The consulting industry is a wide-ranging industry that encompasses every other field that generates revenues. If someone has expertise that can be used by another in some way and they pay that person for their advice, then that is a contribution to this industry.
Consulting Industry Statistics
In 2013, the consulting industry contributed $415 billion to the global economy.
India is a major contributor to this industry. In 2013, their emphasis on outsourcing and consulting generated over $75 billion in total revenues. Projections of growth place India’s influence on the global economy in the sector at $225 billion by the year 2020. If that figure holds true, the world may see a major shift within this industry in the next 5 years.
3 Key Facts About This Industry Right Now
1. The consulting industry is responsible for over 2 million jobs when looked at as a whole in the United States.
2. Accounting services are responsible for about 50% of the total employment opportunities in the US within this industry.
3. The leading revenue generator for this industry in the United States, however, is in management, scientific, and technical consulting services.
Takeaway: The consulting industry generates massive margins for one simple fact: they are providing expertise to people or organizations that are specific to a need being met. By hiring a consultant, there are reduced overall long-term costs because there isn’t any training or development investment that needs to be made. This means that more revenues can be sent to a consultant to provide a better result for an overall lesser cost than if that expertise is developed in-house.
Other Essential Facts About The Consulting Industry
1. Annualized growth within the management sector of this industry has been at 3.6% for the last 5 years.
2. Direct labor accounts for 45% of the revenues that are generated within this industry.
3. For every $1 spent on labor, organizations also spend $0.22 on a capital expenditure.
4. Accounting consultation revenues grew by over 10% for the last reported period, from 2011 to 2012.
5. US accounting revenues represent nearly 25% of the global revenues within this industry.
6. Combined the United States accounts for nearly 75% of the total consulting industry revenues.
7. The largest sub-field of consulting is in strategic management, accounting for over $30 billion in total revenues.
8. There are more than 600,000 management consultants in the United States.
Takeaway: This industry is growing at a massive pace because organizations are realizing the value of bringing someone on-board that already has the expertise that is needed. In return, a consultant can hold down multiple clients to be able to maximize their own revenues as well. This mutually beneficial relationship encourages further business development, reduces overall costs, and increases profits across the board. This will likely lead to continued growth within this industry, greater global business influence, and ultimately more competition within the marketplace.