New economy

The new economy is characterized by globalization and regionalization. Business service firms whose customers are going global keenly follow the same trend. But globalization in services and in manufacturing differs (Davis, Hanlon and Kay, in Cox, Clegg and Ietto-Gillies 1993). In services - unlike manufacturing - customers cross borders to buy products, barriers to international mobility of production factors (rather than products) are removed, international branding is more important than international trade, and globalization favors high-cost producers and locations. Globalization affects service firms by reputations spreading across borders (reducing customer performance anxiety), clients flowing to firms whose names guarantee world-class service, and service professionals migrating to locations with higher employment and income opportunities.

According to Rose Lockwood (1997: 40) "users of language services would like ... to be able to go straight to a global-service supplier - a one-stop outfit that would do the whole job, from documentation to product information on every possible delivery platform. But in fact there are no truly global multilingual service suppliers, even though many say they are."

The new economy is pulled along by four growth engine industries (Beck 1992):

(1) computers and semiconductors, (2) health and medical, (3) communications and telecommunications, and (4) instrumentation. New economy success requires working in, supplying to, or providing business services for these industries.

Key to the organization of work in the old economy were jobs, careers, hierarchy, mass production, mass marketing, and mass organizations. Today, work is re-organized through projects, worklife portfolios, teams, flexible production, niche marketing, and networked organizations (Webber 1993). In this economy, businesses compete above all for people's knowledge and communications skills. The most important work is creating and managing conversations. An understanding of work today is gained not from gazing at organizational charts, but from mapping conversation flows.

New infrastructure

Management consultant Hermann Simon claims (1996) that "with telephones and fax machines, almost every place on the earth is only a minute away, given that one can overcome language and mental barriers. And the maximum time for the delivery of people and goods is about twenty hours. Only a century ago, it took that amount of time to cover a distance of 100 kilometers (62 miles)". The key infrastructure for the new global economy consists of telematic media and air travel.

Some futurists suggest that increased use of e-mail and videoconferencing will lead to a decline in air travel. The same people suggested the computer would bring about the paperless office. Worldwide paper consumption is up, so is worldwide air travel - and this will continue as more people access the global economy. More than one billion people took scheduled flights on world airlines in 1993 - a number expected to double by 2005 (Thackara 1995). We need both face-to-face and telematic interaction to make the global economy work.

New languages

Anglophone people often imagine English to be "enough" for the purpose of international trade. Not so. In 1947, 12.5 % of the world's population spoke English as a native language. By 1986 that had dropped to 4.8 %. Spanish, Arabic, Hindi and Portuguese are the world's fastest growing languages. Spanish overtook English in the Western Hemisphere sometime between 1984 and 1987, and could overtake English world-wide by 2010 (Taylor 1990). As past German chancellor Willy Brandt said, "If I am selling to you I will speak English, but if you're selling to me ... dann müssen sie Deutsch sprechen" (McCallum 1990).

The future importance of languages other than English will be reflected also in telematic media. Nicholas Negroponte (1996) of the MIT Media Lab points out that of the roughly 10 million Internet host machines today, more than half are in the USA, with most of the rest in G7 countries. The 50 least developed countries have 23 - 19 of which, intriguingly, are in Nepal. But, given the emergence of appropriate infrastructure - like low-cost computers and low-orbiting satellites - the existing distributions of information-related affluence and poverty will not hold.

Already in Malaysia - one of the ten most dynamic economies in the world (Serrill 1996) - Internet users increase by 20% every month. At this rate, a large part of the population of more than 19 million people will be on-line by the year 2000 - and Malaysia is not the only developing country increasing its participation in telematic media at this rate. The consequences of developing countries rapidly gaining access to telematic media will be considerable for the language make-up of these media.

One company handling the multilingual reality of the new economy well is Verifone, the credit card swipe terminal manufacturers. Verifone, with sales outside the United States growing by 50% each year, uses a database to track which of their 2,500 staff speak what language - "a useful tool for solving the day-to-day communications headaches that come from doing business around the world" (Taylor, undated).

Key questions

Here are some of the key questions language professionals and language service firms will have to ask themselves in the light of these important changes at the crucial intersection of language, telematics and economics:

• What attention are we paying to the implications of globalization and regionalization? Does this have implications for where we find our suppliers and customers, where we locate our offices, how we brand ourselves? What new market opportunities does this represent? What hidden threat to our current business and future growth - or even survival?
• What attention are we paying to the four new industrial growth sectors? Are our customers largely located in these promising industries, or are they in declining industries? What are we doing to expand our services into promising industries? Do we have the skills and terminology to be of value to customers in these industries?
• Do we organize our work as individuals or firms to make the most of teams and networks? Do we see our worklives still in terms of jobs and careers, or in terms of projects and portfolios?
• Have we made an effort to determine how best to use telematic media to ensure our survival and success as language professionals and service firms, or are we stuck with the technology of yesteryear? Do we have the skills to make the most of the technology that is available? Do we pursue clients who are "plugged-in", or "wired", or are they ignorant of the on-line world - a sure sign of economic danger! To what extent is face-to-face contact important in our work, and what are the travel implications?
• Do we track changes in the relative fortunes of languages in the global economy? Are we positioned to make the most of English while not neglecting important business opportunities in other languages? Are we, or our firm, skilled with regard to the languages of the emerging economies - such as Indonesian or Malaysian?

The language worker or language firm which does not ask itself these questions (and come up with strategies for the answers they find) will become a casualty of the new world economy - either through outright business failure, or through marginalization and mere survival in the unwired outback of declining industries, declining work opportunities and declining profits. Those who do ask these questions, and shape nimble strategies in response, stand a chance not only of doing well in the new world economy, but also of making a meaningful and satisfying contribution at the cultural cutting edge in the next decades.

Hub and spokes

When considering these key questions, language professionals and language service firms must keep in mind in particular the recent wave of mergers and acquisitions in the translation industry and its localization segment. These come as no surprise in view of Rose Lockwood's comment that users would prefer one-stop global-service suppliers, and of the crucial importance of branding in global service industries. Given the underlying dynamics affecting the industry, I expect a restructuring in terms of a hub with spokes. At the hub of the industry will be the large global language service firms offering a one-stop service for all the language needs of global users. These firms will rely heavily on cutting edge technology (from machine translation to telematic media) and will probably have the three-leafed shamrock structure suggested by Charles Handy (1991:70-92):

1. a professional core of people who "own" the knowledge which makes up the unique core competencies of the global firm, and who manage its identity;
2. a contractual fringe of freelancers and subcontractors; and
3. a flexible labor force of part-time and temporary workers who help out in-house when there is an urgent demand for large volumes of work.

On the spokes will be subcontractors and freelancers who are less reliant on cutting edge technology (although access to computers has long since become obligatory and access to the Internet will soon be), and who specialize in one or a few niches (Japanese-English patent applications, Danish-English marketing materials, German-English technical manuals, to stick to some of the stereotypes) and work in a more traditional way.

Every language professional and every language service firm would do well to decide now which position they want to fill in the new structure of the industry: at the hub in a global firm, or on a spoke in a specialized capacity. There is money to be made and fun to be had all over the wheel. A failure to position is, however, probably the single most serious mistake to make in the next few years of industry restructuring.

References

Beck, Nuala. Shifting Gears: Thriving in the New Economy. Toronto: Harper Collins, 1992.

Davis, Evan, Gerard Hanlon and John Kay. "What internationalisation in services means: the case of accountancy in the UK and Ireland", in Cox, Howard, Jeremy Clegg and Grazia Ietto-Gillies (eds.), The growth of global business. London and New York: Routledge, 1993.

Handy, Charles. The Age of Unreason. Second Edition. London: Arrow Business Books, 1991.

Lockwood, Rose. "Global strategy interview: Rose Lockwood" in Language International 9.1, 1997: 40-43.

McCallum, A. "Internationalising the operations of Australian business with particular reference to the role of language", in Language is Good Business. Proceedings of the Conference: The Role of Language in Australia's Economic Future. Melbourne: National Languages and Literacy Institute of Australia, 1990.

Negroponte, Nicholas. "The next billion users", in Wired, June 1996: 220.

O'Hagan, Minako. The Coming Industry of Teletranslation: Overcoming Communication Barriers through Telecommunication. Clevedon: Multilingual Matters, 1996.

Rapaport, Richard. "The Network is the company: interview with John Gage of Sun Microsystems" in Fast Company, April-May 1996: 116-121.

Serrill, Michael S. "Unlock the Shackles: A competitiveness survey finds that lean government and free trade favor economic growth", in Time, 10 June 1996: 49.

Simon, Hermann. Hidden Champions: Lessons from 500 of the World's Best Unknown Companies. Boston: Harvard Business School Press, 1996.

Taylor, Len. "Language Planning for Business and Industry", in Language is Good Business. Proceedings of the Conference: The Role of Language in Australia's Economic Future. Melbourne: National Languages and Literacy Institute of Australia, 1990: 63-64.

Taylor, William C. "At Verifone it's a dog's life (and they love it!)" in Fast Company, at undated Web page http://www.fastcompany.com/t1/inprint/01/vfone.htm.

Thackara, John. "Lost in space: A traveler's tale/Een reisverhaal", in Archis 2.95, 1995: 16-25.

Webber, Alan M. "What's So New About the New Economy?", in Harvard Business Review, January-February 1993: 24-42.

Dr. Gideon Strauss
Senior Researcher: Language, Telematics and Economics
Language Facilitation Programme
University of the Free State
P.O. Box 339 Bloemfontein 9300
South Africa

Tel: ++27-51-401-2405
Fax: ++27-51-448-3976

E-mail:fggs@rs.uovs.ac.za