Guest post from the Association of Translation Companies. We were excited to see this news on how the industry is growing, even in places where localization is well-established — The editors at MultiLingual.
A survey of Europe’s language service providers (LSPs) indicates optimism for further expansion of the sector (currently worth more than €20 billion), with respondents indicating that they are 2.5 times more likely to expand their business either locally or internationally than sell and leave the sector*.
The poll was commissioned jointly by the European Union of Associations of Translation Companies (EUATC), the Globalization and Localization Association (GALA), the European Language Industry Association (ELIA) and the European Commission’s European Master’s in Translation program (EMT) and its Language Industry Web Platform (LINDweb) project.
Responses from across 35 European countries, found that 53% of respondents expected to see growth in the sector in 2016, while predictions relating to their own business performance were equally optimistic; 55% expect to see an increase in sales. This does however indicate a slightly more cautious attitude than in 2015, when predicted increases in sales volumes proved to be over-optimistic at 59%, compared to real increases of 42%.
Roy Allkin, Chair of the Association of Translation Companies, comments: “The European language industry is of significant value, with the UK sector alone worth more than £1billion and employing 12,000 people. It is therefore very encouraging to hear continued predictions of growth for 2016.
“The survey did however uncover significant variances in optimism across Europe, ranging from 72% positivity in Germany to a concerning prediction of 15% reduction in Italy. Responses from UK LSPs placed us fourth in the positivity rankings with a score of 47%, a figure which will have undoubtedly been impacted by uncertainty surrounding a possible UK exit from the European Union.”
One factor, which is clearly influencing levels of optimism, is the pressure on pricing. This is ranked as the most significant challenge facing LSPs in 2016. While twice as many companies expected prices to increase rather than decrease in 2015, reality was somewhat different, with 30% of respondents reporting price deterioration, against only 8% who experienced an increase.
When considering factors affecting the industry as a whole, machine translation and competition were also perceived in the top three most significant challenges and trends for 2016.
Currently the use of machine translation is strongly dependent on the size of the company, ranging from 30% in the smallest segment (those with sales less than €250,000) to more than 70% in LSPs with a sales volume above €5 million.
And, in an effort to gain competitive advantage it is also the larger companies that are investing in certification, again ranging from only 12% in the smallest LSPs to almost 90% in the largest (those with sales over 20 million Euro’s / year).
Roy concludes: “There are a significant number of factors which will work together to shape the evolution of the language industry over the course of the next few years, from the adoption of new technologies to the impact of broader economic conditions.
“While we must accept that some of these are not within our control, it is vital for LSPs to adopt a pragmatic attitude to challenges and opportunities which they can influence. Client expectations are continually increasing and it will be those agencies, regardless of size, which respond best to these which will reap the rewards in the months and years to come.”
*Online survey conducted across 35 European countries by the European Language Industry Association, European Union of Associations of Translation Companies, Globalization and Localization Association with the support of the European Commission’s Directorate-General of Translation through the LIND project and the . Responses obtained from 39 UK language service providers.