February 2007
By Nancy A. Locke

Nancy A. Locke, based in Montreal, is a freelance writer, educator and public speaker specializing in language matters.


Translation industry Canada: Partnering to increase global competitiveness

In the global language industry, the visibility of a handful of high-profile full-service providers masks a fundamental characteristic of the sector: taken together, small- and medium-sized companies which rely on a large pool of freelancers dominate the market. Canada is no exception. In Canada, the fragmentation of language services supply is seen as a formidable challenge to the competitiveness of its providers. A national initiative to promote the domestic industry, which includes encouraging collaboration, may just have international appeal.

Despite a brisk and sometimes dizzying series of mergers and acquisitions, market fragmentation remains a defining characteristic of the language industry worldwide. An Allied Business Intelligence Report published in 2002 noted: “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 one percent of the market share.” In 2005, the independent research and consulting firm Common Sense Advisory identified 20 industry leaders worldwide who together still claim less than 20 percent of the market – leaving 80 percent to thousands of smaller companies.

Canadian studies with a more narrow national focus echo the global reports. In addition, they identify the dominance of small- and medium-sized companies of the domestic market as an obstacle to the national industry’s ability to compete effectively in the global market in which publicly-traded full-service providers are progressively gaining market share. Encouraging collaboration between smaller Canadian companies represents an important aspect of initiatives to promote the sector. While the focus of federal support in Canada remains national, collaboration and mutually beneficial partnerships have advantages that transcend borders.


Promoting collaboration

In Canada, an officially bilingual country, the federal government has always had a vested interest in the development and promotion of translation. In 2003, however, that interest took on a concrete form when, for the first time, the Action Plan for Official Languages included a section on the language industry and allocated 20 million Canadian Dollars over five years for its development and promotion. The Plan resulted in the establishment of the Association de l’industrie de la langue/Language Industry Association (AILIA). The association represents companies engaged in three specific language activities: translation, language training and language technology. AILIA currently has 142 members.

AILIA’s primary mission is to “promote and increase the competitiveness of the Canadian language industry nationally and internationally through advocacy, accreditation and information sharing.” The organization enumerates eleven specific objectives including two, which directly address collaboration:

  • Facilitate networking between the industry and other public and private sector partners
  • Support the emergence of alliances and projects to expand the industry

In a recent interview, AILIA’s president Johanne Boucher stressed the importance of the partnership model. “We want to be a conduit between two or three companies working together.” Ms. Boucher observed that while large contracts may be out of reach for individual small providers, a partnership between two or more smaller companies may well result in a successful bid. She noted that collaborations “don’t have to be a marriage for life,” but can be put in place on a project basis.

While partnering seems to make good sense, Ms. Boucher said smaller companies hesitate to enter into partnerships because they feel ill-equipped to structure such relationships in a mutually beneficial way. AILIA hopes to provide the training, tools and initial guidance necessary to develop profitable partnerships.


Increasing competitiveness with global partnerships

If partnering makes sense for small and medium Canadian companies, the approach also makes sense in a wider global context. Canadian studies point out strengths that might prove advantageous to small and medium companies who seek to enlarge their service by offering to include Canadian French and Canadian English and to expand their market penetration in North America.

For example, Canada’s official bilingualism has resulted in the emergence of a large and highly qualified pool of translator and managerial talent with depth of experience in a complex domestic market. Because Canadian companies already have developed solid relationships with local language resources, a company from outside Canada who partners with a local company will benefit from reduced costs associated with building a team remotely from the ground up and be ready to take on projects much more quickly.


Enforcing IT infrastructure

Canadian language companies benefit from the federal government’s early and significant commitment to information technology infrastructure. In fact, Canada is recognized as one of the most advanced countries in the world in terms of connectivity. While Canadian studies indicate that research and development of language technology has suffered from a lack of sustained and adequate funding, language professionals in Canada benefit from tools specifically developed for the French-English language pair. In addition, the Action Plan includes funding to boost language technology R&D. Innovative university curricula including translation tools laboratory courses have been integrated into translation training programs to ensure that graduates master the newest language technology.

Finally, currency exchange rates currently favor collaboration with Canadian companies.


Understanding the target markets

In the last fifteen years, a more sophisticated understanding of the complexity of cross-cultural communications has led to an understanding that translation represents only one part – albeit a significant part – of localized communications. Effective adaptation of communications to diverse and complex cultural, legal, political and social contexts requires an intimate understanding of target markets that goes well beyond purely linguistic issues.

Legislation governing language policy in Canada is very different from the European Union and elsewhere. In addition, differences between Canadian English and a “standard” international, British or U.S. English – and respectively the differences between Canadian French and the French used elsewhere – are subtle but sometimes significant. Thus, perhaps the most important advantage of collaboration is that companies from outside Canada can profit from their Canadian partners’ extensive knowledge of their particular cultural, reglementary and social environment thereby enjoying privileged and informed access to the North American and the larger NAFTA (North American Free Trade Agreement) market.


Implementing an effective growth strategy

In a competitive global economy, smaller companies worldwide are seeking to increase their service offerings in order to enlarge their market share. For ambitious small- and medium-sized translation companies an effective growth strategy means more than simply adding language pairs and hiring a sales rep in a handful of world capitals. In the short-term, partnering on a per project basis is a profitable solution for smaller players and their customers. A long-term collaboration, however, is a door that swings both ways and opens opportunities at home and abroad.