The UAE’s Small and Medium Consulting Firms: From Disrupted to Disruptors
featured brief
The UAE’s Small and Medium Consulting Firms: From Disrupted to Disruptors
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June 10, 2021
The UAE consulting industry is driven to a significant degree by demand from the public sector, as it strives to diversify its oil-dependent economy. As a part of these diversification efforts, the UAE has opened up its doors to businesses and investment from the rest of the world, incentivizing them with free trade zones, 100% capital repatriation, and limited corporate taxation. Furthermore, the country’s strategic location and favourable trading conditions provides easy access to other Gulf countries and a gateway to Africa, Europe, and Asia—making it an attractive regional base for multinational companies.
As a result of its location and strong business environment, in recent decades, nearly ~25% of Fortune 500 companies have established a local presence in the UAE. These multinational corporations constitute another major source of demand for consulting firms in the country. The Middle Eastern consulting industry - valued at $3.6 billion - experiences fierce competition from large and small consulting firms alike, in their bid to cater to high-impact challenges and transformations in the private and public sectors.
Gulf-based multinational companies and the public sector have a preference for working with large consulting firms. Consequently, firms, such as McKinsey, Boston Consulting Group, Bain & Company, Oliver Wyman among others enjoy disproportionate visibility and credibility in the UAE. There is limited data on the performance of Small- and Medium-Sized Consulting Firms (SMCFs). The lack of information on SMCFs appears to be curtailing the growth of the industry in some respects, as SMCFs do not have visibility into the identity and operations of their peers, or business development opportunities.
As a result of these information gaps and asymmetrics, SMCFs typically operate in silos, including in situations where they would benefit from greater cooperation and collaboration. This fragmentation makes it difficult for these smaller consultancies to keep up with shifts in the industry, especially those that have been accelerated by technology. All of these trends have been further compounded by the COVID-19 pandemic.
Despite these challenges, Botho believes that there is far more room for SMCFs than existing data and anecdotal evidence would suggest. Operating under this assumption, Botho undertook the research presented in this report to map out the challenges and opportunities for SMCFs in the UAE.