UK consulting firms are leveraging international demand to drive growth amid local challenges.
Topics covered
The landscape for consulting firms in the UK is evolving rapidly as they face a myriad of economic challenges while simultaneously seizing international opportunities. With the consulting market experiencing stagnation domestically, firms are increasingly looking abroad to sustain growth. This shift is driven by a significant rise in demand for British consulting services, particularly in emerging sectors.
Export growth in consulting services
According to recent data from the Office for National Statistics, the UK’s consulting services exports have seen remarkable growth, with a staggering 114 percent increase reported in the last year alone. This surge contrasts sharply with the overall stagnation of the domestic consulting market, which has not seen growth since 2020.
The ability of UK consultancies to maintain a competitive edge internationally speaks volumes about their reputation for excellence and expertise.
Fiona Czerniawska, CEO of Source Global Research, emphasizes the global respect for UK consultancies, particularly for their traditional management skills. This respect has enabled firms to establish connections and expand their operations internationally, positioning them well to capitalize on opportunities in foreign markets.
Challenges and opportunities in the global market
Despite the positive outlook for exports, UK consulting firms must navigate several global challenges, including economic volatility and the repercussions of Brexit. The trade war initiated by the US and ongoing economic uncertainties pose risks to international operations. However, these challenges also present opportunities. For instance, the US’s growing interest in technology and innovation could lead to increased demand for consulting services as companies seek to fill skill gaps.
As Tamzen Isacsson, CEO of the Management Consultancies Association (MCA), points out, the pandemic has accelerated the internationalization of consulting services, with firms adapting to online operations. This shift has not only allowed firms to maintain their client base but also to expand their reach globally, doubling exports during the pandemic.
Regional growth and the future of consulting
Interestingly, the growth of consulting services is not confined to London. Recent data indicates that regions such as Scotland and the east of England are experiencing faster growth in professional services exports compared to the capital. This trend highlights the potential for a more balanced distribution of consulting services across the UK, which could help address regional disparities in economic growth.
Looking ahead, UK consulting firms remain optimistic about their prospects. With a forecasted growth rate of 6.4 percent for this year and 9 percent for the next, the sector is poised for a rebound. James Hadley, UK managing partner at Bain & Company, notes that there is a strong demand for consulting services as businesses seek assistance in navigating critical disruptions, including advancements in artificial intelligence and the energy transition.
In conclusion, while UK consulting firms face a challenging domestic environment, their ability to adapt and leverage international opportunities positions them for future growth. As they continue to build on their global reputation, the consulting sector is likely to play a crucial role in the UK’s economic recovery and growth strategy.
