I found this on Wikipedia under 'Interaction Design'. I think it gives a good insight into how my Industrial Design thinking should be geared to develop a well defined Interactive Design.
"As technologies are often overly complex for their intended target audience, interaction design aims to minimize the learning curve and to increase accuracy and efficiency of a task without diminishing usefulness. The objective is to reduce frustration and increase user productivity and satisfaction.
Interaction design attempts to improve the usability and experience of the product, by first researching and understanding certain users' needs and then designing to meet and exceed them. (Figuring out who needs to use it, and how those people would like to use it.)
Only by involving users who will use a product or system on a regular basis will designers be able to properly tailor and maximize usability. Involving real users, designers gain the ability to better understand user goals and experiences. There are also positive side effects, which include enhanced system capability awareness and user ownership. It is important that the user be aware of system capabilities from an early stage so that expectations regarding functionality are both realistic and properly understood. Also, users who have been active participants in a product's development are more likely to feel a sense of ownership, thus increasing overall satisfaction." From Wikipedia: http://en.wikipedia.org/wiki/Interaction_design
Image from: http://justinmjacobssite.com/
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