The size and state of the language services industry, including the ranking of the top 100 largest language service providers
The language services industry is growing and there is no end in sight. For your company to dominate the competition and be ahead of the game, you require insights. The Nimdzi 100 is widely considered an industry standard and is read by tens of thousands of people in the translation and localization space and beyond. LSPs, localization buyers, investors, savvy job seekers, and analysts alike will benefit from this invaluable resource.
This special section is just a preview of the detailed insights you’ll find in the full Nimdzi 100, one of the company’s flagship publications.
State of the Language Industry
We have long said that our industry is impervious to crises. This is because we don’t create anything from scratch, we transform. This data shows that, in many ways, the COVID-19 pandemic has acted as an accelerator. Businesses that already had remote solutions in place grew, whereas those who ran entirely onsite-focused operations saw an accelerated down-turn. LSPs with large clients in the travel and hospitality sector were hit hard, just as LSPs who predominantly offered onsite interpreting, whereas businesses with a diverse client base were able to navigate fluctuations in demand much better.
Early predictions and industry surveys throughout the year painted a gloomy picture and it needs to be acknowledged that some LSPs had significant losses, while others merely stayed at the level of their 2019 revenue, as a result of the disruption caused by the pandemic. LSPs who were negatively impacted were mostly in the small-to-medium-sized range and/or focused on a niche that was hit hard, such as the retail industry or onsite interpreting.
However, the language industry as a whole has once again proven to be resilient. The majority of players interviewed for the Nimdzi 100 reported a strong finish to the year and some even experienced record growth in 2020. These reports are backed up by data collected via surveys and financial records of publicly traded companies which show that, even in 2020, the language services industry as a whole once again grew. These findings are no surprise if we consider that, in 2020 and beyond, language services have played a key role in saving lives and advancing knowledge and communication across the globe.
While some of what we’re seeing in the data might just have been one-time benefits, such as increased profitability due to reduced costs for travel and office space, we can expect that the pandemic will have a lasting impact on how all of us, including our customers, do business.
Five year growth projection
When calculating the addressable market for their services, commercial providers should limit the opportunity to 60% of the total figure. Firstly, not everything is outsourced, as a significant portion of the overall volume is performed by in-house teams on the buyer side. For example, the European Union employs about 5,000 staff translators and interpreters. Secondly, the market size calculation includes revenues for both translation companies and their suppliers, i.e., a part of the revenue is counted twice.
As it stands, in March 2021 we are still in a worldwide pandemic and lockdown measures of varying degrees continue. Nobody can say for sure how long this situation is going to last. What we do know is that, once restrictions are lifted, we can expect an explosion of content. Once production can resume in the media space, the market will be flooded with new movies and TV shows, which will translate into a massive spike for media localization down the line. The travel and hospitality business plummeted during the pandemic but it is reasonable to assume that once people are allowed to travel again, this segment of the industry will experience a huge boost. In addition, once 5G becomes widely implemented, it will make content available exponentially faster and at scale. This means that more content will be created, which in turn will trigger more localization demand in various segments of the industry.
Nimdzi’s estimate is that the language services industry reached USD 55 billion in 2020 and should grow to USD 58.3 billion in 2021. Considering a CAGR of 6.0%, the industry would be valued at USD 73.6 billion by 2025.
The Nimdzi 100
The Nimdzi 100 ranking is based on revenue and lists the top 100 largest language service providers (LSPs) worldwide.
Purchase the full report to see not only a ranking of the top 100 LSPs by revenue, but also a watchlist of large players that don’t disclose their revenues, and a detailed overview of the size and state of the language services industry.