BIMILACI 2007 The Advanced Knowledge Economy
The Role of Professional and Expert Consultants
Giovanni Casartelli – Consulting Services Adviser Operational Policies - The World Bank
4/21/2009
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Workshop on Consulting Services
Consulting Industry Assessments
Common Key observations: • Public sector needs independent consultants but operating environment very difficult • Weak Policy, Economic, and Sector Regulations, Erratic Demand, Institutional Dysfunctions
This results in: Poor Quality of Services, Low Productivity, Frustrated Middle Class, Brain Drain, Capacity Destruction Strategic Approach Recommended: • Vision, Policy, Legislation, Demand, Capacity Building In an Action Agenda
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Workshop on the Consulting Services Sector
The Advanced Knowledge Economy
“Embodied Knowledge” originates in firms, public sector institutions (Internal Knowledge), Labs, Research Sites , Shop Floors and captured in products. Siemens, Sony, Fiat, GE, CiSCO
“Disembodied Advanced Knowledge” research institutes, business & law schools, university, public administration, consulting firms. It is applied to problems and captured in management systems, project designs. Examples: UK (Oxford Analytica), USA (Accenture), Finland (Yakko Porrvy)
Maximize rate of transformation of tacit into explicit knowledge
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Why Consultants?
• Dynamic providers of knowledge linking with • • • •
university, R&D, professional schools, industry and finance They allow “economies of knowledge” Provide “impartial advice” that legitimizes sound and transparent choices and by doing so: Consulting professions strengthen “stability of free and democratic frameworks” Innovators: IT systems, management reforms
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Professional Consulting and Expert Services Sector
Vision, Will Motivation Adaptability
Care Why: Creative Knowledge, Wisdom: Know Why: System Understanding
Know How: Tacit Knowledge Tailored Design Effective Execution Know what: Explicit Knowledge, Routines
Strategy Planning Complex Policy
Trained Intuition
System Integration
Advanced Skills Information Systems: SAP/ORCL
Project Design, Software Services
Packaged Data Bases
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Operational Framework of an Advanced Knowledge Industry 1
Government
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Culture of Capacity & Accumulation of Knowledge Capital 12
Advisory Council: Ministries of Science & Technology, Planning, Education 2
Lessons Learned ,Quality Awareness and Capacity Built
Dynamic Knowledge Policy:
Dialogue between Government Academia Professional Associations, Industry 13 Industry Complex Increased Capacity Experience & Qualifications, Recognition 9 Improved Investments
Increased GPN
3 What is new, productivity and capacity enhancing?
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Executing Agencies generate TOR and RFP including Specifications for Quality, Innovation 5
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Client Capacity increases Demand for Quality Innovation
15 Professional Capacity increases Quality of Productions 6 Enhanced Quality & Innovative Proposals
Quality Attributes: Innovation, Efficiency, Impartiality, Sustainability Transparency
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Prof.& Expert Consultants
Professional Consulting Services
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Action Agenda
• • • •
Action Agenda Steps Forum Inauguration of the agenda AA Study Phase Implementation Phase
Role Players • Champion: Cabinet Member or MP • Secretariat: Ministry of the Economy • Forum Leaders: Consultants Associations and Line Ministries and PA
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Consulting Sector Action Agenda Industry Leaders Forum
Government Side
Public Works, Energy, Transportation, Education
Agenda Secretariat: Ministry Plan. Facilitates and Hosts
Develop & Agree on Agenda Main Objectives And Scope
Jointly Implement Agenda
Professional and Expert Consultant Associations
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Workshop on Consulting Services Sector
Action Agenda Working Groups And Structure of Dialogue
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• •
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Vision, global & AKE country scenario Regulatory reform AK capacity assessment Demand Assessment
• Third Countries’ Experience • Market access, dynamics
and Development • Operating environment and sustainability • Supply Assessment • Role of Associations
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Workshop on Consulting Services Sector
Step 1: Awareness, coherent vision and policy
• Country with an “open AKE” that meets public and
private sector, needs an “enabling environment” • Vision based on present indicators and country’s circumstances, resources and talents, strategy • Compare Experience of others: positive US, Australia, Scandinavia, New Zealand, Malaysia; less positive: EU; less than positive: Italy, Latin America • How much substitution local-external?
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Workshop on Consulting Services Sector
Step 2: Regulatory Framework
• Organic act required? Only to describe
nature and role of consultants and establish collaboration of state and professions independent management consultants (1933 Banking Act) accounts for the particular characteristics of each profession or one regulation?
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• Economic regulation institutionalizing role of • Sector regulation required? Regulation that
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Workshop on Consulting Services Sector
Regulation (Procurement) compatible with sustainable growth scenario of the AKE Professional Expert Knowledge Capital Accumulation
Specialized Knowledge = Asymmetry of Information High Growth Symmetry of Information= Simple Knowledge Slow Growth Accepting Asymmetry of Information requires client loosing temporary control of something
Space for Trust? Judgment Capacity?
What selection methods? What Contracts Agency or Fiduciary?
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Workshop on Consulting Services Sector
Regulation on Consultants should Consider their Aspirations, how?
• Respect for Consultants’ Ethos: Who are
consultants? • Recognition of Professional Skills Importance • Suitable Contracts
• Sustainable Remuneration: minimum tariffs or
market competition?
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Workshop Consulting Services Sector
3rd Step : PA Demand for Consulting Services and Outsourcing
• • • • •
Strategy, Planning, Project Studies Design and Install new Information Systems Project Preparation Economic, Financial Advisory Services Project Supervision and Result Assessment
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Workshop on Consulting Services Sector
Step 4: Government assesses its capability
• • • •
Resource Identification & Outsourcing Capacity building in Procurement and Management of Consulting Services Evaluation of Performance
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Workshop on Consulting Services Sector
Step 5: The Role of Academia and RD
• • • •
Measure Productivity Levels Demand ethical performance Assess, compare strength Discuss, commit to agenda implementation
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Workshop on Consulting Services Sector
Step 6: Consultants Associations Role
• • • • •
Design institutional dialogue Demand ethical performance Assess industry strength Assess norms and standards Discuss, commit to agenda implementation
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Workshop on Consulting Services Sector
Risk of Indifference Professional Poverty Trap Symptoms
• • • • • •
Ineffective legislation Low productivity of academics Associations over-protect special privileges Consultants form case of nepotism Bureaucracy indifferent to external advice Bureaucracy competing selling services on the side Failing programs and projects Falling country competitiveness
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Professional Poverty Trap
Government Professional and Knowledge Capital Decreases No Lessons learned
Advisory Council: Ministries of Science & Technology, Planning, Education
Lack of coherent Policy
Dialogue on Quality between Government & Professional Associations is irrelevant
Stagnant GPN Low productivity
Poor Legislation on Professional Consultants Cumbersome and costly regulation
Consultant qualifications Decrease. Professional are barely sustainable
Poor quality of Investments follows
Poor TOR and RFP, Excessive price competition, Low remuneration Poor contracts
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Professional development becomes impossible. Capacity of Consultants sinks
Quality of project services deteriorates
Consultants
Quality inputs decreases
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