In the video "Empathy: The First Phase in the Design Thinking Process," the importance of empathy as the foundational step in design thinking is discussed. Empathy involves deeply understanding users' needs, experiences, and emotions to inform human-centered solutions. By engaging directly with users through interviews, observations, and immersing oneself in their environment, designers can uncover insights that lead to innovative and relevant designs. This empathetic approach ensures that the solutions developed resonate with users and effectively address their challenges.