Report on the European Language Tech Industry

Under government auspices, a new report has been published by French information and language industry bodies on “Automatic Language Processing in the Information Industry”, researched by the Paris office of Bureau Van Dijk. Well, maybe not such a new report: the data comes from a 2002 survey and I believe was first presented at LangTech 2003.

Here are the key findings as presented in a Paris press conference today:

· The language and speech tech market divides into 80% text and 20% voice. [Not everyone would agree with this].

· The European LT market in 2002 was worth 510 million €, or 33% of the world market.

· UK, France, Germany and Italy accounted for 60% of this market, the UK having the biggest share at 18%, largely due to its flourishing speech tech market.

· In France, the key segments (from document management via translation automation to searching) were content management (search) type applications (25%) and document management (categorization etc) systems (20%). Translation accounted for only 10%.

· Most players estimate growth –to stand at 10-15% a year. Most demand is for document management at 23% and search applications at 21%.

· ROI come mostly from time saving rather than financial returns. Main costs incurred come from feasibility and needs analysis, followed by software development, then customization and maintenance. Multilingual applications in general double the ROI horizon.

· Main trends: shift from supply to demand, as new mobile and desktop platforms in a multilingual search and personalized work space require specific tools.

· The European LT market is growing at 6.9% annually, compared to 9.4% in the USA. The global LT market will be worth 2 billion € in 2005 and should rise to 3 billion in 2007.

I don’t think these findings will surprise anyone. Language technology appears to be but a minor segment of the software or IT industry, with lots of small players (over 300 in Europe alone) that have emerged as spin-offs and startups from the R&D base and are now ripe for M&As. Consolidation is already more striking in the U.S. than in Europe, probably due to such structural brakes as nation/language-based fragmentation in Europe, and an endemic culture of lower investment in risky ventures. This means that current players tend to have small customer footprints in a few selected industries where advanced business intelligence (rather than, say, translation) is a key concern. The scope for real growth and infrastructure investment is often minimal

But if an ambitious global player in a related but external segment – voice technologies, for example – decided to integrate language technologies to provide a better user experience for, say, mobile phone/PDA access and search with built-in multilinguality, then that player might start cherry picking any European players with good technologies for translation, or semantic searching. It happened once before in Flanders Language Valley, though aided by considerable public investment. For the time being though, it looks as if pervasive language technology will continue to be “decades away” as press articles keep telling us.

Andrew Joscelyne
European, a language technology industry watcher since Electric Word was first published, sometime journalist, consultant, market analyst and animateur of projects. Interested in technologies for augmenting human intellectual endeavour, multilingual méssage, the history of language machines, the future of translation, and the life of the digital mindset.

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