French version / version française

The ELAN survey (Effects on the European Economy of Shortages of Foreign Language Skills in Enterprise, December 2006) gives us “the most comprehensive survey of the use of, and need for, languages and cultural knowledge ever carried out” and specifically assesses:
• lost business, or underperformance, due to deficient language skills and cultural knowledge;
• barriers to trade due to deficient language skills and cultural knowledge,
studying 30 large companies (criterion for selection was that they operate internationally with sales in at least 10 countries of the world, including Total, BP, Canal+, Unilever, Saatchi & Saatchi, Pernod Ricard, Accor, Air France, General Electric, GlaxoSmithKline, etc.) and almost 2000 small and medium enterprises (SMEs) from 29 European countries; 89.6% of the firms have more than 5 years in the market. The sample was selected in each country to be as close an approximation of the country's export profile as possible, and representative of the target country's export profile (Manufactures of food products and beverages, of machinery and equipment, of fabricated metal products, of chemicals, furniture, textiles, rubber and plastic products, radio, television and communication equipment, wholesale trade and commission trade and other business activities, etc.), offering a cross-section of company sizes (micro-companies up to medium-sized with 250 employees) and aiming to reflect a national rather than a regional picture. In aggregate (taking all SMEs as a whole), almost ¼ of the respondents were Export Managers, ¼ General Managers, ¼ Managing Directors and ¼ Administrators.

Even if summarizing the 85 pages of the survey in one post seems to be a tricky task, I quote the main elements in my opinion, that is the one of a senor translator who fight almost every day since two decades and longer to make companies more aware of language and cultural challenges, trying to explain to my customers the benefits of a quality translation, vs. the damage of their do-it-yourself solutions while attempting in vain to square the triangle…

I. First point: the CHALLENGES

The survey of nearly 2000 small and medium enterprises found that a significant amount of business is being lost for European SMEs as a result of lack of language skills. Across the sample, 11% of respondents had lost an actual or potential export contract for this reason; 11%: the figure seems low, but related to 20 million businesses in EU19, this “significant amount of lost business” (estimated in a range between €16,400,000 and €25,300,000 of potential loss for respondent SMEs) due “to deficient language skills” would concern about … 2,200,000 companies!

Moreover, this figure of 20 million businesses is a prudent estimation, since it’s far exceeded in EU25. Anyway, by default it means that on a percentage basis, one point = 200,000 businesses at the European Community scale. A magnitude to keep in mind throughout the reading of this post...

Nevertheless, large companies would account for 0.2% of the total, that is to say approximately 50,000 global corporates!

So, for saying it with the survey, “Taken together, this constitutes potentially an enormous loss to the economy of the European Union” since “we estimate the total losses to the EU economy through lack of language skills in the SME sector are in the region of €100 billion per year”, with a €325,000 average loss per business over a three year period.

And if on average 48% of the firms (mainly from non-Anglophone countries as well from more recent applicants or entrants to the EU) “acknowledge having a formal communication (or language) strategy”, what would be the situation if they didn’t?
But what kind of strategies are we talking about? Four elements of “language management” seem to be associated with improved export performance:

1. possession of a formal language strategy (including frequent Website adaptation, with over 50% of businesses in 22 countries showing businesses providing websites in languages other than the national language, most frequently in English for 62% of the firms in the European sample, but also company/sales literature, merchandising information about goods or services and so on),
2. employment of nationals, with 22% of businesses drawing on this resource,
3. hiring staff with specific language skills,
4. using external translators/interpreters.

According to the survey, an SME investing in these four elements was calculated to achieve an export sales proportion 44.5% higher than one without these investments.

In other words, “the ratio of exports to total sales would rise 44.5 percentage points for those SMEs, now without any foreign language investment, that undertook all four types”. SMEs account for between 30 and 60 percent of output, depending on the European country. Assuming, for purposes of illustration, an average across the EU of 45 percent of output, and supposing that SMEs accounting for half of this output adopt the four language skill investments, then exports would rise by 0.45*0.5*0.445=0.10 or 10 percent of GDP (about €1.1 trillion for EU25 in 2005).

To be pointed out that big companies get a larger set of “language strategies” to adopt, for which the survey identifies nine “language management techniques”:
1. Language training
2. In-house languages department
3. Appointment of external translators or interpreters
4. Selective recruitment
5. Intercultural training for the internal workforce
6. Expatriation
7. Inpatriation (employment of local agents)
8. “Buddy schemes” (use of a language-skilled worker or a native speaker to support one with lower levels of language skills)
9. Use of machine translation and web-based tools
Here is the figure.

About selective recruitments, “there would seem to be an expectation on the part of large companies that appropriate levels of language skills should be available from the employment market rather than through capacity-building within the business. Given the expectations of further increased demand for language skills both by large companies and by SMEs in future and current dissatisfaction in business with skills levels and output volumes in languages, it is conceivable that language skills, coupled with business awareness, will command a premium on the employment market in future” (causing a drawback for monoglot employees), “with a concomitant increase in demand for native speakers to close skills gaps which education systems cannot fill”.

Last but not least, about using of machine translation and web-based tools, “It is perhaps not surprising that this was the area where the highest proportion of respondents recorded that their company had tried the approach and had abandoned it (37%)”, but really I can’t understand how MT could be qualified as “language management technique”. In fact it should be worth to talk about “interactive semi-automatic translation systems for fast, high-quality translation of texts in specific fields”, following the orientations recommended by the EC in “A New Framework Strategy for Multilingualism”. Even if this field of study probably has to evolve quickly with Google & Co or the GALE Program, inter alia…

Only common denominator between large companies and SMEs, the appointment of external translators or interpreters. Here 80% of the former companies had engaged external language specialists, with 47% doing so on a regular basis. Interestingly, two respondents of large companies indicated that the policy had been abandoned owing to unsatisfactory experiences with external providers.

These figures are again significantly higher than those for SMEs, where an average across the EU sample of 45% was recorded. “They suggest that some SMEs may be unwilling or unable to bear the cost of translating what might be essential sales and merchandising information and may be leaving the intermediary function to local agents.”

For sure, larger companies have many advantages on SMEs on this matter and are more likely to acquire language skills because of the threshold cost of this investment. Anyway, even if it is true that reason for SMEs to undertake such investments -which represent one of the fixed costs of exporting to certain countries- is improved access to foreign markets, then SMEs will acquire language skills only if the market is working and when their value to the firm exceeds their cost. It means a balance rather delicate to find, as well as an individual answer. Therefore each SME needs to analyze and better understand upstream where to position oneself in relation to the four principal dimensions of language management:

1. Language preparedness: the level of language competence possessed by the company expressed against current and anticipated needs.
2. Language responsiveness: the willingness and ability of the company to accommodate to the language needs of their international partners.
3. Language awareness: the extent to which language issues are embedded into the strategies and policies of the company.
4. Language management: the extent to which the company is able to satisfy its language needs through prudent deployment of a variety of language management tools including for example language training and expatriation.

II. All the above brings us to the principal matter of this study: LANGUAGES

Before asking us which languages and situations should be regarded as more problematical for companies, it is worth to focus on a first evidence.
For instance, a translator doesn’t translate ONLY with words, but ALSO with words (that is what we call “terminology”: all the words I don’t know and need to find out). Each text hides an infinity of situations which go beyond the words: contextual, implicit, drawn from a culture, from a country, from unvoiced language and cultural matters, etc., so many reasons for which a translator having all the words essential to his work (thanks to the dictionaries, of course) not necessarily will provide a good translation if he/she is lacking in other essential capacities, as well technical as cultural, as much in the source language as in the target language, and yet so much in the latter (which should correspond to its mother tongue in a normality assumption).

You can see the figures here (breakdown) and there (global).

To be noticed that the very low rate of Spanish or the absence of Portuguese is certainly ascribable to the fact that the sample belongs to Europe, so SMEs are “more likely to need European languages”, since the enormous natural markets of these two languages (Latin America and Brazil) may probably be of greater interest to large companies, who “are likely to be operating on a more global scale” and “have a need well more pronounced for great world languages” (Italian and German do not appear at all in their list of the needs).

These findings may reflect the fact that “SMEs may be looking to export to markets which are near at hand”, given that sometimes proximity could have a determinant impact, as well as political and free trade unions, or level of political and colonial association which are potentially correlated with sharing a common language. Nevertheless 30% of the companies are identifying “Spanish as a key language for improvement” and “26% of respondents seeing Chinese as a language that should receive investment”.

The need for English seems to be at a similar level in both types of enterprise, who “recognized that their use of English needed to be improved”, and that “levels of competence in business language and awareness of business practices fell short of requirements”.

Here is the comparison.

So English is the first result, not surprisingly, even if the survey notices “It is surprising that English is not more widely spread”. This is probably “due to the tendency for companies to try to use the local language of the market if possible, and if not, then one of the major European languages, such as German or French”. However, “the survey results, as well as comments from individual company respondents, suggest that the picture is far more complex than the much-quoted view that English is the world language”, “almost as if English is no longer perceived as a ‘foreign’ language, but assumed to be the lingua franca for trade in many countries”. In fact, “demand for skills in languages other than English (is) greater than the demand for English itself”.

Evidently, a “global marketplace suggests a need for skills in a multiplicity of languages”, and while “English isn't becoming any less important on the Internet, other languages, such as Chinese, Russian, Spanish, and Portuguese, are becoming comparatively more important”. Since “as the balance of economic power shifts away from domination by the West, with the rise of the so-called BRICs economies (Brazil, Russia, India and China) the relative status and power of global languages such as Chinese, Hindi/Urdu, Portuguese and Russian will increase”.

Reasons mentioned by firms that have experienced actual/or estimated losses in trading opportunities due to lack of language skills and/or staff speaking languages (63 % of respondents) mainly concern:
• negotiations
• meetings, social relationships
• Etiquette (especially in Asia)
• correspondence
• enquiries / requests for information or quotations not followed up
• lack of confidence
• phone/switchboard problems
• problems with agents/distributors
• errors in translating/interpreting
• inability to capitalize on opportunities
• exhibitions/trade fairs, travels
• advertising, marketing
• lack of cultural affinity
• better understanding of mindset of other cultures, etc.

The survey, which adds a languages/situations breakdown, recalls that Usunier (2000) “suggests a number of ways to minimize cultural impact in negotiations in order to build effective transcultural relationships”:

• Being willing to adapt
• Being aware that interpreters influence meaning
• Being aware of cultural blocks to translation
• Avoiding negative stereotyping
• Good prior preparation in inter-cultural understanding

Indeed, negotiation is “one of the key skill areas for working effectively across cultures”. Moreover, “Intercultural problems arising from the use of IT have been identified relatively recently”, so the survey suggest “ways in which programme interface designers might develop their products for optimal use by people from different cultures”.

That is what we call localization in our job, a sector of activity who gaves origin to the recent GILT industry.

Although many alternative ways are not yet explored, Internet surely could offer a range of solutions to SMEs willing to expand in export markets but slow down by language and cultural barriers, even if some of them, rightly or wrongly, are unwilling to bear the related cost. To set an example, how many SMEs bear all costs of renting a stand in an international exhibition/trade fair, without having a good commercial communication, bilingual or multilingual, up to the situation? As for so many “localized” Websites where quality is nothing but an optional, even if by far it is not an economical problem, as I showed it in my study on localized global corporates Websites.

However, in the Internet Era, we can consider that all companies on the Web are “born global firms” having a vocation to export, therefore there is evidence that those which will make it possible to each one of their customer to “decide in which language he wants to communicate”, will have an obvious competitive advantage on those which will use a neutral English where they could not work in their partners' language, since we do know “that successful exporters recognize the value of using the customer's language as a basis for long-term relationship management” and that “the personal contact with foreign customer is necessary for every method of trade”.

Moreover, to communicate with foreign customers in their native language is the first step if you want to better understand them for overcoming communication obstacles due to cultural differences. Even if in most companies of Anglophone countries (United Kingdom, Ireland, United States, etc.), “there is clearly either an issue of complacency based on the lack of implementation of language strategies or simply a belief that English is adequate for all trading purposes”, since having English as a native language, or at least as a widely spoken second language, “opens up significant markets which do not have English as a mother tongue”, “used to trade in over 20 different markets” (vs. about 15 markets for German and 8 markets for French, according to the survey).

In fact 96% of Irish companies never hire external translators/interpreters (even if we can observe that, paradoxically, all main players of the GILT industry have their premises in Ireland…), vs. 85% of UK companies, to compare with 26% of German SMEs who rely upon their services, even if “we see a very strong positioning of German as a major second lingua franca of European business”.

Conclusion

“In each country five ‘influencers’ were asked to comment on the findings of the survey within their area. They represented a cross-section of entrepreneurs, academics working in the business or language training disciplines, political and civil servants working in the business support field and representatives of business organizations such as the Chambers of Commerce”.

“There was a high degree of agreement with the survey's findings, with 79% of those interviewed finding them totally accurate, 21% finding them partially accurate and none disagreeing”.

However, overall, 60% of the influencers thought that “there was too much emphasis upon English and there needed to be expansion of other language knowledge within their country”, and their feedback have “confirmed the outcomes from the analysis of the SME survey”. And given the “diversity of experience and starting positions across the 27 states reviewed”, “it is remarkable that, repeatedly, the issues associated with language skills and economic performance strike harmonious chords across the whole sample”.

Wrap-up:

Across the sample, “the most effective performers amongst export SMEs tend to have a language, or communication, strategy, in place”, an average of 13% of firms claim that the language competence of their staff has influenced the company's choice of export market”, 18% confirm that “they have experienced difficulties with foreign customers due to cultural differences”, and 42 % forecast “an increased demand for language skills” (both qualitative and quantitative) “in the next three years”.

Moreover, exports were important to the sample of SMEs, since “40% of the companies exported more than half of their total sales” (with Italian SMEs being distinctive in their higher relative productivity), and most of them have lost contracts as a result of lack of language and intercultural skills. In particular, smaller firms (with lower turnover) “lack the resource to make forward investment in language skills”.

Related to the European Community scale, these figures result in millions of SMEs and thousands of global corporates, but many of them “are not aware of what skills they possess”. Where this happens, the ‘right person for the job’ can be slotted in at the right time and may indicate “how dependent an SME is on external providers of language support”.

However, it is well known that one’s man joy is another man’s sorrow, so it is the duty of skilled worker of the language-related industries (translation, editing, proofreading, précis-writing, interpreting, terminology, language technologies [speech processing, voice recognition and synthesis], language training, language teaching, language certification and testing and research, etc.) to increase the customers and clients awareness on implications of a good (or bad) provision of language/cultural service, which is all about gained (or lost) markets, valuable (or deteriorated) image and improved (or definitively missed) customer loyalty…

Clearly our path is all laid out to put forward our professions, and our professionalism, which too often lack of recognition and of a fair income.

Lastly, the survey stresses in its general conclusions that “these investments are an essential factor in enabling the EU to compete on the basis of skills and knowledge rather than on the basis of low costs”.

Really, it seems to hear the very words of our professions and here is what is at the bottom of all of that: UE and translators fight for obtaining same results!

For once that a consensus has been reached on what is at stake when we’re talking about challenges and nature of a formal language strategy…