No One Wears Shoes Here

Last Sunday was Father's Day here in the United States and I spent the day catching up on my reading while the children played around me. Among a series of interesting articles and OpEds in BusinessWeek, Fortune, the New York Times, and other publications, I found an interesting column by Rana Foroohar in the Curious Capitalist section of Time Magazine called "Why the World Isn't Getting Smaller."

The spirit of the article is that globalization is not such a big thing as some of us want it to be, and — using Thomas Friedman's image — that the world is not that flat.

Rana points to some facts:

• More than half of global trade, investment and migration still takes place within regions — much of it between neighboring countries.
• Some 80% of global stock-market investment, for example, is in companies that are headquartered in the investor's home country.
• Exports represent about 25% of the global economy.
• Less than 20% of Internet traffic crosses national borders.
• Only 2% of students attend a university outside their home country.

The author also discusses the fact that one of the effects of globalization is actually more demand for localized products as emerging markets now have money and confidence to call their own shots and demand for customized products and solutions.

My father was the son of a shoemaker from Italy and grew up in a small town in Brazil and he used to tell a joke that came to my mind as read this column. It's the story of two shoe salesmen who were sent to Africa to see if there was a market for their product. The first salesman reported back, “This is a terrible business opportunity, no one wears shoes here.” The second salesman reported back, “This is a fantastic business opportunity, no one wears shoes here.”

Whether the world is getting smaller or not doesn't really matter. The reality is that as countries become wealthier, populations start to demand products to meet their needs, and they want these products in their own language. So for the language services industry, I would say that the world is a fantastic business opportunity, no one speaks all languages here!

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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....