CWS 3.0: August 8, 2012

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Industry (Not) Lost in Translation

There are many small niches within the contingent workforce, but one that stands out as potentially important for corporate buyers is language services (contingent workers providing translation, interpreting and localization services).

For contingent workforce buyers, the relatively limited scope of spend may not make language services contingent work an area of high priority. However, monitoring the change and development in this area may be very instructive in understanding changing forms of contingent workforce supply in other, more prominent areas, such as software development and legal services.

Because the language services area of contingent workforce sourcing (traditionally largely a freelancer industry) is complex and rapidly changing, it should be of interest to industry professionals simply by virtue of its being a hot-house of accelerated development, possibly heralding what might come to pass in other contingent work areas.

Industry. Unless you are an international software developer or information content provider, your spend on language services may be a small portion of your total spend (total industry revenue is around $30 billion to $40 billion globally). But the industry is growing rapidly, at 10 percent to 20 percent annually, due to the globalization of commerce and the increasing amounts and types of information content that requires language translation (product and marketing info, websites and social media, apps, two-language interpreting — both in-country and cross-borders, etc.).

Few companies maintain internal, standing groups of translators or interpreters — most of this work is either contracted out to freelancers or outsourced to language service provider (LSP) agencies.

  • There are estimated to be hundreds of thousands of full- and part-time translation professionals globally — most of them freelancers.
  • The LSP industry consists of about 5,000 firms/agencies worldwide (one of the largest being publicly traded LionBridge, with about $400 million in annual revenue). The majority of these firms act like staffing agencies (managing contingent workers/freelancers), but the larger firms offer a range of services, including the outsourcing of projects, etc. (and in many cases, maintain permanent teams of professionals).*

Transformation. Besides its high growth, what is perhaps most remarkable about this industry is the extent and rate of its transformation, most of which is being driven by innovative technology adoption and reveals radical change in how work gets done and what it costs.

Technology is affecting the industry in several ways:

  • Over the past 10 to 15 years, translator-support technology tools have been increasing in use, making translators more productive.
  • In addition, over the past five to 10 years, something called machine translation has been coming into its own, offering automatic translation of limited electronic text (often for free); for example, Google Translate and Babelfish.
  • Also, over the past five to 10 years, e-platforms mediating and supporting online work have proliferated and grown up (including general freelance-support platforms, like oDesk and Elance, and platforms specialized in translation professionals/small agencies, like ProZ).

In the past five years, we have been seeing a convergence of all these trends and the emergence of (a) platforms that act like vendor managements systems (e.g., Cloudwords in the Saleforce.com ecosystem), (b) platforms that support crowdsourced translations (e.g., GetLocalization), and (c)platforms that offer all three of these options — human/professional translation, crowdsourced translation, and machine translation (e.g., Smartling).

While technology is playing more and more of a role in translation itself, it’s also changing the basic work models, including a phenomenal rise in crowdsourced translation services that is prompting new companies and traditional LSPs to enter this space (see Lionbridge’s new subsidiary SmartCloud). In language services, there seems to be a clear trend under way (especially for “knowledge work”) toward a kind of Talent-as-a-Service (TaaS) model in which contingent work/professional services, based on new technology and forms of organization, are delivered as a specific service (not a worker) in the development of some process outcome (e.g., a translation, a software program, a design spec or blueprint, a legal agreement, etc.).

Though small, the language services area of contingent workforce sourcing is complex and rapidly changing. Consequently, there may be a real opportunity here for industry professionals to use this industry transformation hot-house as a way to think about potential changes in other contingent work areas.

* Information drawn and synthesized from a range of industry sources, including Common Sense Advisory, various service and solution providers, et al.

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