London: Despite a shortage of local talent, the GCC consulting market, which grew by 20 per cent to $1.9bn last year, is expected to be the fastest growing consulting market in the world in 2014. The colossal US market (worth $39bn in 2012) is expected to be the fastest growing western consulting market.
These findings are published in a report from specialist consulting industry research group Source Information Services today. Source says that there are differences from one country to the next within the GCC, but in Qatar, the UAE, and especially Saudi Arabia, the region has some of the stars of the global consulting market right now. The report says that if consulting firms are going to invest anywhere, this is probably where they should put their money.
The Source report ranks each market for overall attractiveness against three factors — its growth potential in 2014, how easy it is to attract and retain talent, and the prices that consulting firms can command.
Specifically on growth potential in 2014, the following markets are ranked as having the greatest growth potential:
- 1. GCC — presently a $1.9bn market (up 20 per cent in 2012)
- 2. Eastern Europe ($1.2bn — up 7 per cent in 2012) and Russia ($0.88bn — up 17 per cent in 2012)
- 3. China — presently a $2.9bn market (up 10 per cent in 2012)
- 4. US — presently a $39.3bn market (up 9 per cent in 2012)
- 5. Brazil — presently a $1.4bn market (up 8 per cent in 2012)
- 6. Africa — presently a $1.4bn market (up 9 per cent in 2012)
Edward Haigh, a director of Source and an author of the report commented, "The GCC is a market in which clients everywhere are trying to do a lot, very quickly, with very few people, and those are conditions in which consulting markets thrive. A consulting firm's ability to implement matters more than anything else in the GCC right now, but the ability to fit in with clients culturally when doing so — by having local talent — is both a critical determinant of success and the one, giant stumbling block which stands in the way of even greater growth in the region."
US Market — the shining light of mature markets
The report says that the US market may have its economic concerns, but so many of the other fundamentals that drive growth in consulting are in place: mature buyers, lots of headquarters, relative political stability and decent levels of inward investment.
UK recovery could boost consulting work
With the UK 's economic recovery finally taking hold, the report says that even the embattled public sector has been increasing its use of consultants recently. During the recession, the UK market has continued to grow because it has a rich supply of talent and consulting firms manage to command prices for their services that are the envy of just about everywhere else (with the exception of Germany). If growth could rise above low single digits the UK's market outlook for 2014 (presently ranked 4th globally for overall attractiveness) would be a notch or two higher.
Africa — huge potential but a tricky market
In Africa there are pockets of extraordinary growth. For instance, the West African energy and resources consulting market is probably growing faster than any other in the world at the moment — but the Source report says that overall growth is underwhelming. Consulting firms are also really going to struggle to find the local talent to serve clients, and to convince clients they need consulting in the first place.
Other emerging markets
The report says that Eastern Europe and Russia do well on the back of very strong growth, but remain tough in most other respects. China also has huge potential and it's hard to think of a market with greater potential right now, but until consulting firms find a way to win more business from large domestic Chinese clients, it will remain as potential. However, growth is good in the China market so it looks a better bet in 2014 than many more mature markets.
France — struggles in 12th place
France's consulting market, which sits in joint twelfth place alongside India for market attractiveness in 2014 is in reverse, and it's not especially good from a talent perspective, and economic pressures, coupled with an environment which feels increasingly hostile towards consultants, make commanding the sort of prices you might attract in Germany or the UK very difficult.