Innovation Consultancies

Part
01
of five
Part
01

Innovation Consultancy Market Size

While there is no publicly available information to fully answer the question, we've used available data to pull together key findings on current US innovation consultancy. Below is an outline of our research strategies to better understand why the information requested is publicly unavailable.

  • Some of the top providers of innovation consultancy services, include Accenture, Boston Consulting Group (BCG), Capgemini, Deloitte, EY, KPMG, McKinsey, and PwC.
  • The Forrester Wave™: Innovation Consulting Services Providers, Q4 2018 is a report that is available for purchase. It provides an evaluation of the providers of innovation consultancy services.

Research Strategy

Since the global innovation consultancy market size and regional/jurisdictional data was unavailable, we were unable to triangulate figure for US innovation consultancy market size.

As 33% of global consultancy revenue is generated by the US, we were able to estimate the US consultancy revenue, which is $97 billion in 2020 (33% of $296 billion). However, there was still not enough available information to accurately triangulate the US innovation consultancy market size. We also tried to get some information on the revenue of some of the biggest the US market to estimate the market but information specific to innovation consulting services was not available. As such, we were therefore unable to calculate the total US revenue for innovation consulting.

Innovation consultancy is a new and niche sector, which means that the need to collate data on the market is low. For example, Deloitte, a leader in innovation consultancy, does not separate its innovative consulting services from its other services.
Part
02
of five
Part
02

Innovation Consultancy Market Forecast

While there is no publicly available information on the expected growth rate of the US innovation consultancy market, we've identified some mid-sized US innovation consultancy firms. Below are helpful findings and our research strategy to better understand why the requested information is publicly unavailable.

Innovation Consultancy Market

  • Some mid-sized innovation consultancy firms in the US are Innosight, Doblin, Cantina, Kalypso, and Lux Research.
  • The estimated revenues of Innosight, Doblin, Cantina, Kalypso, and Lux Research are $11.5 million, $23.1 million, $10.2 million, $11.8 million, and $15 million respectively.
  • The US consulting market grew by 8.5% from 2017 to $68.5 billion in 2018.
  • The US consulting industry experienced continuous growth between 2015 and 2018.
  • Some top players in the US consulting industry, Deloitte, Accenture, and Boston Consulting Group (BCG) had the highest gains in market share in 2018. Together, they experienced a growth rate of around $5 billion.
  • Innovation played an important role in driving growth for EY and Capgemini. The investment of EY in digital innovation assets such as its wavespace solutions contributed to a growth of 10.1%.

Research Strategy

After an exhaustive search through market research reports, news reports, industry publications, and expert review articles, the innovation consultancy market size and growth forecast for both the global and the US markets are unavailable.
We explored several lists of innovation consultancy firms and searched for the revenues of the US-based firms to determine some mid-sized innovation consultancy firms. We then searched for market research reports and expert reviews featuring the identified mid-sized innovation consultancy firms to find information on the expected growth of the market but none was found. Since the identified companies are all privately held, we could not determine their past revenues in order to triangulate future revenues. Expanding our research to the US consultancy industry as a whole only led to findings on current growth.

Part
03
of five
Part
03

Bresslergroup SWOT

Bresslergroup's strength lies within its expertise in cutting-edge technologies that are in large demand. If used effectively, these advantages can translate into growth in the global technology consulting market as well as the emerging 5G-IoT revolution. Bresslergroup suffers from its relatively weak client base and small market share. As a result, it is vulnerable to competition from its larger rivals.

Strengths

  • Bresslergroup specializes in product design in multiple areas, including the Internet of Things (IoT), medical equipment and rugged products.
  • It has expertise in electronic, digital and information technologies, all of which are highly sought-after in the consulting industry.
  • It has successfully utilized these strength in product development in the past, resulting in favorable media coverage. The long history of the company provides it with ample similar examples, demonstrating its innovative capabilities.
  • Compared to other innovation consultancies of similar background, Bresslergroup's geographical location grants it access to Philadelphia's top-quality talent pool while avoiding the costs associated with being in large cities such as New York.

Weaknesses

  • Bresslergroup has at least 70 team members. In comparison, Priority Designs has only 62. Considering the similarities between the two companies, Bresslergroup is financially in worse shape when it comes to costs.
  • Bresslergroup does not have clients with high recognizability, a valuable marketing asset. Large innovation consultancies with such clients use them to boost their reputation.
  • Despite Bresslergroup's long history, it does not advertise its client loyalty. In contrast, its competitors boast long-lasting relationships with their clients.
  • Bresslergroup's small market share dictates that it does not feature in any of the "top lists" in the industry. This limits its exposure to potential clients. This also means that it cannot compete with the global reach of large innovation consultancies.

Opportunities

  • Bresslergroup's expertise in cutting-edge technologies allows it to tap into the growing global technology consulting market.
  • Business model innovations have created behemoths such as Airbnb. Innovation is going to be more important if companies want to stay relevant in the future. Thus, the demand for innovation consultancies will continue to rise.
  • Development in 5G network technology means the wider application of IoT is within reach. Bresslergroup's expertise in the field enables it to play a leading role in companies' push to smarter living.

Threats

  • In recent years, large traditional consultancies have been entering the innovation consulting market. With the enormous resources available to these firms and their global reach, they pose serious threats to smaller consultancies such as Bresslergroup.
  • The acquisition of smaller innovation consultancies by management consultancies represents a trend of market consolidation. It remains to be seen whether Bresslergroup will be the next target.
Part
04
of five
Part
04

Innovation Consulting Industry Trends

While there is no publicly available data to highlight the trends in the innovation consulting industry separately, there is a lot of information on the trends in the management consulting industry as a whole. Since most large firms like Deloitte offer innovation consulting within the confines of their management consulting expertise, the below findings present the three most important trends in the US management consulting industry. These trends are trends around industry disruptors, trends around industry mergers and acquisitions, and increased emphasis on understanding client's demands.

Trends Around Industry Disruptors

  • Ever since Boston Consulting Group's Clayton Christensen coined the term 'disruptive innovation' in 1995, it has become a buzzword in the management consulting industry.
  • As per a report by CBInsights, the industries most vulnerable to disruption are those with a limited major players, outdated business practices, and slow adoption of technology.
  • The major reason for this trend is the slowness of management consulting firms in adopting newer technology in line with the changes in the industry. As customers become more technologically savvy, consulting firms that use traditional tools will have to adopt Automation and AI, blockchain, data analytics, and digitalization in their businesses or risk becoming obsolete. As per a report by INC, the first companies to feel the impact of technological disruption will be advisory companies like Forrester, Gartner, and IDC as they use outdated tools like Adobe to generate their reports in PDF format besides charging large annual subscription fees.
  • Another major reason for this trend is the rise of the gig economies. Nowadays, companies can obtain their research from credible freelance researchers at a fraction of the cost they normally pay to large management consulting firms.
  • The reasons that make the management consulting industry vulnerable to disruption by technology are labor intensiveness, billable time-based fee structure, outdated research strategies, and compartmentalization of knowledge at the organization.
  • A few examples of companies that have successfully implemented the latest technology and digital design in their business models are PwC, Deloitte, IBM, and BGG.

Trends Around Industry Mergers and Acquisitions

  • As per Deloitte's 2020 M&A Trends Report in which they had interviewed 1,000 U.S. based executives at U.S. headquartered major corporations and private equity firms to understand their insights on the upcoming Merger & Acquisition (M&A) activities, 63% respondents stated that they expected an increase in M&A activities over the next 12 months, 33% respondents stated that they expected the market to stay the same, while the rest 4% respondents expected a decline in M&A activities. However, the corresponding figures from Deloitte's 2019 M&A Trends Report are 79%, 18%, and 3% respectively which shows a general fall in M&A activities in the management consulting industry.
  • The other trend from Deloitte's 2020 M&A Trends Report indicated that divestitures will remain an integral part of M&A since organizations want to cash in on their high valuations and mitigate risks in the event of a global recession.
  • A few other trends emerging from Deloitte's 2020 M&A Trends Report indicated the preference of data protection, monitoring regulations, shareholder activism, and active board involvement among organizations while pursuing M&A strategy.
  • The key reason driving the above trends in M&A activities is the political and economic uncertainty faced by business owners due to the Brexit deal, the trade war between U.S. and China, and rising cybersecurity concerns among businesses. To mitigate these risks, agile consulting companies have developed bespoke risk solutions by participating in M&A activities.
  • Another key reason for driving the M&A trends is the threat faced by traditional management consulting businesses by the growing industry disruptions. Unless companies innovate, they will be driven out of the market. One of the ways to deal with this problem is investing in M&A activities.
  • An example of a successful company that has ridden this trend to acquire success is PwC. Veritas Capital successfully acquired PwC's U.S. public sector consulting business. This deal has enabled PwC to win more government audit bids that were otherwise restricted to them prior to the acquisition.

Increased Emphasis on Understanding Client's Demands

  • As per a report by Mordor Intelligence, the biggest challenge faced by management consulting firms is the quality of work submitted by them that customers demand be changed constantly. 58% of the consultancy firms interviewed by them had indicated this as their biggest challenge.
  • The same report by Mordor Intelligence indicated the other challenges faced by management consulting firms. These included customer retention as stated by 45% of the respondents, business inefficiency as stated by 39%, procurement as stated by 27%, brand value stated by 16%, and lawsuits stated by 8%.
  • The reasons for the above trends are the change in customer demands over time as more technology flood the market and overall backwardness of these consulting firms in adapting to the changed demands and technology that lead to lower customer satisfaction, business inefficiency, and subsequent lawsuits.
  • As per the same report by Mordor Intelligence, the top-5 U.S. management consulting firms that have dominated the U.S. management consulting service market are Deloitte, Ernst & Young, KPMG, PwC, and BCG, in that order. These companies have evolved their business practices considering the changed landscapes and customer demands.

Research Strategy

While doing our research, we started by searching data for the U.S. innovation consulting service industry. However, we could not find any data specific to this market. But we found a lot of data on the management consulting industry as a whole. As innovation consultancy is a relatively new and niche sector, there is no industry-wide consensus as to how firms should approach the subject. Typically, there are three primary approaches as to how firms approach innovation consulting: larger firms offer as a sub-part of management consulting; small boutique firms offer as their main focus; and, other firms focus on product design and technology to present their findings in an innovative manner. A merger of the innovation sector with the traditional management consultancy is currently not possible because of three reasons: assessing the innovation market requires exploratory market research which is not possible with traditional models; lack of industry benchmarks hamper information gathering; and, lack of investment in expensive tools by project owners. It is expected that these problems will be sorted in the coming years as the industry grows and project owners and researchers gather more data about innovation.

Next, while searching upon market research reports for the management consulting industry, we obtained significant reports and studies from top market research companies like Deloitte, CBInsights, INC, Equiteq, and Mordor Intelligence, among others. We studied their insights on the subject. The top three trends have been presented in this research.
Part
05
of five
Part
05

Innovation Consultancies: Perceptions

Businesses rely on innovation to grow and adapt to changes in the economy. While some businesses might have an in-house innovation team, executives often see a benefit to consulting a professional innovation consultancy when large brand repositioning might need to take place. These consultancies bring fresh ideas to the already in-place innovation model or help companies create an innovation model from the ground-up.

Major Perceptions

  • Big brands see innovation as a growth tool that will help with marketing campaigns. Sometimes this reinforces an idea about a brand, but innovation also gives brands a chance to evolve consumer perceptions of the brand.
  • Some businesses prefer in-house innovation to innovation consultancies. Steve Jobs was one business leader who preferred this model, stating that consultancies never have the chance to "learn from their mistakes" when dealing with a certain business, thus never working the entire innovation process as it applies to business.
  • Businesses perceive innovation consultancies as providers of useful input from outsiders without the same cognitive biases that insiders to the field may have.

Useful Services For Businesses

  • Big brands and corporations typically prefer innovation consultancies that can provide "compelling solutions" to corporate innovation.
  • Some businesses currently prefer an innovation strategy that reaches out directly to consumers. This can lead to the consumer being relied on for innovation rather than an innovation consultancy that may not understand consumers of a particular business as well.
  • Businesses seem to prefer innovation consultancies that work alongside business' own innovation leaders to come up with solutions "applicable to our specific industry."
  • As businesses move to make their purpose and branding match new consumer concerns about ethics and sustainability, they see innovation consultancies that are stepping up to provide business models and ideas to transform and define company purpose.
  • Innovation consultancies that provide businesses that opportunity to enter into lucrative partnerships are seen as useful investments by businesses that require a stronger networking base.
  • Businesses also perceive innovation consultancies as capable of linking them to new providers and suppliers.
  • Businesses perceive innovation consultancies as useful for technological innovation, particularly when their business or corporation has already existed for years before technological business models were made possible and more popular.
  • Innovation consultancies are seen as capable of providing innovation framework to larger corporations that may not have an updated framework in place. A Blue Box partner reported a meeting with innovation managers to be "insightful, and I have taken many new ideas home with me, not only on the box but on innovation and our business model as well."

Research Strategies

Overall, businesses seem to regard innovation favorably. While researching several consultancies, such as RocketSpace and Innosight, it was easy to find information that each consultancy wanted to share about themselves. However, it was more difficult to ascertain how businesses, such as Gatorade, Boeing, or Adidas might have perceived the innovative consultancy. Companies such as Gatorade have their own innovations team, thus making it difficult to tell how Gatorade might perceive innovative consulting agencies outside their corporation. In the end, more general perceptions were drawn by the researchers based on the apparent success of innovative consultancies, such as RocketSpace and Insight, as well as services offered by the consultancies that businesses might desire for growth.

Sources
Sources

From Part 01
Quotes
  • "In 2016, the size of the global management consulting market reached 133 billion U.S. dollars."
  • "The total global consulting market revenue reached $251 billion in 2016."
  • "The total global consulting market revenue is estimated to be $262 billion (2017), $272 billion (2018), $285 billion (2019), $296 billion (2020)"
Quotes
  • "With a total value of around $250 billion, the global consulting sector is one of the largest and most mature markets within the professional services industry."
  • "Across the board, the North American consulting market is regarded as the most mature region globally with a market size of 40%."
  • "The US is by a distance the largest national consulting market, with Canada taking just a 7% share of the North American market."
  • "In 2011 the consulting industry was valued at $205 billion, and since the market has grown with an average Compound Annual Growth Rate (CAGR) of 4.1% to a value of $251 billion in 2016"
Quotes
  • "The market in North America is estimated to be worth $109 billion and is growing at a rate of 3–4 percent annually"
Quotes
  • "Deloitte named a leader in innovation consulting by independent research firm"
Quotes
  • "The Eight Providers That Matter Most And How They Stack Up - Accenture, Boston Consulting Group (BCG), Capgemini, Deloitte, EY, KPMG, McKinsey, and PwC"
From Part 03
Quotes
  • "Everything Bresslergroup does begins with understanding the needs of the people who will be using your product."
  • "We craft elegant, intuitive experiences across mobile, embedded, web, desktop, and physical platforms."
  • "We design physical products that express your brand attributes and delight your customers."
  • "We bring ideas into the physical world – and handle all aspects from prototyping through production."
  • "We leverage the latest technologies to build engaging products that keep you ahead of the competition."
  • "We build robust, scalable software to solve complex challenges and bring your product to life."
Quotes
  • "The market for technology and IT consulting services is estimated to be worth $48 billion, representing roughly 20% of the total global consulting market."
  • "Since 2011, the technology consulting has globally seen year-on-year growth, with the Compounded Annual Growth Rate (CAGR) floating around 2.5%."
  • "In the coming years, the IT consulting market is forecasted to face significantly higher demand, accelerating growth, on the back of large technological mega trends, including digitisation, analytics, cloud, robotics, and the Internet of Things (IoT)."
Quotes
  • "Bresslergroup's engineers recently completed work on Spot, a hand-held vision-screening device that represents the first real change in vision screening in 150 years."
  • "Bresslergroup and their client PediaVision collaborated to conceive the initial design concepts of Spot to address this disability early, making screening quicker, easier and more accurate than the current standard of vision screening. The WiFi enabled handheld device makes vision screening as easy as taking a photo and Spot's touchscreen interface clearly displays results accurately and instantly."
Quotes
  • "Our New York space, located in the famed Starrett-Lehigh Building, is home to a thriving workshop and IxD lab, while our London team works in the city’s bustling tech hub in Shoreditch."
Quotes
  • "The University of Pennsylvania, located in Philadelphia, is consistently a top-ranked school in U.S. News’ National Universities rankings."
Quotes
  • "22 years American Standard: Our first client and still one of our most valued. For over 2 decades we’ve acted as a trusted partner, helping them navigate market fluctuations and ever-changing corporate dynamics."
Quotes
  • "Trusted by Fortune 500 and global innovators. Board of Innovation makes Fortune 500 companies innovate like startups, mixing proven methods from design thinking and lean startup strategies."
Quotes
  • "45+ years of product innovation have earned us more than 100+ design awards and 230+ patents."
Quotes
  • "Consultancies that can advise business in how to think outside the box are all the rage. But who are these companies and what do they offer?"
Quotes
  • "Locations: Chicago, London, Munich, New York, San Francisco, Seattle, Silicon Valley, Stockholm, Sydney"
Quotes
  • "Big consultancies like Accenture, BCG and McKinsey have bought up a string of small innovation agencies in an attempt to remain relevant."
  • "But as the threat to incumbents comes increasingly from young, hipster-run startups, corporations are looking to smaller, “cooler” innovation agencies to keep them in the know."
  • "Whether this will make McKinsey and Accenture themselves “cool” remains to be seen. A lot will depend on whether they manage to hold onto enough key staff at their new acquisitions. But it does mean they are turning into the only player in town again when it comes to innovation."
Quotes
  • "Airbnb has contributed to a massive change in lodging segments and how consumers perceive travel by creating a new virtual trust between local hosts and visitors."
  • "As Airbnb strategy to target a wide range of customers, no doubt that it will continue to grow to utilize its large user base and international exposure which at this point is more powerful than large group hotels, Airbnb is only second to Marriott international in terms of total inventory and number of private listings with around 1 million listings."
Quotes
  • "5G is the foundation for realizing the full potential of IoT."
  • "Operators capable of creating and managing an ecosystem of service partners, refining data from their IoT platforms and turning bulk data into smart data will be able to create incremental revenue based on the value of the data rather than just the volume."
Quotes
  • "Bresslergroup has developed a wide range of products in the IoT category, from wearables to home automation devices to medical tools to connected appliances like the Rachio 3 Smart Wi-Fi Sprinkler Controller. "
From Part 05
Quotes
  • "[Big companies see] innovation is primarily considered a growth tool – less talked about as a way to build brand equity. That’s usually seen to be the domain of big advertising campaigns that supposedly land enduring brand values."
  • "How one innovation (which was probably not quick, easy or cost effective to bring to market) has the potential to completely redefine how a brand is perceived and who it appeals to."
  • "The main benefits of using innovation as a marketing tool are: It can often push brands to interesting new spaces outside of the natural plays in adjacent categories It puts meaningful distance between a brand and its competition It can reinforce perceptions of the brand, but also evolve them It has potential to build the brand faster and sometimes more cost effectively than big equity building advertising campaigns"
Quotes
  • "Bringing new technologies and innovative frameworks into large corporations keeps them alive, even ones that were created decades ago. The innovation consulting firms we’ve identified as the leaders in corporate innovation are all providing compelling solutions and have significant track records."
  • "While the high failure rate of startup businesses is no mystery, even large companies are not immune to disruption that puts them out of business — and the threat is increasing. According to a study by Credit Suisse, the average lifespan of an S&P 500 company is now under 20 years."
Quotes
  • "Consultants, he said, miss out on a key piece of professional growth at a company: learning from mistakes. Since they typically swoop in to offer advice and recommendations on a project, but don’t stick around to see the success or failure of their ideas, they’re only seeing a part of the process."
Quotes
  • "Now, in addition to taking the temperature of a representative sample of consumers and combing the data for “insights”, some companies are experimenting with non-traditional, sometimes radical and untried approaches that seek upfront inspiration – and actual ideas – from creative consumers who have a passion to innovate."
  • "Second, while many consumer ideas may be unfeasible, this “wishful thinking” can be used as “ideation springboards” for the design, marketing and R&D team."
  • "With the availability of new and technologies and a little imagination they recognize that they cannot maintain competitive advantage by relying only on traditional methods."
Quotes
  • "They and adidas partnered to create sneakers made out of ocean plastic. They first did an experiment, I think it was 7,000 pairs, which sold out instantly. This year, they have announced they're selling five million pairs of these sneakers at an average retail price of $225 each. That is over a billion dollars of revenue that adidas is going to be making by solving one of these problems in the world."
  • "“Purpose is the new digital.” That's a great way to think about this. Purpose is going to be as disruptive as digital was."
  • "Consumers have long been interested in sustainability in their choices, but social impact has increasingly become a factor alongside environmental impact. We are talking about a new shift in mentality where for consumers, every dollar they spend is a vote for the kind of world they want to live in."
  • "While ethical and sustainable retail are current industry buzzwords, how to enable social impact can prove challenging for brands. Conspiracy of Love is a consultancy founded to help companies navigate precisely this hurdle, and in the last 18 months has helped names like adidas, Sonos, Bombay Sapphire, Coty, Mars, Facebook and Microsoft seamlessly integrate purpose into their brands."
Quotes
  • "In sum, large organizations lack shared beliefs, validated principles, tactics, techniques, procedures, organization, budget, etc. to explain how and where innovation will be applied and its relationship to the rapid delivery of new product."
Quotes
  • "Bringing on board innovation consultants can shake the status quo. Innovation Consulting can bring a different experience and perspective on the business and on the innovation space. Consultants may have less of cognitive biases for they are not necessary experts in the clients’ field."
  • "That’s when Innovation consulting comes into play. In any innovation consulting mission, there’s a huge part of the work that benefits from consultants’ experience with other customers, own expertise and resources."
  • "This is where innovation consulting can help. Focusing the company’s brightest resources to increase value by internalizing innovative technologies found outside seem to be a smarter way to go. Outsourcing the finding of such innovative technologies to well-equipped and expert Innovation Consulting companies seems another smart way to go and potentially a win-win situation."
Quotes
  • "Certainly, technological innovation is a huge creator of economic value and a driver of competitive advantage. "
  • "Depending on a few global retailers for distribution is risky from a value-capture perspective. Because these megaretailers have access to dozens of other suppliers around the world, many of them in low-cost countries, and because furniture designs are not easily protected through patents, there is no guarantee of continued business."
  • "Without an innovation strategy, innovation improvement efforts can easily become a grab bag of much-touted best practices: dividing R&D into decentralized autonomous teams, spawning internal entrepreneurial ventures, setting up corporate venture-capital arms, pursuing external alliances, embracing open innovation and crowdsourcing, collaborating with customers, and implementing rapid prototyping, to name just a few. There is nothing wrong with any of those practices per se. The problem is that an organization’s capacity for innovation stems from an innovation system"
Quotes
  • "Over 3 days, teams from the different packaging companies within BBP (VPK, Hinojosa, Klingele and Cart-One) came together to design and prototype a new packaging solution for a designated customer."
  • ""It has been really insightful, and I have taken many new ideas home with me, not only on the box but on innovation and our business model as well." PARTICIPANT/INNOVATION MANAGER"
  • ""
Quotes
  • "Together we were able to build a tailored process that was applicable to our specific industry. RICHARD BATRLA-UTERMANN, MEDICAL DIRECTOR, ROCHE DIAGNOSTICS"
  • "Board of Innovation brought together the diagnostics and pharmaceutical divisions to draw a human-centered digital innovation strategy for Roche."