Posted , in Differentiation
Globalisation + China = Good news for the consulting industry
I recently attended a lecture at the London School of Economics on the subject of globalisation: “The crisis of the liberal order”, to be precise. The main gist of the talk was to put the uncertainty and worrying trends of the current political climate into perspective. We were invited to ask ourselves, were things really that bad in the context of the last 120 years? Citing casualty figures of numerous 20th-century catastrophes, including both World Wars, the Spanish Influenza, and the Soviet famines, to name but a grisly few, the professor emeritus was pretty much telling us to count our blessings. Women have the vote. White people no longer rule every corner of the world. We live, in general, in a far better-off and more tolerant world than ever before. Added to which, we have learned lessons from recent history that should ensure none of this good work can be undone: For example, thanks principally to Ben Bernanke, a scholar of the 1929 Wall Street Crash and the disastrous government policies that followed in its aftermath, proactive steps were taken after the 2008 banking crisis to avert another Great Depression (and they worked). As for nuclear warfare, the professor argued that world economies are now far too interconnected for any one country to have anything to gain by blowing anyone else up—in fact they have everything to lose by doing so—and that’s thanks to globalisation.*
Another huge nod in favour of globalisation, we were reminded, is the positive impact it has had on Asia, and on China in particular, which has, since embracing the global economic market in 1990, lifted 800 million of its citizens out of poverty. Eight. Hundred. Million. This incredible accomplishment also set in motion the explosive growth of China’s emerging middle class, who are now transforming consumer demand and behaviour in the country to unprecedented levels. And this is having a huge impact on the shape of China’s consulting industry (this particular angle wasn’t covered during the presentation, surprisingly).
Indeed, one thing you can’t miss when assessing opportunities for consultants in China—as we have done for our new report on consulting market trends in China—is how the growing middle class are acting as the key driving force behind many of consulting’s growth areas, notably—but not exclusively—within healthcare and education.
As an ever-growing number of Chinese citizens find themselves with the means to bypass the country’s overburdened public healthcare system, for example, demand for private medical care facilities is growing. And now that the Chinese government is relaxing restrictions on healthcare provider funding and ownership, consultants have seen a rise in demand from clients looking at how best to attract new investors. This, combined with a big transformation push across the healthcare sector in general, has contributed to growth levels of over 20% in this area during 2017, and a similar story is forecast for 2018 and beyond.
Elsewhere, China’s growing middle class are also opening up opportunities for consultants in education, as providers seek support in building the right educational infrastructure and business models to help maximise their reach to, and profitability from, this potentially lucrative audience. Forecasts from our data model for the education industry (sneaky peak below) predict solid, double-digit performance here too:
So while globalisation isn’t a cure-all, and the story within China itself is not so straightforward, or universally positive (that’s for another lecture), what’s clear is that these policies have had direct ramifications in terms of the sheer number and type of opportunities now available to consultants, who are playing their part in helping China meet the demands of its prosperous and growing middle class—a demographic that expects nothing less than its counterparts around the world.
*All of this came with a disclaimer at the end that he could be completely wrong. Sleep tight!