The Italian consulting market – a glass half full?

I was recently on a plane with a big group of Italian tourists. We all duly read our magazines, ate our peanuts and landed safely – to a huge round of applause and whooping for joy from the Italian tour party. It is perhaps this delight in simply staying alive which explains the sanguine nature of the Italian response to yet another year of a consulting market which is not growing at all. Together with widespread satisfaction that the market is ‘stable’, there is a conviction that good times are just around the corner – the same message that we have been hearing from Italian consultants for some time now.

Perhaps this degree of optimism is the only way to cope with a market which currently has little to recommend it. GDP shrank by 0.4% in 2014. Since the creation of the euro, Italy’s economy has grown less than that of Greece. (Yes, we know – Greece). A flat consulting market in 2014 followed a flat 2013. Prices have fallen so low that it is becoming almost impossible to compete on price and make any kind of profit. An economy which continues to be dominated by lots of small companies means, in practice, few buyers of consulting services of any kind.

And yet many firms are hanging on in there – either because they have waited so long for things to pick up that it would show a lack of commitment to give up now, or because they genuinely believe that things are on the up. It is true that there are some signs that the economy is improving, albeit slowly, which will inevitably lead to a pick-up in client confidence. Digital work has not made much of a difference to the consulting market yet, but there are signs that the message of digital’s potential is starting to get through. And perhaps most importantly, many firms have taken a long, hard look at their models and solutions and realised that things need to change; sharper differentiation and lower cost delivery options are both going to be increasingly important going forward.

We don't really think that 2015 will prove to be very different from 2014, so firms may well only know if their optimism has paid off in 2016 and beyond. It is however, a lesson in seeing the best in everything, and maybe the world would be a happier place if we all thought like Italian consultants.