Where should you place your bets in 2014?

By Edward Haigh

For consulting firms, the question of where in the world to invest in their own businesses must have felt like a game of snakes and ladders in recent years. Come to think of it, there must have been times when it felt like a game of snakes and snakes.

The snakeiness of many European markets won't have surprised anyone, and although many firms have taken the opportunity to recruit in the dip, few will have been expecting a decent return on their investment in the short term. Those hopes have tended to rest on the more laddery emerging markets. But with the economies of China and India respectively slowing and (near as dammit) stopping, the game has got a whole lot more tricky. Especially with the Brazilian economy continuing to perform what Brazilians so charmingly call "chicken flights" in the background.

So where would we recommend you direct your investment in 2014? It's a question which, naturally, prompted the development of a methodology, and was answered in Part 5 of our Strategic Planning Programme for 2013. To cut a long story short, we were interested in three things: (1) the potential for growth in the market, (2) how easy it is to recruit and retain the talent you need, and (3) the sort of prices you can command. We should, of course, be talking about margin, rather than simply price, but that's a lot more complicated and will have to come later. Price is still a useful guide.

And the answer? The GCC (The Gulf Co-operation Council countries, made up of Saudi Arabia, U.A.E, Qatar, Oman, Bahrain and Kuwait). We ranked 14 geographical markets in total and the GCC topped the lot of them. Let's be clear: the GCC is no longer the land of milk and honey that it once was. Clients are smarter and more demanding than they used to be, and the region's local talent shortage is of such a severity that it threatens to asphixiate the long term dreams of consulting firms and their clients alike. But if that's tomorrow's crisis then it's merely today's pressing challenge, and growth for now is unrelenting. Most of it is coming from Saudi Arabia, where huge government investment has created a consulting market that's been growing at a rate north of 30% recently. But the U.A.E and Qatar are performing well, too; growing at about 12% and 14% respectively between 2011 ans 2012 and showing no obvious signs of slowing up.

The GCC also stands in fairly stark contrast with most of the other emerging markets we covered at the moment in terms attractivness. For all the hype, we remain wary about Africa in the short term, and neither India nor China have been delivering sufficient levels of growth recently fully to offset the difficulties of consulting in those countries. In fact we put a number of major western consulting markets ahead of them.

So the GCC gets our nod. It's not exactly a game of ladders and ladders out there, but it's a pretty safe bet nevertheless.