The knowledge economy and management consultancy

The economic shifts of the past thirty years have been considerable. What Drucker (1969), Bell (1973), Gouldner (1979), Stanback (1979) and Stanback et al. (1981) realized around the 1970s, namely the rise of the knowledge economy and the trend toward service work, has grown even more since the 1980s and 1990s. In the industrialized countries, the growth rates of exports and FDI have dwarfed that of GDP (see chapter 2). In conjunction with the development of information technology and the decreasing costs of communication and transport, this means that the conditions of production have changed drastically between the 1970s and today. Moreover, the growth of intra-industry trade indicates that, in comparison to the 1970s, today the production of a good is preceded by a much higher magnitude of trade. Parts and half-finished products are manufactured at many more locations than thirty years ago. This change of production conditions has been paralleled by the increased mobility of finance, the liberalization of markets, and the privatization of formerly public institutions. These developments have forced industry, trade, and financial institutions to review their strategy, organization, and IT in increasingly shorter cycles. Those services that economize on scale and scope regarding aperiodical or one-off changes for client firms have capitalized on these changes and benefitted accordingly (chapter 2).