many cases, they are hygiene factors hyped as panacea for driving overall competitive advantage of a nation.