Economic Strategy

Economic strategy is a relatively new and rapidly developing area of economic consulting, involving the application of economic principles and methods to provide clients with unique insights aimed at addressing specific issues/problems and/or enhancing their long-term performance.  PMCA’s comparative strengths in economic strategy consulting can add real value and provide clients with new insights beyond those provided by traditional management consulting.  Economic strategy consulting often involves combining the other areas of economic consulting, such as competition and public policy, imaginatively and innovatively.

Illustrative examples showing how clients may benefit from economic strategy consulting assignments include, but are not limited to, the following:

  • Economic impact studies – an organisation may wish to quantify the impact of its activities on the economy and this can be considered in a number of ways, including employment contribution (direct, indirect and induced effects), exports, RDI (research, development and innovation) and contribution to the exchequer
  • Competitor analysis – a firm may wish to learn more about its actual and potential competitors in ‘far’ and ‘nearby’ markets whilst at the same time seeking to better understand the competition policy implications of any actions it might be considering in response
  • Economics-based investment development – specialist economic analysis may be applied to support new development initiatives, for example a new medical facility, higher education institution or research centre or a new integrated enterprise development centre comprising incubator, graduator and possibly demonstration facilities aimed at attracting specific forms of inward investment projects
  • Change management – economics can provide unique insights in respect of large and complex organisations planning on designing and implementing change management programmes, for example in conjunction with strategic/corporate plans
  • Assessment of the cross-border impact of public policy initiatives – the cross-border dimension may be of particular interest to a policymaker or organisation even though it tends not to be explicitly provided for in current public policy initiatives, programmes or existing sets of guidelines
  • Econometric analysis of advertising revenue – specialist econometric analysis may be employed to study the determinants of an organisation’s advertising revenue and to inform its marketing strategy by identifying what has worked, where and why, all of which can be tremendously illuminating for the organisation
  • Formulation of economic development strategies – a regional or local authority may wish to commission an integrated economic development strategy for its region or locality, taking account of employment creation, enterprise development, higher education and innovation, perhaps in tandem with another regional/local authority or with a private sector partner, such as a chamber of commerce
  • New market entry strategies – a firm may be contemplating entering a new product or geographic market, perhaps in another country, and wishes to further understand the country’s macroeconomic trends, consumer demand and specific options for entry, such as acquisition of a local firm, building a new facility or licensing
  • Implementation of economic development strategies – specifying a brilliantly-researched economic development strategy for a regional or local authority will have little or no impact if its practical implementation is not properly catered for, in which case careful attention for actually rolling-out the strategy will be required
  • Competition and regulatory effects of new product development – in the rush to bring new ideas to commercial application, enterprises may sometimes risk overlooking the competition and/or regulatory effects of their actions, which may prove extremely costly in the absence of appropriate competition/regulatory proofing
  • State asset divestment strategies – a national government may require specialist advice on the best options for disposing of certain assets to gain the best possible return in a way that does not (inadverently) create problems elsewhere in the economy, such as competition and/or regulatory issues in other markets
  • Scoping studies – for example, two or more higher education or research institutions may wish to identify and appraise the potential opportunities for enhanced strategic collaboration and to understand how best to implement such cooperation in practice
  • Bringing forward competition impact analysis of proposed transactions – parties to a planned merger or acquisition tend to prioritise due diligence without also considering at an early stage the possibility that the competitive effects of the transaction may mean that the deal would not gain approval on competition grounds, in which case it may make practical sense to bring forward such competition analysis to help identify and manage all of the risks associated with the deal, including the possibility of having to unscramble the transaction subsequently.
  • Behavioural and experimental economics – the growing area of behavioural and experimental economics, which includes consideration of how economic agents make decisions with limited information, has potentially important practical applications in areas such as customer switching where it may offer new insights in helping to make markets more competitive, in the context of the competition policy inquiries, for example.