THE LANGUAGE SERVICES MARKET: WHAT’S IN A NUMBER?

* * *

Original post in French, translated by Theresa Shepherd, whom I would like to thank warmly for her excellent work.

* * *

The concept of a “language services market” is extremely vague and elusive. It has yet to be clearly defined—it may even be indefinable.
So how can we accurately calculate the value of this market? The publication of the first China Translation Industry Annual Report in December 2012 has contradicted most of our accepted truths, making us question the reliability of the studies we usually depend on. Are the values underestimated or overestimated? Who’s doing which? And is there some happy medium at the heart of it all?
Let’s take a quick look at several markets, according to the most recent surveys:

• The Global Language Services Market
• The Chinese Language Services Market
• The European Language Services Market

* * *

• The Global Language Services Market

For many, many years, it was virtually impossible to gain a clear idea of what the global translation market might be worth.

Until the arrival of Common Sense Advisory (CSA for short), an independent research firm founded in 2001 by Donald A. DePalma and Renato S. Beninatto, that publishes an annual report on the global language services market. Every year it offers additional insights and it has essentially become the benchmark in the field.

So what does the latest report (published May 2012) say?

That in 2012 the translation market reached $33.5 billion and was expected to rise to $37.6 billion in 2013, for anticipated growth of about 12.5%.

But let’s take the 2012 overall revenue to start ($33.5 billion), which breaks down as follows:

• Europe 49.38%
• North America 34.85%
• Asia 12.88%
• Oceania 2.00%
• Latin America 0.63%
• Africa 0.27%

So we have Europe with the lion’s share at $16.5 billion ($7.6 billion of that for Western Europe alone), followed by North America with $11.7 billion, then Asia with $4.3 billion.

The latest estimate: in 2015 the global market is expected to be worth $47.3 billion, a rise of over 40% compared to 2012.

As I mentioned, the CSA study is the benchmark in the field. But are these figures reliable?

Let’s try to figure this out, starting by checking Asia, specifically China.

• The Chinese Language Services Market

On December 6, 2012, the Translators Association of China (TAC) celebrated its 30th anniversary in Beijing. For the occasion it released the 2012 Report on China’s Language Services Industry, according to TAC Vice President Guo Xiaoyong the first authority industry report released by the Chinese translation industry since the People’s Republic of China was founded in 1949. It is intended to serve as a reference for the “scientific planning” of the language services industry in China.

But according to this very official report, the revenue generated by the language services industry in 2011 was $20 billion (125 billion yuan), up 26% from 2010.

In terms of jobs, this translates (no pun intended) to 1.2 million employees active in the language services industry, including 640,000 translators (53.8% of the total).

The forecasts for 2015 expect revenues to more than double, to reach $42 billion (260 billion yuan) for 2 million jobs.

These figures are wildly at odds with those published by CSA, which projects just barely $5 billion more in 2015 ($47.3 billion) for the entire global market. What’s wrong with this picture?

CSA also has 2012 revenues at just $4.3 billion for Asia. Positing that China alone accounts for about one-quarter of this (the other leading countries being Japan, Taiwan, Thailand, Singapore, Korea and India), that would give us revenue of just $1.1 billion for China according to CSA—totally incompatible with the results from TAC.

If we consider the language services industry as covering more than just translation, we can reasonably imagine that 53.8% of the employees in this industry produce 53.8% of the revenue, or easily more than $10 billion for translation alone in 2011, ten times more than what CSA estimated for 2012.

And yet CSA remains the benchmark. As an example, take this recent study published on May 15, 2012. The Government of Canada’s Translation Bureau commissioned PricewaterhouseCoopers s.r.l. to conduct a comparative analysis “for 5 linguistic service organizations in Canada and 3 international organizations” after first establishing “a benchmarking framework from which to conduct the comparative analysis.” It begins with an overview of the global language services industry (section 1.2.):

The language services industry is global in nature, with over 25,000 organizations that provide Language Service Providers (LSPs) in 152 countries. The international industry has the following characteristics:

• The market is highly fragmented, with the top 50 LSPs generating only US $4 billion of the US$31 billion market.

• The LSP market is growing at an annual rate of 7.41%, and is expected to reach US$38.96 billion in 2014. Most of the revenue generated remains associated with translation services.

Yep, these figures are taken straight from the 2011 CSA study, though the report does not cite the source for this excerpt.

Another major study gives us an idea of the differences in the research from one firm to another, and of the difficulty of clearly identifying the parameters.

This is a report by Ambient Insight published in April 2012, titled “The Worldwide Market for Digital English Language Learning Products and Services: 2011-2016 Forecast and Analysis,” which puts 2011 revenue for the entire language industry at $82.6 billion, including $58.2 billion for language learning and $24.4 billion for the GILT (Globalization, Internationalization, Localization & Translation) segment.

Or $7 billion less than CSA found for 2011.

• The European Language Services Market

According to CSA, in Europe we have $16.5 billion in revenue in 2012, including $7.6 billion for Western Europe alone.

On the European Union side, a recent and very thorough study published in July 2012 conducted as part of a series on translation and multilingualism, titled “The Status of the Translation Profession in the European Union” (see also sources), unfortunately does not touch on the economic aspect. Instead we have to look back to the 2009 study by the Directorate-General for Translation on the size of the language industry in the EU, which evaluated the market at €8.4 billion in 2008, with an estimated annual growth rate of over 10% and forecasts of €16.5 billion in 2015.

The author noted, however, that “although this forecast is highly speculative due to fragmented information available on the industry, it should be considered conservative. Further research is required to confirm that the real value of the language industry can be expected to be well above 20 billion € by 2015.”

Entirely plausible estimates, especially if you consider that one-tenth of this figure (€2 billion) was already being generated in 2010 by the EPO with an average cost of €75.15 per translated page.

As for the CSA projection for 2015, it’s $23.4 billion in Europe, so considering the exchange rate that’s more or less the same.

But there is a figure in the 2012 study that surprises me. It is cited in Appendix B: Why there are about 333,000 professional translators and interpreters in the world.

Again, a conservative estimate, well below the 700,000 estimated by Common Sense Advisory (Beninatto et al. 2008).

And yet, how do we reconcile this 333,000-700,000 professional translators and interpreters in the world with the 640,000 translators just in China, calculated for 2011 alone in the “2012 Report on China’s Language Services Industry” published by TAC?

“"Exaggerated figure” was Renato Beninatto’s take, but if we accept it, that means that there are close to one million professional translators/interpreters globally, two-thirds of whom are in China and the remaining third everywhere else!

As always, the Chinese market is the most difficult to pin down, in the great tradition of the Middle Kingdom, but for a population that is roughly one-fifth of the planet and a country that is now becoming the top trading power in the world, this number does not seem implausible!

The bottom line: If we take $43.4 billion in revenue for the language services market in 2012 (replacing the $1.1 billion for the Chinese market according to CSA with the $10 billion extrapolated based on the TAC report), that gives us annual revenue per translator/interpreter of $43,400. That falls in the middle range of the rates we usually see!

Granted, it’s an average à la Trilussa (a famous Roman poet from the 19th century whose idea about statistics went something like this: if you have two people and one eats two chickens all by himself, that makes one chicken each on average…), but hey, statistically it’s not inaccurate!

It remains to be seen to what extent any of these studies are reliable. What do you think?

P.S. This TAC conference was really a big, major political event:

The Sixth Plenary Session of the 17th National Congress of the Communist Party of China (CPC), held in Oct. 2011, made the decision to deepen the reform of the nation's cultural system and promote a vigorous development and prosperity of socialist culture. 

(...) 

The conference is the second one of its kind in 61 years. In Dec. 1951, the General Administration of Press and Publication (GAPP) held its first session with the aim to improve the quality of translations and help translators nationwide to cope with the nation's development in an orderly manner. At the seminar, Hu Qiaomu, then vice minister of the Publicity Department of the CPC Central Committee, and Shen Zhiyuan, then director of the GAPP Compilation and Translation Bureau, delivered the keynote speeches. It was decided that two documents, i.e. "GAPP Regulations on Translated Publications Published by Public Publishing Houses (Draft)" and "Regulations on Translation Works Conducted by Compilation and Translation Departments of Government Institutions and Non-Governmental Organizations (Draft)," would be submitted to the State Council by GAPP for their assessment and approval.

Moreover:

A National Conference on Translation marking the 30th anniversary of the Translators Association of China (TAC) was held on Dec. 6 in Beijing. Co-organized by China International Publishing Group (CIPG) and TAC, the conference drew top industry insiders, journalists, academics, and leaders of relevant government agencies. 

This is the second nationwide conference on translation since the People's Republic of China was founded in 1949. Applying the propositions presented in the Report to the 18th CPC National Congress, the translation community in China hopes to utilize the conference to make translation services more effective in presenting Chinese culture on the global stage as well as improve international communication.

(...) 

The theme of this year's conference is "Taking Chinese Culture to the Global Stage and Promoting China's Translation Works." 

Guo Xiaoyong, executive vice president of CIPG and executive vice president of TAC, delivered the conference's keynote speech, entitled "Promoting China's Translation Cause and Serving the Nation's International Communication Efforts." 

(...) 

The first part of a two-volume Annual Report on China's Translation Industry was also issued to attendees.

So the fact that outside of China nobody in the language industry seems to be aware of such a meaningful event is really surprising, and I can’t explain it myself!