In the GILT world, “g” stands for globalization (the remaining letters signify internationalization, localization and translation), i.e., the process whereby a company modifies its operations from A to Z to make its products and services world-ready. This process responds directly to the globalization of world markets, i.e., the process whereby, in the interest of free trade, nation-based legal, regulatory, fiduciary, logistical and technical barriers are progressively reduced.

Hardly a new phenomenon. In the last fifteen years, however, globalization with a capital “G” has been given a colossal boost by technological innovation: the internet, a personal computer on every desk and a laptop on every lap, as well as increased connectivity and compatibility. Separating the economic phenomenon from the technology to identify the driving force proves nearly impossible.

No one can deny that both brands of globalization have been a boon to the translation industry. Business is booming as never before. Demand currently outstrips supply and is growing. According to industry pundits across the board, the growth in demand shows no signs of flagging any time soon. That’s the good news.

Quality-Speed-Cost, the Other Bermuda Triangle

The bad news? For the last fifteen years, “growing pains” in the form of fierce competition, downward pressure on prices, radically increased speeds of work, and decreasing job security have wracked the translation industry much as they have the rest of the global economy. Once a respected craft, some would say an art, translation and its practitioners have fallen victim to galloping commoditization, technology-induced tailorization and the low-cost lure of offshore outsourcing. (Editor's Note: Taylorization refers to the processes introduced by Frederick Winslow Taylor (1856-1915), an American engineer who pioneered "scientific management," which supported the methods applied to production within the Ford automotive factories.)

The other Bermuda Triangle, where clients expect ever better, faster and, of course, cheaper products and services, has swallowed the industry whole. And like the unfortunate who stumble into the original Bermuda Triangle, some companies have entered this super-charged commercial zone and pftttt! disappeared off the radar, never to be seen or heard from again.

Economics 101

Simple, orthodox economic theory teaches that if demand for a product or service exceeds supply, the invisible hand of market forces will cause the price of said product or service to rise. According to that theory, given the high demand for translation services and the relatively meager supply, there should be plenty of work to go around and, logically, the translation market would belong to sellers. The reality gives lie to the theory.

A Statistics Canada report on the translation sector in Canada describes the translation industry as highly competitive. Freelancers, small- and medium-sized businesses dominate the market. Profit margins are very thin. (“Profil des industries canadiennes de la langue, Rapport Final,” (Statistique Canada, 2004), pages 15-16.) An Allied Business Intelligence (ABI) report paints much the same picture of the industry in the United States. “According to one estimate, there are so many translation agencies in the U.S. (over 3,000) that no one company can claim to have more than 1% of the market share.” (“Language translation, Localization and Globalization” (Allied Business Intelligence, ©2002), page 4-19.)

One reason for this apparent malfunction of orthodox economic theory is that translation is not a machine-tooled widget or a mechanized service; it is a labor-intensive, knowledge-based service. Even aided by slick high-tech tools, translation agencies cannot radically increase productivity. Certain economies of scale that the manufacturing sector enjoys are not available to the services sector. Stripping production down to a lean and mean core of managers that pulls together linguistic SWAT teams on a per project basis has proven to be only slightly more profitable. Simply put: Translation is a people business.

Another reason that agencies have trouble making ends meet, never mind turning a profit, is that clients place translation squarely in the “cost” column of their spreadsheets. In an environment in which cost-cutting has become a civic duty, eking out higher per word rates is tough and getting tougher. Despite industry efforts to convince clients that translation adds value, the perception remains that translation costs a bundle. The ABI Report demonstrates how ingrained that perception is when it asserts without qualification that, “A human translator is expensive, typically charging $50 and up per page of 250 words.” (“Language translation, Localization and Globalization” (Allied Business Intelligence, ©2002), page 4-7. Note that cost and price are not the same thing. Many freelance translators would love to see $50.00/page, i.e., $0.20/word.)

The language technology industry has not helped matters any. No one pretends to deliver FAQMT (fully automatic quality machine translation), but tools’ vendors still tout the near push-button efficacy of their products. Contract negotiations with increasingly tech savvy clients have been known to stand, stall or fall on fuzzy counts.

Modern Times Meets Dilbert

Whereas one might think that intellectual work enjoys immunity from the indignities of the manufacturing assembly line, new communication, translation and workflow technologies prove the opposite. Tucked into home offices, preserved from rush hour traffic and the nine-to-five rat race, blessedly removed from water cooler politics, windowless lunch rooms, dreary corporate picnics, holiday parties and management-imposed casual days, freelance translators continue to enjoy an illusion of relative liberty. Every day is casual day, right?

The fact is that, thanks to the internet, the shop floor is as boundless as the work day. The phone may never ring, but work arrives all the same, to the beat of the 24/7 mantra, shuttled through web-based workflow applications that with a gentle ping announce, “You have work.” CAT (computer-aided translation) and analytic tools crunch the numbers – word count, fuzzy count, repetitions, and deadlines based on industrial speeds-of-work benchmarks – then spew out disembodied text chunks for speed-of-light treatment. Rate negotiations have been reduced to a binary executive decision: take it or leave it, or, worse, to the vaudeville of on-line translation auctions where the cry is, “Do I hear a lower per word rate?” Going, going, gone.

The scenario, exaggerated but increasingly a reality, brings to mind two endearing paragons of parody, Chaplin and Dilbert, with one notable difference: the humor grounded in human interaction is absent. In the post-modern cottage industry of translation, translators’ most intimate interactions are with their computers.

With demand high and growing briskly, industry analysts worldwide worry about the small, aging and, ultimately, shrinking pool of human translators. The ABI report notes that, in addition to feeble growth rates (3% to 6%), within five years of entering the profession, 35% abandon ship. The report gives some insight into the reasons for shrinkage: “The main reason for leaving the profession is the lack of advancement opportunities. Translators perform basically the same job function throughout their whole career. There is also a limit to the amount of money that can be earned.” (“Language translation, Localization and Globalization” (Allied Business Intelligence, ©2002), page 4-12.)

People can and do endure monotony and meager pay rates. Dehumanization and devaluation of work are less tolerable. They are also harder to measure but, in the final analysis, might play a larger role in a translator’s decision to stick it out.

Taken together, all of these globalization-related factors play a role in shaping the tough market in which translators and agencies do their best to work well and survive. Add another factor to the mix, however, and things can get complicated and, sometimes, even volatile.

In-country: A Sincere Quality Proposition or Gloves-off Off shoring?

In the first heady years of we-are-the-world internet-itude, absolutely anything and everything seemed possible. Why offer just garden variety FIGS (French/Italian/German/Spanish) when Russian, Greek and even Japanese were a mere cyber-stone throw away? Why indeed. Not only could you tap far-off human resources, you could promote that capability as a real value added.

The word “in-country,” once an adjective associated in the U.S. with troops shipped out to serve in the Vietnam War, got a brand new look and feel when used in the context of translation. One of countless examples illustrates this translation-specific usage: “[ABC Translations] combines the quality of in-country translation with the efficiency of centralized processes and infrastructure to deliver lowest total cost, reliable, high-quality translation services.” The name of the company is not important. What matters is the way in which the notions of “in-country,” “quality” and “low-cost” come together in one seamless sales pitch.

In the late 90s, thanks to the internet, geography became increasingly irrelevant. Armed with little more than a PC, a high-speed internet connection, and an FTP server, a translation company could now tap a vast pool of “in-country” human resources worldwide, that is, truly native speakers who still lived in the distant mother-tongue country.

And, in a sense, this new-fangled approach made old-fashioned good sense. Language changes quickly and in the world of IT, one of the hottest markets for translation, it changes even quicker. A translator who lives outside of the country that incubates the changes may not master the most current terminology as compared to an “in-country” translator firmly rooted in the linguistic ebb and flow. And who better than a native speaker living “in-country” to translate marketing texts peppered with the latest buzzwords and pop culture references?

An added bonus, of course, “in-country” rates frequently, and often substantially, beat out the domestic market for the same language pairs. When the heydays of high-tech wound down at the end of the millennium only to come to a near halt on September 11, the rate difference began to count for more in the profit modeling of translation companies.

In the summer of 2002, at the ATA Translation Company Division (TCD) annual conference in Montreal, Betty Galliano presented a very personal and very powerful portrait of the reality for translators and translation companies in Argentina. Galliano, CEO of Ocean Translations in Rosario, described the grim economic situation in Argentina. At the time, nearly 50% of the country was living at or below poverty level. She acknowledged that she could afford to charge considerably less per word than companies in the “first world.” Then she asked if, given the relatively low cost of living in her country, would it be proper to charge “first world” rates.

Heated discussion ensued. Future visions were floated: the translation market would break out into a two-tiered world in which “front office” managerial tasks would be handled in the developed countries; the grunt work of translation, the “back office” tasks, would be handled in the developing world. No pat answers emerged.

In Toronto, at the 2004 ATA annual conference, the same question engendered an equally lively discussion. This time the debate centered on quality, “You get what you pay for,” the battle cry. Translators from Argentina took umbrage.

Cecilia Irós, managing partner of IM Translation & Training in Córdoba, Argentina, adamantly insisted that her company provides quality translation even if services can be offered at prices lower than those in the “first world.” Furthermore, in a recent email exchange, Irós pointed out that her costs are no lower than her colleagues’ around the world. “When we talk about the costs, we include hardware (everything is imported) and training, which if you go outside Argentina is usually very expensive for us, not to mention travel expenses compared to U.S. citizens (for ATA conferences, for instance) who can even deduct training expenses from their taxes.”

The appeal to quality standards and the offended protests echoed the views expressed in Kevin Fountoukidis’ article, That Dirty Little Four-Letter Word. Fountoukidis asserted that, in Eastern Europe, “you get what you pay for.” He also emphasized the relatively high overhead costs. “We all know that you can't get TRADOS or SDLX any cheaper in Poland or the Czech Republic. Every computer has to have an operating system and other basic software. The top staff needed to run a professional localization company doesn't come that cheaply either.”

Flatlanders All

In a recent edition of New York Times Magazine, Thomas Friedman shared his stunned realization that, thanks to globalization, the world is indeed flat. A quote from Infosys CEO Nandan Nilekani informs readers that circa 2000, the convergence of globalization and technological innovation “created a platform where intellectual work, intellectual capital, could be delivered from anywhere. It could be disaggregated, delivered, distributed, produced and put back together again — and this gave a whole new degree of freedom to the way we do work, especially work of an intellectual nature.” (Friedman, Thomas L., “It’s a Flat World, After All,” (New York Times Magazine, April 5, 2005), page 34. Translators note: the “we” cited by Nilekani would seem to be the imperial “we” since the “freedom” described does not seem to be one shared by all.)

One wonders at Friedman’s sense of wonder. Anyone in the translation biz could have clued him in some time ago.

In the same issue of the newspaper, an article describes looming labor shortages in China. Hard to believe? Well, yes, you have to read through it to understand what the article really decries a shortage of cheap labor. The last paragraph of the article paraphrases the concerns of Zhao Weinan, chief of a Taiwanese-owned manufacturers association in Guangdong: “And if wages keep rising, some companies could face a fate familiar to many manufacturers in the United States — they would have to move to a country with cheaper workers.” (Yardley, Jim and Barboza, David, “Help Wanted: China Finds Itself With a Labor Shortage,” (New York Times, April 5, 2005), page 4.)

If, as it would seem, what goes around in the manufacturing sector comes around in the intellectual services sector, then the translation industry will soon be engaged in a dehumanizing race for cheap labor. In fact, as Friedman suggests, the race is already on.

To address the rapid changes buffeting the language industry, globalization, that is globalization with a capital “G,” needs to make its way to the top of the agenda at language industry confabs and events. Only a serious and sustained examination of the impacts of globalization, including an honest discussion of pricing, will lead to serious and sustained initiatives to shape the future. The other option: translation agencies and translators will become the next big losers in a zero-sum game.

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Nancy A. Locke is a Canadian-based localization educator, speaker and freelance writer specializing in language matters. She can be reached at nancy_locke@sympatico.ca.