The UAE, Qatar and Saudi Arabia are the “stars” of the US$92 billion global consultancy market and the GCC region is expected to outshine all other regions this year, a report being released today predicts.
The GCC market grew at a rate of 20 per cent in 2012 to $1.9bn and is expected to keep expanding at that rate this year, according the Source Information Services (SIS) Report. That would make it the fastest growing regional market for consultancies this year.
While growth will vary across the GCC, the report considers Qatar, the UAE, and especially Saudi Arabia as the “stars of the global consulting market right now”.
The countries’ growth rates for consultancy were 14 per cent, 12 per cent and 35 per cent respectively in 2012.
“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” said the SIS director Edward Haigh.
SIS is a London-based company that provides specialist information on the management consultancy market.
Its report compares consultancy markets worldwide on the basis of three factors to find the most attractive market – and consequently where it makes the most sense for companies to invest. SIS includes only what it considers “big consultancies” in its report – those with annual revenues of $500 million or employing more than 50 consultants globally.
The factors SIS measured were: talent (how easy it is for firms to attract and retain qualified staff); prospects for growth; and price.
While the UAE does very well in terms of the prices that consultancies can charge and the prospects for growth, the availability of local qualified staff is more challenging.
In the past, the GCC market was served by western consultants who would fly in, remain in the background and write reports. Now, as GCC companies mature and become more customer-focused, consultancies need more people attuned to the local culture to work on the ground.
“There is relatively little local talent consulting and the real challenge for the region is that that pipeline of local talent just doesn’t seem to be there,” Mr Haigh said. “And there doesn’t seem to be an immediately obvious solution.”
He suggested that firms would have to be more “proactive” in finding ways to develop talent.
Nicholas Bahr, principal and regional manager at the Middle East office of the consultancy Booz Allen Hamilton in Dubai, agrees with the overall findings of the report.
“Yes, absolutely we are going to invest in this region,” Mr Bahr said. “It’s one of the highest growth regions in the world.”
He attributed the double-digit growth in the UAE, Qatar and Saudi consultancy markets to large infrastructure investment coupled with the youth of the region’s regulatory agencies.
Across the GCC in 2012, consultancy work in the public sector grew by 37 per cent. Banking, oil and gas, business services and health care were other sectors that performed well, according to Mr Haigh.
The report notes that while Oman, Kuwait and Bahrain are becoming attractive markets, “we wouldn’t bet on it coming to fruition in 2014”.
The US market, which grew by 9 per cent in 2012 and is currently worth $39.3bn, is considered the most attractive mature market and the second most attractive market globally. While there may be economic concerns in the US, other factors driving growth are in place – “mature buyers, lots of headquarters, relative political stability and decent levels of inward investment”, the report said.
Even though the consultancy market in other regions is not expected to grow at the same pace as in the GCC, there are attractive countries within those regions. While the market in eastern Europe grew at 7 per cent in 2012 and is now worth $1.2bn, the market in Russia grew 17 per cent and is valued at $880 million. In Africa, where growth was 9 per cent in 2012 and the market is worth $1.4bn, oil-rich Nigeria offers “growth rates unrivalled anywhere else in the world”. The market’s growth there has recently averaged 40 to 50 per cent a year.
The market in China grew at 10 per cent in 2012 and is now worth $2.9bn; Brazil by 8 per cent and is now worth $1.4bn.
lgutcher@thenational.ae
