Forecasts & Data
Greener Pastures Follow Economic Showers
After a steady climb throughout the 1990s, consulting growth peaked between 1994 and 1998, prior to the economic slowdown, according to Kennedy Information Research Group's Global Consulting Marketplace: Key Data, Forecasts and Trends Report. The highly cyclical profession is expected to expand again, with a 12.2 percent growth projected for 2002–2006.
IT and HR Become Hot
IT and human resources consulting will outperform the market, while strategy and operations will underperform the market globally. Moving forward, IT will be strong because it is nondiscretionary spending, while strategy spending has been relegated to the client's wish list. HR has been surprisingly strong because of the benefits administration and e-HR initiatives that have been helping clients reduce cost and HR administration time.
Rev Per Pro Expected to Grow in Europe
North America and Europe represent somewhat mature markets, and tend to show similar revenue-per-consultant figures, in the $140,000 to $160,000 range. These regions are quite receptive to the use of consultants, and because of the already high level of consulting activity here, KIRG expects continued but moderate growth through 2005.
Consultants in the other world regions are relatively "less productive," indicating a higher level of effort (and presumably infrastructure) required to generate the same amount of consulting revenue. Asia/Pacific is characterized by a low penetration ratio but a relatively high productivity measure. This reflects a region (specific countries vary) that is growing more receptive to the use of consulting.
Latin America presents both a low penetration ratio and a low productivity measure. Consulting opportunities in this region will come slowly and require continued investment with only moderate payoff.
The President of Estonia is Calling
Government consulting is expected to overtake financial services as the largest industry vertical globally. Governments in Western Europe are dealing with issues of privatization, trade issues, and to a smaller degree Euro conversion, while those in the other parts of the world are expected to hire consultants to help with deregulation, privatization, and infrastructure development issues.
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