The Gulf region's lucrative consulting market is set to rebound after it shrank for the first time in 2020 as Covid-19 forced companies to cut spending.
The market will grow by 17 per cent this year, led by Saudi Arabia, according to London's Source Global Research.
The Saudi consulting market was valued at $1.44 billion after contracting by 11 per cent in 2020. It is expected to grow by 19 per cent this year.
The $580m UAE market is set to expand by 15 per cent while other Gulf markets are expected to make similar gains.
More than six in 10 organisations in the region plan to increase their use of consultants in the next 18 months, with the energy, resources, technology, media, telecoms and manufacturing sectors showing strong interest.
As for their reasons, four in 10 said they face issues they lack the experience to handle while 39 per cent are under pressure to do their work more quickly and 38 per cent are short-staffed due to pandemic-related reasons.
Only 13 per cent said their need to use more consultants is due to digitisation.
However, when asked what areas they plan to invest in, three quarters of respondents cited new technology.
About 44 per cent of clients expect consultants to cut their fees while 13 per cent look forward to steep fee reductions, the report showed.
This is a stark change to attitudes before the pandemic, when 84 per cent of GCC clients said they expected consulting rates to rise.
When asked why they expect rates to fall, 55 per cent said they believe many companies are qualified to perform the work that needs to be done.
“Given the ongoing pandemic and its deleterious effect on the consulting market last year, one might well expect consulting fees to suffer over the next 18 months,” said Edward Haigh, joint managing director at Source Global Research.
A significant minority (38 per cent) of clients predict that fee rates will go up after the pandemic. Of those, more than a third said the need for expertise will drive demand.
The projected rebound comes after the market contracted by 12.4 per cent last year, wiping out about $400m in revenue, the report said. As a result, the market is now worth around $2.7bn.
“The GCC’s consulting market arguably relies on two things more than anything else – freedom of movement for consultants and reliably high oil prices,” said Mr Haigh.
“So, in a year when consultants were confined not only to their country of residence but even to their homes, and when oil prices were not so much volatile as downright absurd, you can imagine what that did to the nerves of the average consultant in the region.”
Health care and technology were the exceptions, growing by 19 per cent and 5.2 per cent, respectively, the report showed.
Much of the growth in healthcare consultancy services was centred on efforts to respond to the pandemic, although ongoing work to define the structure of the Saudi healthcare system had "an impressive momentum of its own", the report said.
The technology segment of the market grew last year as the need to quickly transition to remote working drove demand.
Cybersecurity services performed particularly well as companies sought to secure remote work, driving growth of 11.4 per cent last year.
Source Global Research expects the cybersecurity consulting market to grow by a further 30 per cent this year, taking total revenue to $236m.
While many consulting companies experienced a strong start last year as clients pressed forward with various transformation initiatives, the crisis hit the sector hard.
The pandemic forced nervous clients to put projects on hold, particularly in hard-hit industries such as retail, hospitality and aviation, the report said.
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In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
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Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
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Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
