Nick, one of our project coordinators, was making phone calls and sending out e-mails when he looked out the window and noticed it was dark outside. It was late and the office was empty. Nick was trying to find a qualified Fante translator and was not having much success. The few linguists for this language that we already had in our system were not available.
Our industry is not about languages or linguistics. That is painful for me to say because I have loved both my entire life. Our industry is actually about business. There is a demand, and we are the supply.
Many of the largest linguistic markets — regions or countries that require language services — will still drive a need for our expertise. However, the global economic turndown of the past few years has brought some unexpected changes to the market. The world now has a brand new list of emerging markets. Global business will soon have to work in some languages more often than it ever had to, and when these customers turn to you for that language support, will you be ready?
The fastest growing markets are not necessarily always desirable as new business opportunities. As of the writing of this article, the fastest growing economy for any single country is Qatar. It has a decent purchasing power parity (PPP) rating, number 55 in the world, but the population of the country is only two million. Almost all of them speak Arabic. The third fastest growing national economy by gross domestic product (GDP) is Mongolia. Mongolian is a language that most language service companies do not currently have large numbers of linguistic resources for, but with only three million inhabitants and a rather weak national PPP rating, number 135 in the world, global business is unlikely to rush into the Mongolian market anytime soon.
World economics has been watching and tracking emerging markets for a long time. In 2001, Jim O’Neill of Goldman Sachs created one of the most well-known groups of such markets when he wrote a paper about what he called the BRIC nations: Brazil, Russia, India and China (Figure 1). These well-known markets have been growing for some time and we have all been talking about them. While these economies are relatively stable, they are also slowing down.
Brazil is a powerhouse, but its economy has been affected by the global downturn because of its financial relationships with other affected countries. A large portion of its trade is with the United States and Europe, which just cannot afford to buy as much these days. Brazil’s largest trade partner is actually China. But China’s economy is also slowing down, which also means less trade.
Russia has a respectable GDP growth rate of 4.3%, but that rate has been shrinking lately. A recent study by A.T. Kearney showed that in the last year, Russia fell from being the fourteenth strongest emerging market to being only the twenty-sixth. Foreign retailers are having a very difficult time trying to get a piece of the in-country market. Russia is maturing and starting to act more like a European market and less like an emerging one.
India’s growth over the past decade has been driven in large part by increasing consumption by its citizens, though that consumption has slowed in the last year much more than expected. During each three-month quarter of the past year, the growth rate of the Indian economy has fallen short of projections, and the rate keeps decreasing. The growth rate of 5.3% in the second quarter of 2012 is still high compared to the rest of the world, but that is the lowest the rate has been there in nine years. The dramatic speed of urbanization in India requires an even stronger growth rate just to keep up with internal demands.
China, like India, requires a high growth rate to support its quickly growing middle class. It does have the highest growth rate of all the BRIC nations. The rate, however, has also been slowing down recently. A study released in June 2012 by the European Union Chamber of Commerce in China showed that almost a quarter of European companies with operations in China are now looking to place most of their new investments in markets outside of China. Labor shortages are also slowing the rate of growth. The Chinese Manufacturers’ Association of Hong Kong reported in early 2012 that 90% of its member businesses are having trouble finding enough workers to hire. Dong Tao of Credit Suisse actually predicts “weak growth” in China for at least the next few years.
All of the BRIC countries are still in the top ten countries ranked by PPP, placing them among the world’s top drivers of consumption. So despite slowing down, they are still strong and we cannot ignore their economic importance. However, most language service companies are already prepared to support a large demand for Portuguese, Russian, Hindi and Chinese. Economists have been watching other emerging markets for a number of years, including Bangladesh, Egypt, Mexico, South Korea and the Philippines. But these are covered with a single major language that we all probably have plenty of resources for, and with the exception of South Korea, growth in these countries is also slowing. The same old emerging markets are still strong enough to pay attention to, but they are not the only markets we should be looking at.
Old markets, new sizes
In the past few years, a few countries have not only become real emerging markets, but they are also appealing to many investors and economists right now. These new “new markets” have some of the highest GDP growth rates in the world right now, higher than the BRIC nations and higher than most developed nations around the world. But they also typically have rather low credit rating scores and volatile economies. This means they offer both great potential reward as well as great risk. The main languages in these countries are common enough that most language service providers probably already have some resources for them. If those economies see very large growth, however, providers might not have enough language resources for the demand that would likely follow.
Turkey geographically connects Europe, Central Asia, the former Soviet bloc and the Arab world. Turkey has wisely used this position in its commercial and political strategies. As a member of NATO and a strong candidate to join the European Union (EU), Turkey is seen as an insider by the Western world. Much of the Arab world also looks up to Turkey as a successful modern Muslim nation. On the other hand, the Turkish economy has been volatile during its recent growth. Despite being affected by the economic downturn of 2008 much less than most other countries in the region, Turkey is currently more vulnerable to instabilities in the eurozone than most nations. Its high account deficit, inflation and consumption built largely on credit make the future of the lira unsure. Investment in Turkey is risky right now. The federal government, however, has been proactive and successful with incentive programs recently that have boosted internal investment and savings. The national deficit is slowly declining, and now that Greece is unlikely to exit the EU, investor confidence in Turkey is returning.
Poland just opened a motorway from its capital city Warsaw to Berlin, making automotive travel and transport between these cities much easier. This new motorway not only connects Poland to Germany, but to the vast highway network across developed Europe. Poland is also building several motorways to connect many important regions of its country to each other. This eruption of infrastructure is just one symbol of the strong growth Poland is seeing, mostly due to the nation’s commitment to investment. Currently, Poland has one of the highest GDP per capita rates in the world, and the highest in Central and Eastern Europe. This increase in individual wealth has translated into huge internal consumption and demand. Also maximizing its location, Poland has been working hard to improve relations with both Russia and Germany, two of the largest markets in the world. Already a big importer and exporter, Poland will grow even faster with improved trade with those two nations.
Indonesia has shown year over year growth, even through the economic downturn since 2008. With trade fairly evenly divided between China, Japan, Singapore and the United States, Indonesia has built its economy on a platform of diversification that has made it more resilient than most countries in the world. This stability has increased investor confidence. The country’s credit rating and PPP rating have both been improving slowly over the past few years. And with very low unemployment, consumption remains high and growing.
Most language service companies have probably provided services in Turkish, Polish and even Indonesian. But how many qualified translators and interpreters do you have for these languages? How many have specializations? Do you have enough?
Languages entering the spotlight
The changing list of emerging markets that the financial world should be watching has also made some languages prominent for the first time in our industry. Language service companies are familiar with providing translation or interpretation in many rural or indigenous languages, but these can often be referred to as rare simply because they are not requested very often. Companies are less likely to be prepared for them. They are more likely to respond to a request by frantically searching for a resource, just like our friend Nick.
India is a BRIC nation, and Hindi is one of the most requested languages in the world for our services. It is true that the growth rate of India has slowed recently. But its growth still far surpasses that of Europe and the United States. According to the International Monetary Fund, India’s estimated GDP growth rate of 7.3% for 2013 beats Europe’s average rate of 1.4% and the United States’ rate of 2.4%. Even the fastest growing economy in Europe, Estonia, only has an estimated growth rate of 3.6% for 2013, and the Estonian market is far smaller with less PPP. Businesses have assumed for years that the only languages needed for work in the Indian market were Hindi and English. Everyone speaks English there, right? Actually, only about 10% of the Indian population speaks any English, and only about one third of the people in the country speak Hindi at all. Educated people or business people are more likely to speak these two languages, but if you want to reach the consumer market, we all know that you need to speak its language.
The state of Maharashtra is the richest state in all of India. Mumbai, the largest city and financial capital of the country, is located there. The official language is Marathi, which is spoken by about 70% of its inhabitants. Only 11% speak Hindi as their native language. Tamil Nadu is the state with the second largest economy in India — it has the highest literacy rate, the third highest foreign direct investment rate, and is the most industrialized state in India. Tamil Nadu’s GDP growth rate is also far above the national average. However, few people there speak English or Hindi; 90% of the population speaks Tamil. Andhra Pradesh has the third highest GDP of any Indian state, and is a leader in the world for IT, biotech and agriculture. Fully 84% of the people speak Telugu as their native language. In sum, these three states have large, relatively wealthy populations and for the most part they do not speak English or Hindi.
The largest economy in Africa is South Africa, but growth has stagnated there due to instability, low investment, high crime and high government regulation of business. The second largest economy is in Nigeria, which is also one of the fastest growing markets in Africa and the world. According to a report by McKinsey and Co., Lagos, the country’s largest city, will have a spending power of $25 billion by 2020. Porsche recently opened operations in Abuja. Young professionals wear Italian suits and Swiss watches. This growing and strong consumer market with expensive tastes is partly due to a stable democracy, a strong banking system, high loan confidence and growing foreign investment. Out of the over 500 languages spoken in Nigeria, nine are official. But many of the official languages do not represent populations with purchasing power. The major languages spoken in the two major markets, Lagos and Abuja, are Nigerian Pidgin English, Yoruba, Hausa, Igbo and Adamawa Fulfulde.
Aside from India and Nigeria, there are a number of other new emerging markets with great consumer potential. With the fastest projected GDP growth rate in Africa in the next two years, Ghana also has one of the highest growth rates in the world. Agencies might need to have more Twi, Fante and Ewe linguists ready for this market. In Central and South Asia, the booming markets to watch are Sri Lanka, Kyrgyzstan and Kazakhstan. These countries speak Sinhala, Kyrgyz and Kazakh respectively. As China becomes more mature, smaller countries are becoming the new emerging economies showing explosive growth and relatively high purchasing power. Malaysia has a very strong economy, but most agencies do not have as many Malay resources. Second only to the tiny nation of Timor-Leste, Papua New Guinea has the highest growth rate of any developing nation in all of Asia at 7.7%. Papua New Guinea is the most linguistically diverse nation on the planet, however, which creates a natural barrier to global business growth. It has over 800 indigenous languages, with almost all of them spoken by less than 1,000 people each. The three official languages combined, Hiri Motu, Tok Pisin and English, are spoken by less than 4% of the six million inhabitants. Business executives throughout the country typically speak English, but the untapped opportunity is the consumer market. Unfortunately, no one has figured out how to reach all or even most of them.
Let us all not forget the linguistic frontier we have been ignoring for years. English dominance over world communication is shrinking as more and more countries gain economic independence and interact among themselves more. We all still rely on pivot languages, but even that reliance is disappearing. How many resources do you have in language pairs that involve two languages other than English?
For example, even though their current growth is slow, long-term projections for the economy of Slovenia are hopeful. The port city of Koper has become the main entry point into Eastern Europe for China and Japan. Asian products are passing through this port to reach Hungary, Italy, Austria, Slovakia, the Czech Republic, Germany, Croatia, Serbia and other countries. Professional translator Tadej Reissner, who lives in Ljubljana and translates between Slovene and English, says that many Slovenians are fascinated with the Chinese culture and language. He knows people who have studied at the rather large Sinology Department at the University of Ljubljana. The Chinese government even opened the Confucius Institute in Ljubljana to provide a business-oriented education of Chinese language and culture to Slovenes. Aside from neighboring countries, the largest number of tourists to Slovenia comes from China. Bilingual signs in public can be seen in many locations in Chinese. The governments for both China and Slovenia are actively working to build their relationship and to increase their trade, and they are also teaching themselves each other’s language so that they can stop speaking through English.
Languages evolve slowly over time, but economics, and therefore market dynamics, shift very quickly. We should pay attention to these economic changes and watch out for new emerging markets. Global business opportunities attract large amounts of money, and global business often requires language services. Agencies that are well-prepared to support the languages of new markets when they first emerge will be leaders in our industry and highly sought after by clients. The thousands of other agencies in the world will continue to refer to these languages as “rare” and simply hope they can find resources. Prepared agencies, on the other hand, will confidently be able to market themselves as experts, and when these languages are suddenly in high demand, clients will seek out those agencies.
The largest challenge that our industry faces with such emerging linguistic markets is actually a lack of qualified resources in those languages. You may not have enough resources because not enough exist yet. We would only be helping ourselves by finding more ways to promote freelance translation and interpretation as a career option in these markets — but that is an entirely separate article.
Nick did find that Fante translator, by the way, and the project was delivered on time. We now have a system to track and rate how prepared we are for our common languages, as well as for the languages that we predict will increase in demand in the near future.