Global Consulting Market


Global Consulting Market

Over the past years the global consulting market has booked year on year growth, although growth rates differ between the more mature markets and emerging economies. The industry has not only grown in size, stature and international reach, it has also navigated its way through several cycles of professionalisation, today making it one of the more developed segments within the professional services industry.

An analysis of the past five decades shows that the development of the consultancy industry is closely tied to the developments of the global economy. In times of flourishing economic conditions, organisations enjoy higher revenues and budgets, a setting which paves the way for higher spending on consultants. Vice versa, economic downturns typically sees organisations shrink their spending behaviour, which leads to budget cuts of, among, others, consulting expenditures.

Despite the relatively mature state of the market, the large variety of services (industries, functional areas, market/region focus) that span the consulting industry imply that there is no clear-cut consensus on how the market should be defined. Representative bodies (e.g. the MCA in the UK) and analyst firms (e.g. ALM Intelligence, Gartner, etc) all use different market definitions, and as a result the estimates for the size of the consulting market differ substantially, ranging from just over $100 billion up to $280 billion.

ALM Intelligence, a US-based analyst firm that has been tracking the consulting market since the '70s, for instance finds that the global management consulting market is worth around $240 billion, while FEACO – the European Federation of Management Consultancies Associations (founded in 1960) – estimates the market value at nearly $280 billion. Source Global Research, a UK-based analyst firm, provides the most conservative estimate, at $120 billion, in part due to the fact that the firm focuses on the top segment of management consultancy. Gartner believes that total consulting fee income hovers around $131 billion.

The 'gap' between the estimates follows from, among others, different scoping of markets, varying definitions applied for consulting services, differences in regions/markets considered and the nature of calculation models used.

In 2011 the consulting industry was valued at $205 billion, and since the market has grown with an average Compound Annual Growth Rate (CAGR) of 4.1% to a value of $251 billion in 2016*. The largest segment is Operations Consulting, which accounts for nearly 30% of the market, followed shortly by the Financial Advisory segment. Strategy Consulting – the most prestigious segment in the industry – represents less than 15% of the market, and is, in terms of size, comparable to the HR Consulting domain. Technology Consulting, also referred to as IT Consulting, holds a 20% share of the overall market.

Across the board, the North American consulting market is regarded as the most mature region globally, however, the EMEA region – Europe, the Middle East and Africa – lead in terms of market size, holding a 41% share of the overall consultancy economy. The US is by a distance the largest national consulting market, with Canada taking just a 7% share of the North American market. Asia and Oceania, with Australia as the most important consulting hub, accounts for around 16% of the industry.