Four Scenarios for the Translation Industry
How are we in the translation industry coping with the corona crisis? We have a population the size of a city like Paris, and our job is to ensure that citizens, patients and consumers can use products and read websites in their own languages. Except that we are all spread around the globe, and now, like almost all other workers in the world, we are locked down in our homes. Most of us have by now settled in on the new reality of the corona crisis and are doing our best to stay safe and healthy. But other worries are creeping into our minds. What will happen to our jobs and to our business when this crisis is over?Join our Collective Planning Exercise!
To clarify some of our options and think more collectively about the immediate and medium-term future, TAUS would like to ask you to join in a well-known management technique called scenario-based planning. This can help build a framework and make predictions based on a careful analysis of the variables, or what we call the driving forces. This produces a matrix with four plausible scenarios:
Using these scenarios, we would like to invite you, as users and stakeholders in the global translation industry, to vote on what you think is the most likely scenario for our industry in 2021, and to share your comments through an online survey (details at the end). Based on the votes and feedback, we will publish a longer report and organize a virtual conference in June to help us all plan for action in an uncertain future. Please read the rest of this article before you vote, so that the options are perfectly clear and relevant to your own observations and anticipations.
Combining the possible outcomes of the driving forces shown above, here are four possible “re-think” planning scenarios for the state of the translation industry in the summer of 2021.
1. Translation Business Redux
We look back on the corona crisis of well over a year ago and happily conclude that it was not as severe as it could have been. Economies came back to life after a lockdown of a few months, and people started traveling again in June-July 2020. Most translation companies experienced a dip in revenue, but it wasn’t devastating. And now, a year later, everything is more or less back to normal.
2. Translation Business Reshuffle
The 2020 corona crisis has left its scars on the translation industry even though the recession didn’t last that long. We saw quite a few agencies closing shop. A few of the larger investors took advantage of the crisis and absorbed more businesses, leading to further consolidation at both global and regional levels. Thousands of language workers lost their regular jobs. This was a sobering experience, but there were no fundamental changes. The virus simply reshuffled the existing pack.
3. Translation Business Recession
This is the worst case scenario. Unemployment rates in the USA exceed 35%, and all western economies are slowly climbing out of the recession. Several airline companies have gone bust. Governments have taken control of economies and nationalized vital sectors. And global supply chains have been restructured. In 2021, the translation industry is likely to retract by 30 to 40%, if anyone can actually measure it. Many agencies have not survived and global suppliers have undergone a major restructuring. The only possibly good news is that big global-tech companies have further stepped up their investments in their machine translation and AI programs.
4. Translation Business Reinvention
Yes, the recession was gruesome, and the world has changed significantly. But something good has come out of this crisis: Even though people don’t travel around the world as much anymore and global traffic in physical goods has been falling due to a radical reorganization of supply chains, there is a remarkable surge in different kinds of activity in virtual space. Not just in e-commerce but also in education, healthcare, community life, and citizen-government communications. At the same time, the new economies in Asia and Africa seem to be emerging faster, partly due to more sharing of information on a global scale. As a result, the translation industry is reinventing itself in a major shift towards greater innovation and automation. Yes, quite a few old-style agencies have disappeared, but new start-ups have taken their place. Investments are now going into data transformation and engine customization and personalization. This process of reinvention is the first step on our way towards a Massively Multilingual World.
Drilling Deeper into the Horizontal Axis: Which Economic Future?
The longer the COVID-19 crisis lasts, the greater the uncertainties, and the more likely a recession in China, Europe and North America well into 2021. Others say the opposite. Here are the main options:
1. Some say the corona crisis will peak this April and that, come May, Europe and the USA will follow China and open up businesses again. The optimists even say that economic activity will jump back up in the summer of 2020 like an elastic band. The massive economic aid programs from the US government, the European Central Bank, and European governments will help businesses and individuals bridge the lockdown and survive the downturn. In this scenario, the economic recession in the world in 2020 will be minimal, and we will return to growth again in 2021.
2. On the other hand, more and more voices are predicting longer lock-downs and a prolonged recession. And even when the corona crisis finally dies down, journalists and commentators say that the world will never be the same again. Uncertainties along this axis vary from the observation that globalization is losing momentum to the concept that social distancing will start taking root in our societies and cultures, resulting in drastic reductions in the travel, hospitality, sports, tourism, conference and cultural sectors.
3. A crisis of this magnitude could serve as a catalyst for even more fundamental, accelerating developments. Think about geopolitical shifts, the end of the American empire, and a partition of global epicenters into corresponding linguaspheres - Anglo-Saxon, Chinese, Russian, and multilingual Europe, for example.
4. What if a lengthy crisis creates a space for new ideologies to rock the neoliberal and capitalist system? A key issue already is whether global supply chains can survive in their present form. Companies may be looking at on-shoring production, reorganizing supplier networks, and accelerating local innovation with agile AI and 3D printing, for instance.
5. At the same time, a recession together with shrinking demand in developed western economies could accelerate the commercial activities of global firms in the economies of South-East Asia and Africa, which potentially could boost the translation industry in supporting hundreds of new languages.
Drilling Deeper into the Vertical Axis: How Resilient is the Translation Industry?
1. The problem here is not so much the hundreds of thousands of translators, reviewers and editors who mostly work as freelancers on zero-hour contracts. To understand the future, we need to know how the owners and executives of the tens of thousands of agencies and software firms in the sector (plus their investors and customers) will react. For some, business volume may already be declining; others may see a surge in activity because they have a more agile or solid business model. But a working-from-home policy is presumably not an innovation for our industry!
2. Mergers and acquisitions in the translation industry could be stalled as investors take a wait-and-see position. Owners hoping to sell out will have to hope for better times ahead.
3. On the other hand, never waste a good crisis! Some larger translation companies are already cutting their freelancer rates by 15%. And are customers paying less or are they building a buffer for worse times to come?
4. A lengthy lockdown and a global recession could lead to a shake-out. Some industry executives will go out of business due to lost customers and contracts. This will lead to consolidation as bigger companies with deeper pockets pick up business opportunities at lower rates or buy others’ assets.
5. Beyond the financial instability issue, crises highlight the imperfections in our current approach to business. De-globalization, for example, will not necessarily lead to a reduction in translation volumes. Physical mobility may be reduced, but in the post-corona world we will all feel much more at home in cyberspace. And the critical differentiator online is real-time delivery. Big customers, who have always led the dance in the translation industry, will draw their vendors’ attention to the weaknesses in their localization processes. These customers will almost certainly start demanding faster turnaround-time and even real-time translations in larger volumes and more languages at lower rates.
6. And so finally the crisis might well open up new opportunities for the translation industry to accelerate its still slow-moving innovation and automation strategies – what we are calling its reinvention.