Trends Driving the Language Services Industry: Economic Growth in India, China, Africa and Southeast Asia

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In my previous post on trends driving the language services industry I made reference to the McKinsey Quarterly Report from April 2017. It provides an excellent overview of global trends that will have a significant impact on most businesses over the next few decades. While they didn’t specifically mention the language services industry, I believe these trends will have a significant impact on our industry and, in my opinion, most of it positive.

This post focuses on the impact that high growth, “billion person markets” will have on global business and us. I believe the impact will be even more profound on language services, because it suggests a potentially significant shift in which languages and language pairs for which we will need to provide services.

The billion person markets McKinsey refer to are of course India, China, Africa and Southeast Asia. Many of us in the industry have already experienced an increase in demand for languages in these regions. If these markets grow as the McKinsey folks predict, the demand we’ve seen may be a drop in the bucket compared to the demand we could see.

On the whole, growth in ICASA regions has already surpassed growth in the majority of OECD economies and will continue to do so for some time to come. ICASA countries/regions will most likely be the key drivers of global business and globalization. These markets are urbanizing very quickly, leapfrogging dated technology still used in many OECD countries and have young populations that are increasingly globally connected. A brand conscious middle class is emerging and as this continues, so too will demand for diverse goods and services that originate from both inside and outside their home markets.

While there are unique and fundamental problems in each of these markets that could make their ascent a bumpy ride—infrastructure, digital infrastructure, sustainable urbanization, lack of economic participation by women–each of them holds tremendous potential for economic expansion. As the McKinsey Report says “The more these markets overcome their unique challenges, the more central their role will be on the global stage”. These countries and regions are already pursuing trade and economic arrangements that better serve their interests and don’t follow traditional OECD means. The emergence of the Asian Infrastructure Investment Bank is a great example of such a body.

The table below compares the IMF’s expected growth rates in ICASA regions to selected OECD countries in 2017 and 2018. (Africa is not included, because of the hugely different growth patterns in individual countries.)

Even if these regions run into obstacles and the growth forecasts are off by a percentage or two, they will still outpace OCED growth by twice as much in nearly all cases.

For the language services industry this surely means that the number of languages and non-traditional language pairs will increase. The best depiction of what this could look like comes from Jaap van der Meer’s presentation entitle The Evolution of Translation Technology Landscape, where he shows the evolution of, among other things, language requirements from the 1980’s into the 2020’s. It seems his predictions are coming true.

Since this means our overall market is expanding, I see this is good news. Finding/training qualified and sufficient resources and at scale will be a pretty big challenge though, and gearing up TMs and MT engines will present other challenges. Before we even thing about these things I believe we need to educate ourselves more on this trend and with more granularity so we can understand just on how it will impact our clients and ourselves. A few questions that come to mind:

· What should I be asking my customers about this?

· Which products and services will be in greatest demand in these regions?

· Do we already have expertise that can be leveraged: industry, language, technology?

· What kind of volume are we talking about per language or language pair?

· Do we have sufficient resources to prepare us for this eventuality?

My final thought is a direct quote from the McKinsey article. “The opportunities are large, particularly for leaders who understand how the dynamics of global growth are shifting as the nature of globalisation changes”…

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