As a product designer, I find that many inventors and start-up companies with a product or an idea will automatically find an engineer to do their bidding. I can see the difference immediately and too often the products that come about as a result end up on late night television as the "Widget 2000" or something along those lines.
Products which are engineered will sell. Products which are designed sell well.
It is my job, when designing a product for a client, to consider everything that goes into a product. I take into account not only the end user, but, also the manufacturer, the cashier, the shipper, the magazine ad, the packaging, the landfill count, the "idiot factor"... and so on. The engineer`s job is to make the thing work. And, at times, with no regard for the rest of the world.
The fundamental reason for this difference is the ways the engineer and the designer think. Engineers are math based, and, as a result, are looking for an absolute answer. Designers are art based; they look for the bigger picture. There is no absolute in the art world, save that of materials being changed by human intent (even that is being questioned...).
What does all this mean?
I contend that this difference (in relation to products being developed) is that designed products reach the consumer on an emotional level-- far more effective than those of the engineered products. Which, despite the best efforts of the engineer and inventive team, manage to work, but are limited in their appeal. Very rarely will people buy something because it is highly engineered. Other than Automobile engines and accounting software, most people consider how the thing looks more than how well it works. Sad: yes, but true.
This is not to say engineers do not have their place or to say that designers are the only hands you need on the job... But as I surf this site, and others like it, I find that inventors and entrepreneurs will reference an industrial manufacturing index before going to a design firm for their help. Is that what big manufacturing companies do? Companies like Rubbermaid, Motorola or DeWalt? Hmmm...
At least; this is what I have noticed in my line of work, but I am interested in what you think. Please respond.