Consultancy market of Norway around quarter of Nordic consulting industry

The consulting industry of Norway grew by 3% last year, picking up on the growth rate of the previous years, in line with an accelerating Nordic consulting market overall. Consultants in Norway saw their fee income boosted by almost €20 million in 2017, and looking ahead are increasingly seeking to diversify away from their high reliance on oil & gas work.

The Nordic consulting industry as a whole grew strongly in 2017, reaching a market value of €2.77 billion on the back of a healthy 5.7% growth rate. The consulting market growth rate of every Nordic country has accelerated compared to two years ago, with Sweden posting both the fastest growth rate and the highest revenues. The region’s largest market – seeing the strongest growth rate of 6.9% to €944 million – was almost matched by an upsurge in the region’s smallest, Finland, which grew by 6.8% in the same period.

However, not every consulting segment in the Nordics saw such a bullish year. Denmark’s growth rate was estimated as being around 4%, and Norway’s market saw the lowest rate of expansion of the three at just 3%. Between 2011 and 2012, Norwegian consulting actually saw a strong rise in comparison to the major consulting markets of Western Europe, which underwent a slump in the same period as the global economy lapsed back into a brief recession. At the time, Norway’s market seemed somewhat insulated from this, thanks largely to the nation’s famous oil reserves.

Now, however, in line with the majority of Gulf region economies also hit by their dependency on black gold, low oil prices slowed growth in Norway’s economy – turning what was a useful buffer from economic crisis into a problematic lack of dynamism. Despite this, or perhaps because of it, consulting still outperformed the economy as a whole. GDP growth for Norway stood at 1.9% for 2017, while the consulting sector’s 3% saw it hit revenues of €626 million, compared to €608 million in 2016, according to data sourced from analyst firm Source Global Research.

As is with the case in the aforementioned cases of the Middle Eastern economies stricken by the fall in oil prices, the resilience of Norway’s consulting sector is likely down to the move of energy firms, and the nation as a whole, to diversify as a measure to protect itself from further pricing fluctuations. This can be seen most recently with oil and gas giant Statoil’s hire of Capgemini to help the energy firm digitalise, minimising costs and therefore maximising the profits from the value of oil in the event of another price crunch. The city of Oslo meanwhile hired Danish consultancy COWI to develop a model to determine the implications of autonomous mobility in the country’s capital – something which will ultimately move transport away from the fossil fuel dependent combustion engines of the past. 

The limited growth could also partially be explained by the increasing talent crunch being felt across the developed world. With an ageing population now no longer a matter for the future, with falling birthrates and a growing number of skilled employees reaching retirement age meaning the workforce is no longer able to easily replace itself, the demand for skills is higher than the availability of the right people. As is the case with the consulting industry across the Western world, Norwegian consulting firms face the challenge of recruiting top talent among an increasingly competitive market. Many of the professionals they are eyeing with key skills are for instance recruited to the expanding digitisation and IT departments in the public sector.

Commenting on the performance of Norway’s consulting sector last year, Hans Christian Westlye, from Enterprise Federation of Norway Virke, and Director of Virke Consulting and Technology, said, “The fact that Norway’s consulting market has continued to grow at all since the onset of lower oil prices has to be seen as an achievement in itself . . . Despite that, overall, consultants remain upbeat about the state of the market, and with work around digital transformation picking up across the Nordics and in every sector of the economy, things look well positioned for 2018. It’s also important that we are seeing both large and small firms benefitting from the digital transformation story.”