Network Economy – A Brief Review of the Global Language Service Industry

November 9, 1989 was one of the most important events in modern history, launching an entirely new era of economic thought. This was the day when the separation of Berlin came to and end. It triggered a new era, in which economy could really grow global and legislation preventing global communication could be abolished. And in fact, these laws and rules were relaxed, but there is still a barrier, which has limited global communication since the dawn of civilization: multiple languages. It is not even easy to determine the number of languages spoken around the world (e.g. is the German spoken in Germany the same language as the German spoken in Switzerland, as this can hardly be understood by non-Swiss people?). There are several approaches to define a language, but based on the most commonly accepted parameters of the language service industry, the total number of languages used and/or spoken around the world is 6,913.

However, it is essential for the global economy to have participants, who are able to understand each other very precisely and without slightest misunderstandings. This can be attained in but two ways:

1. By establishing/electing a common language
2. By using language intermediaries

Both solutions have their benefits and downsides under certain circumstances. Establishing a common language usually constrained by national pride and cultural legacy. Thus, the use of certain languages is mandatory in several countries, while neglecting its use is considered a felony.

Therefore the global economy is turning towards the second solution, as this one seems to be easier to realize and pose less obstruction in the way of doing business than lobbying for the change of long-established and highly sensitive policies.

This huge demand led to the creation of intense supply, but based on a very special business model. Before, however, investigating deeper into the language industry itself, let’s review its special requirements and unique characteristics:

1. Industry members are seldom found in one location, as usually different languages are spoken in different countries, thus, native providers are rarely collocated.

2. Huge supply meets enormous and growing demand. The volume of the global language service industry is estimated to be somewhere around $12 billion and handling about 500 million pages of translation and localization every year. If you were to print this amount of paper and put each sheet on top of each other, you would get a tower 28.5 miles high. That is more than five times higher than Everest.

3. It is very difficult to establish objective and indisputable quality measures. Each product and service has to be evaluated on its own, as it is very difficult to determine objective pertinence measures.

These challenges are responded to by an industry based on strong, global networking principles. End clients usually get in touch with agencies or other types of network nodes. These play an arbitrary role between the demand and supply sides, as selecting, testing and managing the right professionals would usually exceed the capacities of end clients or would significantly decrease their efficiency. Network nodes play a similar role like agencies, but these do not order order translations in their own names to bill those to their own clients, but instead support the process of demand and supply finding each other, and provide valuable resources for evaluating providers by applying peer review solutions. Translators are mainly in touch with such agencies and nodes, but are rarely employed by these. Instead, they work in networks, thus creating a global and virtual enterprise. Agencies, nodes and translators are commonly referred to as ‘cloud’. Of course, like each other industry, the language service industry has its real global players as well, who are able to influence the entire market due to their size and relation system. Such global players are for example Lionbridge Technologies, SDL International – involved in both language service provision and technology development – but also Xerox, well known for its high quality office machines.

Currently the market is lead by Lionbridge’s 50 offices, $375 million revenue and about 4,000 people on its payroll.

The cloud is supported by auxiliary industries, mainly involved in developing specialized software products and services. E.g. there are several solutions for recycling the translators’ knowledge-base (called translation memory) or managing localization projects effectively, but possibilities are absolutely endless.

It is a solid fact that the translation industry would not be able to perform on such a high level without networking as it is currently a huge virtual network of individuals and companies. Current development points into the direction of strengthening. This is underlined by the appearance of new solutions enabling translators and other professionals to co-operate on various projects and reuse the knowledge created at other points of the network. A successful evolution of these solutions will be essential to the growth and development of this industry and the companies involved in it.