The Future of Consulting

 

The nature of consulting has steadily and fundamentally changed over the last decade due to major global issues creating new challenges facing consulting professionals of today. Furthermore, worsening economic conditions in developing countries such as Turkey add further complications by, e.g., the non-existence of value-added RTD (research and technology development), shrinking international loans and collapsing educational systems under heavy demographic pressures.
In the face of these hardships, a constructive approach would be to assess the current situation as the signs of a new phase of global CHANGE. Consulting businesses with accumulated know-how and innovative capabilities should increasingly be prepared to create their own project portfolios in the spirit of a business developer.
 
Public investment levels of volume and content are directly correlated with those of consulting businesses. On the one hand, this is due to the dominance of public funding in social and infrastuctural projects. On the other hand, any new development at pre-commercialisation phases is invariably realisable by virtue of public funds.
Unfortunately, public sector investment by successive governments is a clear case of failure in Turkey, not only in terms of value but also in terms of content.
A number of facts from the year 2002 would delineate the current state of affairs quite well:
 

• Investment was heavily inclined towards economic sectors compared to social sectors. The difference was more accented for foreign investment.
• Total public investment was under 6 billion USD in 2002. More than half of this was realised through general and annexed state budgets.
• Energy, highways and motorways, irrigation, pipelines and manufacturing made up three quarters of the total public investment budget in 2002.
• The sum of foreign loans was approximately 700 mUSD in 2002. Half of this figure was in energy.
• The sum of state allocations in social sectors was just over 1,600 mUSD in 2002. Half of this figure was in education, and a fifth in health.
• The sum of foreign loans was a mere 57 mUSD in 2002! Education, health and environmental infrastructure accounted for 90% of this figure.
• Foreign funding declared as necessary for public sector investment projects totalled 5,600 mUSD in 2002. Interestingly, three quarters of this figure was expected for road and rail transport!
• The shares in gross value added by industry, construction and services were almost equal (approximately 5%), whereas that of agriculture was rapidly decreasing.

 
It is clear from this performance, repeated year after year, that economic sectors selected for investment are distinctly deficient in reflecting an appreciation of current global trends in science and technology, information and communication, as well as a commitment to a recognisable strategy for selective industrial specialisation.
Partly, the reason behind this subnormality has been the pressures for privatisation and structural changes in the economy at the expense of the public sector.
However, the process of incapacitating the public sector has not been accompanied by a process of private sector strengthening. Most private concerns still continue their perennial habit of relying on public sector for their livelihood (legally or otherwise!)
The apparent result of the less than satisfactory privatisation on the economy has been to move further away from industry towards speculative fiscal platforms where public representatives still enjoy undue privileges. Another adverse effect of this state is that foreign investment in much-needed modernisation projects is lured in ever larger amounts into speculative short-term gains.
Consequently, it would not be wholly rational to expect local (private) industries and services to appear as new players in the global markets overnight. Thus, demand for products and services from those markets supplied by foreign traders will be increasing as much as the local economy is able to assimilate.
Moreover, one obvious shortcoming will continue to be consultants, especially in those fields where no local content is fed into marketed goods and services. With no counterparts in such industrial branches, consulting businesses face severe difficulties in accumulating much-needed expertise.
In a wider context, irrespective of public/private investment profiles, the nature of consulting has steadily and fundamentally changed over the last decade due to certain major global trends as follows:

 
• post-Soviet global rush of reorientation
• new economy induced by largely monopolistic IT
• increased frailty of the markets influenced by over-valued excessive dollarisation
• prominence of innovative RTD in economic success distancing the rich from the rest further
• failure of the classical educational systems to adapt to new conditions, etc.

 
For all such reasons and others, it is no longer possible to choose consulting as an occupation as practised in the recent past. Developing economies are oversaturated by so-called local consultants who are little more than intermediaries for their international big brothers.
Local business is literally littered with no-stock companies set up by retired government officials, provincial middlemen, low-grade engineers, failed contractors, deluded academicians, and so on.
As in any developing economy, the local construction sector in Turkey is also highly infected with such ‘consultants’. The situation is aggravated by several other factors:

 
• The concept of intellectual property rights (IPR) is considered an inconvenience to be avoided at any rate. Precious little direct private investment is practically immune to such ‘extravaganza’. Competing consultants race amongst themselves to replicate rather than to originate. Poor client appreciation is hardly sufficient to discourage and reverse this uninspirational habit.
• The State’s investment prospects are bleak, especially in traditional sectors due to the high volume of external debt servicing, adverse effects of globalisation on local economies, and pressures exerted by information technologies which claim an ever larger share in real-value creating businesses.
• International funding of local projects are on the wane due to currently observable shifts in global policies in a unipolar world business scene. As a corollary, corruption is also becoming a serious issue in international tender and bidding practices.  While struggling to cope with mostly unreasonable requirements of donor agencies, no local consulting enterprise can hope to be successful in resisting current economic pressures to keep its trained core staff while the work influx is decreasing; and there is no market for highly specialised independent rosters of consultants as in the West from which to fill the vacancies at short notice.
• Media and information technologies are changing the values associated with public purpose as well as the delicate tradeoffs between current consumption versus future benefits.
• Higher educational standards have reached an all time low. Today, fewer graduates are capable of making a positive contribution to consulting services without undergoing an extended period of orientation and training.

 
All such issues are indeed the main outcome of an unfortunate process of professional incapacitation of the last fifty odd years. It is a serious challenge for decision makers in practically all traditional sectors. However, even if the challenge is taken up and some issues resolved or, at least, eased, that would not be enough in meeting the new challenges facing consulting professionals of today.
In a wider context, one steady looser over the last decade in this respect has been the traditional engineering consulting business, esp. across the non-USA domain. In Europe, restructuring these traditional businesses as new conditions dictate has not been successful either. Most remain unattractive opportunities for market investors. Worsening economic conditions in developing countries such as Turkey add further complications by the non-existence of value-added RTD (research and technology development), shrinking international loans and collapsing educational system under heavy demographic pressure.
In spite of all such gloomy observations, it is probably not right to draft doomsday scenarios. A more likely and constructive approach would be to assess the current situation as the signs of a new phase of global CHANGE. This new phase would be translated into the world of consulting in terms of Change Management as a generic expression. What is meant here is not restricted to a desire to be instrumental as a consultant in the global process of change, but also, to be capable of changing itself too.
Probably the most important change in consulting practices should be to steer away from project-hunting in the market, progressively towards project-creating. In other words, consulting businesses with accumulated know-how and innovative capabilities should increasingly be prepared to create their own project portfolios in the spirit of a business developer.
Understandably, this approach may not be attractive for an international consultant. This is because of a highly depreciated quality bracket of such consultants who can still unjustifiably claim high standards thanks to the support of their governments’ international aid agencies. Such lucrative options are not available to consultants elsewhere, especially to those working in developing economies.
In the most general sense, any new consulting initiative for change will invariably be inspired by information technologies in a knowledge-based society.
Indeed, IT has literally transformed all classical means of human contact and business transactions as well as content in a single decade. And, due to its dynamic (ever-changing) characteristics, IT has been instrumental in bringing information into all facets of human endeavour.
The visionary aim here is ambient intelligence with the user at the centre of a knowledge-based society. These systems are meant to offer access to an information base incorporating interactive and intelligent systems for health, mobility, security, education, business and leisure, etc. with the aid of new methods of work and novel technologies for learning, integrated business management and e-government.
In conclusion, it would not be inopportune to claim that globalisation has been, is, and will be heavily relying on advances in IT. In such an environment, failing to appreciate the current process of change will undoubtedly lead to certain fall out of kilter, first and foremost, in the realm of consulting.