Globalization And Economic Growth Will Drive The Management Consulting Market
The global management consulting market is expected to grow from nearly $1,080 billion in 2019 to around $1,460 billion in 2022 at a compound annual growth rate (CAGR) of 10.6%. Many clients of the management consulting market are expanding globally, so their need for sophisticated and internationally-oriented services is high. Globalization is expected to pave the way for more joint ventures, foreign investments, global expansion, collaborated research and development, and multi-national companies setting up facilities in high growth regions and offshore centers across the world. For instance, in 2016, Boston Consulting Group (BCG) acquired Inverto, a German based supply chain and procurement consulting company, to diversify its range of services for clients in the procurement and operations segment. The acquisition added 130 management consultants and aimed to tap the fast-growing market for digitalization in procurement by using automation and data exchange, also known as Industrial 4.0, in the wider operations chain of the BCG organization.
Companies are already increasingly forming joint ventures with firms in other countries to test the market. Similarly, some companies are looking to acquire established companies in new markets to minimize the risk of market entry. Globalization in the management consulting industry is also gaining momentum due to rapid growth of the internet, automation of consultancy processes and developments in data security. In response to this, many domestic management consultancies are expected to enter into new markets collaborating with foreign groups to offer services in a wider range of countries, therefore driving the management consulting market in the forecast period.
Stable economic growth is also forecast to support the global management consulting market growth in many developed and developing countries during 2018-2022. The International Monetary Fund (IMF) predicts that global real gross domestic product (GDP) growth will be 3.7% over 2019 and 2020, and 3.6% from 2021 to 2023. Recovering commodity prices, after a significant decline in the historic period, is further expected to support market growth. Developed economies are also expected to register stable growth during the forecast period. Emerging markets are expected to continue to grow slightly faster than the developed markets in the forecast period. For instance, India’s GDP is expected to grow at 7.3%, whereas China is forecast to register GDP growth of 6.2% in 2019. Stable economic growth will increase investments in end user markets, and emerging economies will witness changes in business models, reductions in bureaucracy and corruption, and promotion of private sector partnerships. This will improve the potential of the management consulting market during the forecast period.