What is the impact of labor displacement on management consulting services?

Edouard Ribes (1)

1 CERNA i3 - Centre d'économie industrielle i3

Labor displacement off-or nearshore is a performance improvement instrument that currently sparks a lot of interest in the service sector. This article proposes a model to understand the consequences of such a decision on management consulting firms. Its calibration on the market of consulting services for the German transportation industry highlights that, under realistic assumptions, labor displacement translates in price decrease by-0.5% on average per year and that for MC practices to remain competitive/profitable they have to at least increase the amount of work they off/nears shore by +0.7% a year.

Mots clés: Professional Services; Labor displacement; Firm growth; Offshoring

Domaines: Gestion et management; Economies et finances; Econométrie de la finance [q-fin.ST]

Edouard Ribes. What is the impact of labor displacement on management consulting services?. 2020. ⟨hal-03090593⟩