The Inevitability of Globalization

Globalization is one of the most overused words in existence at the moment, and there are many platitudes in circulation, as well as much naivety and controversy about its value and effects. That having been said, though, two things are clear: globalization is a trend that will not go away, and it is also the lifeblood of our industry. This year is the year of the global Internet, and at Lionbridge we have now broken through the barrier where 50% of our revenue is related to multilingual content or applications that either power the Net, are rendered on the Net or are used by people with browsers, as opposed to a desktop and operating system.

Globalization means that the circles of inbound and outbound influence (i.e., who influences me and by whom am I influenced) are growing, as are the circles of concern (e.g., the war in Kosovo, famine in Ethiopia, or the price of the euro). This means in turn that the numbers of contacts people have is growing, as is the velocity of the information flow. This applies at all levels: political systems, individuals, families, local groupings, and small and large companies and organizations. Globalization can be measured by the average radius of the circles for each of these actors—circles that have gradually expanded throughout the history of mankind. Thus the focus of attention has gradually shifted from families or clans through villages then cities to provinces, nation states and regional spheres, although not all areas have expanded at the same rate (an Indian village can watch Dallas dubbed into Urdu on TV while at the same time sourcing all food and clothing from within a 25-mile radius). Technology has been a catalyst for globalization, but globalization of the circles of influence has also been either an accelerator or a brake to the adoption of technology.

Language—The Final Frontier?

In this situation, language—the primary vehicle for culture, education and conveying a world view—can be regarded as the final frontier. According to information contained in the Sapient Globalization Report (available from the Sapient Website), there are 6,700 living languages in total, with 100 languages having more than 10 million native speakers, 20 languages more than 50 million and 8 languages more than 100 million. The 15 most commonly spoken languages account for 49.5% of the world’s population, while 51.5% speak 6,600 languages. While it is true that the provision of localized content is linked largely to GDP per capita, it is obvious there is still plenty of upside potential.

To realize this, we need to increase the purchasing power of non-English speakers by increasing their access to technology. At the same time, though, it should be remembered that technology is nothing more than an enabler of the human-to-human interface. Statements by our technology industry to the effect that English will remain the language of the Internet for the foreseeable future (i.e., until accurate computerized translation comes along) are embarrassing, because they do not do justice to this. There is nothing inherently technology-friendly about the English language, it is simply that most technology innovation has occurred in anglo-saxon countries for reasons that have nothing to do with language. The globalization industry encompasses and transcends technology in its role of enhancing the human-to-human interface around the world. It is in a position to do so today as the result of its development over the past twenty years or so.

The Three Eras of the Language Industry

Looking back at the evolution of the language industry, we can distinguish three distinct eras in an increasingly complex ecology:

Prelocalization (pre-1982)

The focus of the fragmented cottage industry at this time was on content, and the value chain consisted of language domain expertise, resource management and possibly project management. Typical tools were initially the typewriter and the fax, moving on to word processors and modems, and the business model was based on the price per word. The largest companies typically earned USD 1–2 million.

Localization (1982–1999)

During this second phase of industry development, translation agencies turned into localization service providers and multilingual vendors gradually emerged. The focus was on IT applications and the skills typically provided were IT-based, plus resource management and project management. Technology revolved around internationalization tools, DBCS, UI tools and translation memory (recycling), but ownership and control of the localization technology products was split between clients, service providers and third-party manufacturers. The result was a piecemeal approach in which solutions were developed for specific problems, but their scope was narrow (tools rather than technologies or platforms) and generally they lacked industrial strength.

In addition, a tug of war increasingly developed between service providers and clients as to who should have the globalization expertise. Many IT clients built up large internal organizations, which meant that service providers were never able to offer real outsourcing or realize true efficiencies on the cost side. At the same time, there was intense pressure to commoditize translation (the “pennies per word” model), which hampered service providers’ ability to invest in and grow the industry.

Postlocalization (1999–the present)

This model is now giving way to a new era, which I shall call “post-localization”. One of the dominant themes here is the expansion of those domains in which globalization is critical to far beyond the IT industry. Companies in these new segments also require globalized content but are not interested in micromanaging the associated technology and process this is allowing the development of truly global solutions. The focus of the industry is migrating to content flows, hosted applications, databases and knowledge bases. At the same time, the value chain—and hence opportunities for revenue—has expanded significantly, and now typically includes translation management (portals, workflows and connectivity), multilingual content management (real time streams rather than episodic projects), global rendering and global testing. Tools usage is expanding to cover MT as well as TM, along with XML, content management systems, and testing tools. All these technologies are becoming increasingly part of a total global solution that gives clients enterprise-scale, the full ability to leverage their translation investment through memories used across enterprise functions, and major reductions in transaction costs if they disintermediate the current fragmented approach of piecemeal globalization tool and globalization service supplier management.

Margins will improve as the business models migrate away from the pure price per word model to models based on time, quality, cost but also availability: subscription, platform and retainer models. Since simultaneously on the pure language side, domain-specific linguistic expertise is getting scarcer, clients will need to secure longer-term relationships with suppliers of the “fewer but better” translators needed to populate the increasingly powerful translation memories that give these clients the consistency, quality, and power of a high-quality enterprise-scale multilingual content stream.

Integrating the Value Chain

Lionbridge is of the opinion that the integration of the value chain is where the real value is. As the move to content continues, customers will not care about analyzing single elements in the value chain, just as international airline passengers do not really want to know whether gate employees are subcontractors or not, who is doing the in-flight catering, nor even (surprisingly perhaps) who supplies the jet engines or the air-traffic control. It is the overall servicethat counts, the point A to overseas point B total travel experience. This means achieving a certain scale. This development contrasts with the piecemeal, fragmented approach traditionally taken by the localization industry.

In conclusion, the heyday of big localization projects is over, as software manufacturers are now moving to an ASP model. Web-enabled streaming content is the new frontier, and this must be of a high quality if customers are to pay for translation, as opposed to obtaining free MT on the Web. This is good news for SMEs, who should find a specialist domain or niche in which they can excel and then connect to global players.

Last but not least, the jury is still out as to whether platform solution companies or pure technology players will dominate the market of the future. This will depend, among other things, on the customers and on how much of the value chain they wish or are able to own. Also, for some potential providers, the challenges of providing technology on a global scale may be too complicated. Getting globalization right is more difficult than might at first appear, and unlocking and harnessing the global reach of the Web is not for the faint-hearted.

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Roger Jeanty, President, Lionbridge Technologies

Roger became President of Lionbridge when the company he founded, INT’L.com, was acquired by Lionbridge in January 2000. As a pioneer of the localization industry with over 20 years of experience, he has recently focused his efforts and his organization on pushing the technical and service boundaries of industrial-strength multilingual Internet solutions. Prior to being the CEO of INT’L.com, founded as International Communications in 1988, Roger has held a wide range of management positions in international and technical areas, at companies such as Data General and the International Software Centre. Roger was raised in France, is an MIT graduate and has completed the Entrepreneur’s Management Program at Babson College. He is a frequent speaker at industry events, including LISA.