Economics: Industry focus


The banking industry is going through a period of unprecedented change, as it adjusts to the post-credit crunch business environment. It faces tougher regulation, government scrutiny, funding pressures and a competitive environment. 

Our banking economists combine microeconomic and macroeconomic skills with financial and banking market knowledge. We have addressed some of the key issues facing the industry, including the economic impact of regulatory reform, the assessment of fair prices for competition and legal purposes, how the cost of equity differs across different parts of banking activities and forecasting of house prices and impairment levels for business planning.

We use our knowledge to help our clients meet their challenges around:

  • Policy and engagement with Government on banking issues
  • Advising on fair pricing of consumer banking products
  • Understanding and impact of regulatory frameworks
  • Assessment of country risk
  • Assessment of the cost of capital for valuation, investment appraisal or regulatory purposes
  • Economic forecasting and simulation of the key drivers of banking businesses
  • Strategic decisions such as market entry or product design

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Government & Public Sector

Government & Public Sector

Governments worldwide are under pressure to do more with less and to ensure that public money is spent more effectively and efficiently. They have to make difficult choices around priorities and are looking for new ways to fund and deliver public services.

Our government & public sector team combines an in-depth knowledge of all parts of the sector with the ability to apply advanced economic techniques to analyse these issues.

We use our skills and knowledge to help our clients meet their challenges by:

  • Helping them to determine strategic priorities
  • Appraising the expected impacts of policies, programmes and projects
  • Advising on how to set prices for public services
  • Establishing frameworks for competition and commissioning
  • Shaping approaches to regulation
  • Evaluating the impact of policies, programmes and projects to assess value for money.

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Economics is playing an increasing role in shaping the direction of healthcare policy. In most health systems, economics is used to answer questions about efficiency and value for money in the way healthcare resources are allocated. However, economics is now taking a greater role in shaping the underlying design of healthcare reform.

Economic regulation, coupled with market-based reforms, is a fundamental component of healthcare reform in many countries. PwC’s economics team has been at the heart of shaping these reforms and working with clients to respond to the challenges and opportunities that they present. We work closely with a range of disciplines across PwC to ensure our economic insights are consistent with the practical clinical and organisational factors that shape strategy and reform development.

We use our skills and knowledge to help our clients meet their challenges around:

  • Developing economic regulation in healthcare systems - price regulation and competition policy
  • The impact of changes in commissioning patterns and local markets
  • Opportunities and growth strategies for providers
  • Competition issues and cases that have come before the regulator
  • Improving the focus and effectiveness of commissioners decisions


The media industry is full of opportunity and uncertainty. Complex, and often conflicting, forces are reshaping media consumption habits, which require new ways of creating, distributing and monetising content. Companies are searching for new ways of making money in a world where, particularly online content, has previously been free, and which may require a transformation of its operating model.

We help media organisations answer difficult questions and make better decisions founded on economic analysis. Examples include:

  • How do we seek regulatory relief or government support for our strategy?
  • Where are the sources of profitable growth, whether through new revenue opportunities or pricing strategies?
  • How much of an effect will new media exploitation have on old world media (e.g. video-on-demand, DVDs, online news distribution, hard copy newspapers, etc)? When will they reach the level that offsets the decline?

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The pharmaceutical industry, and the environment it operates in, has changed significantly over the last ten years.  On the discovery side, the nature of products coming through the development pipelines has shifted from high volume, low cost products, to niche specialist products, often with high price tags. At the same time, healthcare payers have changed their approach to pharmaceutical reimbursement, using economic techniques to understand value and influence pricing and market access accordingly.

In resource-constrained health systems, greater pressure is being brought to bear on pharmaceutical prices. Healthcare systems are looking to deliver efficiency improvements and become smarter about what healthcare they purchase and how. At first sight, this creates a challenge for industry as the focus is inevitably on the pricing of products. However, it also creates opportunities for industry to engage with health systems and other partners in new ways. 

Our economics team helps to develop strategies that allow companies to adjust to the new environment by:

  • Advising on market access strategies,
  • Building strategies for demonstrating the value of products to healthcare payers
  • Developing opportunities for companies to reposition their product portfolios (e.g. using new technologies to alter a product’s value proposition)
  • Opportunities for building partnerships between other sector participants and with health systems
  • Understanding how national policy influences the environment for the pharmaceutical industry


The communications industry has undergone rapid change over the last few years, driven by new technologies such as mobile, internet, NGN, as well as regulatory changes and increasing market liberalisation and convergence. The pace of change is set to accelerate further and decision makers are faced with long lists of complex issues to resolve.

Our Telecommunications team combines an in-depth knowledge of telecoms markets around the world with the ability to apply advanced economic techniques to the analysis of these markets. We use our knowledge to help our clients meet their challenges around:

  • Regulatory strategy, case building and accounting
  • Sector Policy
  • Cost modelling
  • Interconnection
  • Retail price regulation and pricing strategy
  • Cost of capital
  • Comparative efficiency analysis
  • Separation Support
  • Business modelling
  • Competition policy
  • Next Generation Networks (NGN)
  • Universal Service Obligations (USO)
  • Mobile termination rate
  • Number Portability
  • Mobile Virtual Network Operator (MVNO) Access
  • Spectrum allocation and policy
  • Regulatory Compliance and Assurance

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Transport systems have undergone radical reform over the past decade, and the pace of change will be relentless in the new economic climate. In air transport, routes have been liberalised and competitive forces continue to work through the system, with airlines refining their business models and exploring potential mergers. Airports are generally subject to economic regulation but the precise form of this regulation varies by airport, by country and over time. In rail, the challenges include how best to develop high-speed services while also upgrading conventional services.

Debates continue to rage on issues such as how best to incentivise investment while maximising use of infrastructure, and the relative merits of vertical integration as compared with separation. Charging for transport infrastructure is heavily influenced by international rules which are inherently subjective. On the road, issues relating to pricing are likely to become increasingly important as congestion, environmental and fiscal pressures increase. There is a focus throughout on ensuring that regulation and competition is effective, given the crucial role played by public funding.

Our economics team works closely with industry specialists to deliver solutions which go beyond the standard. We link economic insight with commercial reality, cut through complex problems to develop simple but effective solutions, develop logically rigorous solutions which are evidence based and that work in practice as well as in theory, and work with stakeholders to develop trust and solutions which last.

We use our knowledge to help our clients meet their challenges around:

  • The development of regulatory frameworks and strategies
  • Implementation of frameworks and strategies
  • Advice on specific issues - fair pricing, cost allocation and efficiency analysis, demand analysis, the benchmarking of charges
  • Regulatory due diligence.


The utility sector is facing significant changes in the way it is being regulated, with a focus on quality of service for customers, efficiency and the increased role of competition.

Our economists have backgrounds in the utility industry, finance and research, with many years of experience of regulation and market reform in the UK and internationally. We have been working on regulatory developments since utility privatisation and continue to be involved in today’s evolving market.

Our experienced utilities economists help our clients with:

  • Regulatory submissions  including business plans, cost of capital and benchmarking
  • Assessing the impact of government and regulatory reforms to the utilities market
  • Market entry and pricing/tariff strategies
  • Development of wholesale markets and system operators.

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Barret Kupelian

Barret Kupelian

UK Chief Economist, PwC United Kingdom

Tel: +44 (0)7711 562331

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