Monday, December 20, 2010

Finally, proof of the connection between language and revenue

For the past several years, I have been talking about the connection between international trade and translation. I have also characterized language as an enabler and a multiplier for business. An enabler because it allows more consumers to learn about products, and a multiplier because companies that start localizing to sell abroad tend to grow faster and never go back to selling in one language only. I have been saying this based on empirical information, logic, and common sense; as I never had the time to make a more detailed study of data.

However, I was recently referred by my former colleague Anne-Marie Colliander Lind to the work of Professor Ingela Bel Habib, a Swedish PhD and Independent Researcher who published a fascinating paper called "The effects of linguistic skills on the export performance of French, German and Swedish SMEs."

Her study demonstrates that multilingualism and economic competitiveness are closely linked. Swedish, French and German SMEs all use multilingualism as a strategy for exports to varying degrees. Only 27% of Swedish SMEs have a multilingual export strategy, compared to 68% of Danish SMEs, 63% of German SMEs and 40% of French SMEs. The study shows that there is a correlation between language and export performance.

Another conclusion from the study is that, contrary to popular belief, English does not suffice in economic relations as many tenders are lost through lack of skills in local languages. In fact, the percentage of companies that declare they have missed out on export contracts due to a language barrier were much higher in Sweden (20%) than in Denmark (4%), Germany (8%) and France (13%).

This study is relevant on multiple levels. First, because Sweden, Denmark, Germany and France have a similar industrial structure and compete for the same international markets. Second and most importantly, because the study is based on economic data, which provides a better platform for the continuous quest by the language industry to establish the Return on Investment (ROI) of translation.

I found this information to be so important and unique to the sales and marketing efforts of LSPs that I invited Professor Bel Habib to speak at ELIA's upcoming Networking Days in Stockholm in May 2011. Don't miss it.

Sunday, December 12, 2010

What I expect to see in 2011

This is the time of the year when people start making predictions for the next year. Well, as I have already been asked several times what I see in my crystal ball, let me share it with you.
  • Content. Let me start with a quote from futurist Ray Kurzweill in a recent interview for Time Magazine: "Our intuition about the future is linear. But the reality of information technology is exponential, and that makes a profound difference. If I take 30 steps linearly, I get to 30. If I take 30 steps exponentially, I get to a billion."

    So content is growing exponentially and that's not news, but for the language industry there will be two trends that will accelerate in 2011. First is the atomization or chunking of content, i.e., translation projects will come in smaller sizes (in line with the trend in the software industry to move to apps). Second is velocity of content, i.e. clients will want these projects faster. These two trends will drive increased demand for productivity gains.
  • Voice. I believe that there is going to be an increase in demand for voice translation. Not only on-site and over-the-phone interpretation, but also dubbing and subtitling. Everybody talks about the ascendance of video, but video means very little for the translation industry; what needs to be translated is what people say, hence the increase in video will lead to an increase in the demand for voice-based translations. (Note to translators: Learn interpretation skills).
  • Languages. Be prepared for increased demand for Indonesian (Indonesia is right after the U.S. in numbers of Facebook users), Vietnamese, and African languages. I also expect increased demand for Brazilian Portuguese as the predictions for growth in the Brazilian economy are very positive.
  • Business. Acquisitions will happen. Expect several announcements and some consolidation at the top. The main discussion will be once again the fair valuation of companies. Naturally Welocalize will lead the charge, but I expect to hear from SDL, Moravia, CLS, HiSoft, and the Scandinavian companies like Semantix, AAC, and LanguageWire. Either as aquirers or targets of acquisition.
  • Pricing. It is true. Price pressure is really a fact now. Mature clients are shopping around for better prices in order to translate more with the same budget. For many years I have said that prices had been stable in the industry, but I believe that in 2011 companies will succumb to the haggling of the big buyers. The only way out of this is to dramatically increase productivity using technology at levels never seen before. This will be especially important for Single Language Vendors. Freelance translators should think about measuring their income per hour or per month, instead of their price per word.
  • The year of interoperability in the cloud. All this talk about privacy and how Google Translate breaches confidentiality clauses will disappear. Translation memories will be shared in the cloud and the chatter of the last two years will become just that; chatter. The big winners in technology will be  the MT solution providers and Kilgray, with its MemoQ technology (that works very well with files generated by their competition and thus achieves de facto interoperability). It is not surprise to me that MemoQ only has raving fans. Asia Online stands a good chance of growing a lot this year as the last stalwart of independent MT. I predict SDL will still grow out of pure momentum, not because of its "innovative" solutions.
What I don't expect to be news in 2011, even though there is going to be a lot of talk about it still, is the adoption of Machine Translation and the impact of Social Media as a source of more translation and localization.

In my opinion, MT crossed the chasm in 2010, and Social Media content is generated almost exclusively in local languages, with very little impact on the demand for translation and localization. Social Media might be a driver, but not demand generator in itself. However, I wouldn't be surprised if a few startups come up with the idea of creating companies focused on localizing Facebook pages and Twitter feeds.

Now I need to catch a plane....

Wednesday, December 01, 2010

Industry Reacts Negatively to EPO and Google Deal. But Should They?

The EPO (European Patent Office) announced today that it signed a Memorandum of Understanding with Google Translate to automatically translate patents into the languages of the 38 countries that it serves.

The immediate response in the social media forums was quite negative, as most reactions involving Google and machine translation of late. But looking closely at the press-release, we see that "the collaboration aims to offer faster and cheaper fit-for-purpose translations of patents for companies, inventors and scientists in Europe."(our emphasis)

What this means is that the goal is to provide good enough translations, not perfect translations. Further in the release, the EPO states that "the partnership with Google to create machine translation tools for patents will help inventors, engineers and R+D teams to retrieve relevant documents efficiently - in their own language - from our wealth of published patent information." This means that the purpose is to allow people to search the EPO database for patents that have been already published, something that falls exactly into Google's expertise: Searchability.And probably something that those professionals already do on their own by copying and pasting information into Google Translate.

As discussed in a previous post, the EU is trying to promote the adoption of a single EU patent system, which is facing some resistance in the European Court of Justice because the court's Advocate General believes that a centralized patent is "incompatible with the treaties" that created the EU.

For Google, this is a bonanza that will provide them with a vast database of quality translations of approximately 1.5 million documents, a number that grows by more than 50,000 new patent grants every year. This means that the quality of Google Translate should improve in several scientific knowledge domains. By definition, patents facilitate and encourage disclosure of innovations into the public domain for the common good. Protection of inventions is achieved by making the information public and not secret. To me, this is a perfect match with Google's stated mission to organize the world’s information and make it universally accessible and useful.

Is this the end of patent translations for LSPs? I don't think so.

Patents are serious business and are worth a lot of money for their holders. Pharmaceutical patents are easily worth billions of dollars over their terms of protection and many lawsuits have been filed because of the interpretation of specific terms. Large organization that file hundreds or thousands of patents every year will not be penny pinching on translations and will still prefer to use the services of specialty LSPs like RWS for filing purposes.

Add to this, the fact that there are other language pairs that are not covered by the EPO/Google deal, and that patents still need to be filed in Japan, China, Brazil, and other countries. Deals like the one announced earlier this year between Asia Online and Lexis-Nexis Univentio can still proliferate, since their goal is to achieve publication quality.

From my point of view, this is a good announcement that proves the growing maturity of Google Translate, which will become a better tool for all its users due to the addition of good content to its database. But Google Translate will continue to be generic tool with good enough results.