LSPs in Central and Eastern Europe

As trade continues to expand going both east and west through Central and Eastern Europe (CEE), companies that provide translation, interpretation and localization services are growing along with expanding markets and rising middle classes. The accompanying map provides an idea of where these language service providers (LSPs) are concentrated and where growth is occurring.

The largest concentration of LSPs in the CEE region is in cities with high numbers of universities and in capitals of former empires, which are often one and the same: Berlin, Bucharest, Budapest, Kiev, Moscow, Prague, St. Petersburg, Sofia, Vienna, Warsaw and Zurich, to name but a few. Four companies — two from the Czech Republic and two from Switzerland — made it into Common Sense Advisory’s annual listing of the Top 50 Language Service Providers: STAR Group (#8), CLS Communication (#13), Moravia Worldwide (#19) and the Skrivanek Group (#31).

The CEE region is one of the smallest in terms of market share worldwide, but it has played a longstanding role in the language services industry. The language services market was estimated to be worth $31.44 billion in 2011. All of Europe accounts for 42% of this market, or $13.22 million, while Eastern Europe represents 2.8%, or about $894 million. Four of the region’s top providers (Moravia, Skrivanek, Aspena and CEET) are based in the Czech Republic. Five are in Russia (ABBYY Language Services, Logrus Group, Neotech, Janus Worldwide and EGO Translating), with Studio Gambit from Poland rounding out the group.

This area of the world is very polyglot. For example, 92% of the people in Slovenia between the ages of 25 and 64 speak at least one foreign language, and 72% can communicate in at least two foreign languages, the highest percentage in the European Union. Another example is Russia, with 160 ethnicities that speak at least 100 languages. High oil prices continued to keep the Russian economy afloat in 2011. The 341 translation and interpreting service companies identified in Common Sense Advisory’s annual market study grew at an average rate of 55.28% from 2009 to 2010, far outpacing the overall economy at 4%. In addition to translation, CEE LSPs are recognized for their talent in project management, software and multimedia localization, website globalization, international testing/QA, and telephone and on-site interpreting services. There are also several local companies that provide software for interpreting and translation tools. This region of the world is home to many single-language vendors of language services and smaller multilanguage vendors. As a result, they are well-equipped to work with buyers directly, rather than as subcontractors to global suppliers or large regional providers. If you have the bandwidth to deal with smaller partners for your language needs, these direct relationships can prove to be long-lasting and beneficial.

CEE also has close proximity to Germany. Its economy, the largest in Europe, grew by 3.6% in 2010, during which 770 German LSPs increased their revenue by 15.22%. This was significantly higher than the 7.41% reported by the language services industry overall. The Czech Republic felt the impact of the recession when Germany, its main export market, was affected in late 2008. However, the economy still grew at 2.3% in 2010, while 130 local language companies reported slightly higher growth at 3.57%.