We estimate that the market for AI advice and implementation services in 2022 was worth around $18bn (that’s excluding software and related sales – see figure 1). This is a number we reached by literally counting people in all major and many mid-sized consulting and professional services firms, applying ‘revenue per professional’ metrics to the results, and, where we can, calibrating our numbers with publicly available data.

But that’s not the important thing here: What matters is how fast and furiously the market is likely to grow. Since ChatGPT burst into widespread consciousness, almost every call we have with consulting firms—and not a small number of calls with clients—has touched on that question. There’s no guarantee, however, that this interest will turn into consulting spend: Having spent the last 10 years hearing firms and technology suppliers extol the virtues of blockchain, we’re yet to see clients spending heavily in this area, at least outside some very specific fields.

If we want to understand how generative and other forms of AI may develop as consulting markets, we have to look at what’s driven blockbuster growth in the past. And, our research shows, that comes down to four factors.

Resonance

Issues that start and stop in boardroom discussions rarely make it to blockbuster status. There just isn’t enough momentum behind them and most are issues for just one part of the business so tend to lose out in the fight for budgets and resources.

By contrast, cybersecurity is an issue for every part of every organisation, and indeed every individual. We’re aware of the threat because someone may steal our bank details or our identity, and we rely on organisations protecting us. That awareness flows right up organisations to the very top and drives spending: No senior executive team wants to be found to have cut corners where cybersecurity is concerned.

Novelty

The biggest opportunities for consulting firms arise when clients are facing unprecedented issues that they don’t know how to respond to. Research we’ve recently carried out across the US, Europe, and Asia showed that consulting demand at the moment is being driven by two standout factors: clients are overloaded with urgent work, while simultaneously dealing with issues they’ve no experience of (see figure 2.) No wonder that depth of expertise is one of the attributes clients are most likely to consider when deciding which firm to hire.

Impact

Forty-one percent of clients in the same survey said that macroeconomic uncertainty has made them more demanding when it comes to consulting firms delivering concrete results. Blockbuster consulting services have a tangible impact, so clients feel more confident about investing in them.

Scale

Blockbuster consulting markets don’t happen by themselves, but depend on consulting firms investing in research and thought leadership to provide the “yeast” that leavens demand. If projects are small and demand is fragmented, then firms may choose to invest in bigger, more homogeneous opportunities. This is what stopped the growth of environmental consulting in 2007-08, that and the global financial crisis—and it may put the brakes on sustainability work now, too.

How does AI score against these criteria?

There’s no argument on the first two points, resonance and novelty. AI is being talked about in the media, in schools, homes, on the way to work as well as at work. Purists might argue that it’s not really new, but almost anyone interacting with ChatGPT would struggle to deny that it offers a novel user experience, and the accessibility and useability of the platform means that almost anyone with an internet connection can experiment.

As for impact, it’s clearly making a splash (try telling the internal comms manager, who’s just used ChatGPT to improve their newsletter, or the student who’s used it to precis research, that it's not going to have an impact!) But the immediacy of that impact may be what will make it less important as a consulting market.

If clients think they can get huge benefits from using it individually or in small-scale ways at work, as opposed to making it central to their business strategy, then the probability it will spawn blockbuster-level demand recedes somewhat. To ensure generative AI creates substantial consulting opportunities, then, firms are going to have to find serious use cases for it very quickly indeed.