The present study sheds new light on the knowledge dimensions and processes that occur when designing new concepts and prototypes in higher education. In particular, this study aims to develop the conceptual understanding of activities and processes that help students to gain new knowledge and understanding while designing new products and services. I employed two data collection phases among undergraduate students with qualitative abductive data analyses in order to create a conceptual framework for understanding how new knowledge is created and managed in students' social interactions. This framework also enables us to distinguish the user, business, technological and methodological knowledge dimensions that constitute the elemental perspectives for design processes. This study emphasises the need for students to use diverse methods to gain new knowledge for inventing and designing new technological solutions.