Observations on the Translation Industry

This is a guest post by a frequent contributor on this blog: Luigi Muzii. Here he shares observations on some key trends in the professional translation industry. His observations are presented as pieces of a jigsaw puzzle and readers can connect them or not as they wish. His opinions are his own, but I like to include them on this platform as they often ring true and show a keener sense of observation than we typically find in the localization media.

 He and I have both been saying for many years that disintermediation and disruption are coming to the industry, but we have yet to see a real fundamental change in the way things are done. This may be because the industry is highly fragmented and the inertia requires much more force to enable the needed structural change. There has been some change, but it has been slow and incremental. Or, quite possibly it may simply be that we are both wrong on this prediction of inevitable disruption.

After considering his observations here again, I think that it is perhaps, that the timing is hard to predict. MT has taken over a decade to even moderately penetrate the industry, and it is my opinion that it is still most often sub-optimally or wrongly used in the localization world. For real disintermediation to take place tools, processes, and solutions all have to evolve and align together in a meaningful way.  

Luigi often points to the practice of emphasizing the wrong aspects of the business challenges in the industry in many of his observations. This little clip makes this clear for those who still find his observations somewhat opaque.

“The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption.”

'Disruption' is, at its core, a really powerful idea. Everyone hijacks the idea to do whatever they want now. It's the same way people hijacked the word 'paradigm' to justify lame things they're trying to sell to mankind."

'Disruption' is, at its core, a really powerful idea. Everyone hijacks the idea to do whatever they want now. It's the same way people hijacked the word 'paradigm' to justify lame things they're trying to sell to mankind.
Read more at https://www.brainyquote.com/topics/disruption-quotes

'Disruption' is, at its core, a really powerful idea. Everyone hijacks the idea to do whatever they want now. It's the same way people hijacked the word 'paradigm' to justify lame things they're trying to sell to mankind.
Read more at https://www.brainyquote.com/topics/disruption-quotes

Clay Christensen

“Life’s too short to build something nobody wants.”

Ash Maurya

“If you always do what you always did, you will always get what you always got.”

Albert Einstein

In the last week or so, there has been much clamor about the "magical" and "astounding" GPT-3 capabilities that can "create" and generate text by drawing from a HUGE language model. More data equals better AI, right? They say that GPT-3 is different because it creates. GPT-3 is a text-generation API. You give it a topic, and it spits back a (hopefully) coherent passage. It learns over time, tracking not just what it thinks your topic is about, but how you talk about that topic. 

Some of the examples of GPT-3 intelligence being shared in the Twitterverse are truly remarkable, but while I am indeed impressed, I think we should also maintain some skepticism about this "breakthrough" until we better understand the limitations. I will not be surprised to see overenthusiastic feedback from the LSP industry just as we saw with NMT. This thread has some interesting discussion and varied viewpoints on GPT-3.   

My initial impression is that is indeed a great leap forward, but it has two very serious flaws that come immediately to mind:

1. It lacks common sense as does all deep learning based AI that I have seen,
   
2. It is unable to admit that it does not know.
   

However, GPT-3 already appears to have the potential to displace mediocre marketing content producers, just as MT displaced some mediocre or bad translators. As more competent people test it and play with it, we will uncover the problems it is best suited to address. I look forward to hearing more about the production use of the technology and real use cases.

The difference between stupidity and genius is that genius has its limits. 

Albert Einstein

========

A Jigsaw Puzzle

Over the last week or two, several topics have jumbled together in my mind. While they may seem unconnected, I do see a thread that binds them together. Commenting on each of these subjects separately would have meant breaking that thread, so they are presented together here as jigsaw tiles, that the reader may wish to combine to build an overall picture.

Ethnocentrism

Ethnocentrism is the original sin of globalization and one of the capital sins of internationalization. Most often, incorrect localization is like the fruit of the poisonous tree.

Writing full strings with as few variables as possible should be the most basic lesson in a Software Internationalization 101 course.

Context helps, syntactic gimmicks don’t.

Using an active voice is always better than using a passive one.

Gender issues should be left to localizers. Paying too much attention to use gender-neutral forms and words from strings (and content in general) won’t help translators do their job. On the contrary, they will make it harder, forcing translators to develop solutions that hardly sound as natural as the neutral English source material does. These translator modifications are not necessarily as neutral in another language, especially when an ending vowel can make a difference

Beyond being a silly stereotype, “thinking outside the binary box” to prevent using gendered language does not necessarily lead to effective communication.

Removing pork or cow meat from menus will not help per se increasing restaurant sales in Muslim or Hindu countries. However, redesigning the menu probably will. And this is a fundamental lesson in globalization 101.

All this reminds me of the launch of Windows 95 when you consider the initial localization attempts of the “Start” button and the sudden abandonment of the “Start Me Up” guitar chord as the accompanying jingle, which of course, makes much less sense in non-Anglo cultures.

Ethnocentrism could appear even in a theoretically unbiased approach to writing. Being a linguist does not necessarily mean that one is also open, inclusive, and global. The editor of a historically-popular trade magazine, who was also a translator, was also a prominent figure in the formation of the not so inclusive UKIP.

Inclusive language is something localizers and translators need no specific guide for. Sexist, racist, or otherwise biased, prejudiced language and ideas cannot be prevented from spreading, and translators have to deal with this daily. And they know how to cope with this phenomenon. Most importantly, they know how not to be influenced by this in doing their job. It’s called ethics.

It is wise, though, to request that vendors notify customers whenever they find language that isn’t inclusive, at least when inclusiveness is a pre-requisite. A customer’s task requirements guidelines should clarify whether a translator should keep the non-inclusive language intact — requirement specifications: such strange stuff.

Guidelines on using inclusive language may be useful for authors when machine translation is going to be involved. Much too often, people prefer to ignore that bias in AI and MT doesn’t come from algorithms, but from the people who developed the technology, and it reflects their values. Biased preference comes from training data even more than from input data. Training data are examples from which computers learn patterns and build predictive models. And this historical data is usually coming from real examples of human/social attitudes in the past.

Pandemic Crisis ‘Secondary’ Effects

The effects of the ongoing pandemic may have different readings — some of these readings concerns the broadening of the gig economy.

According to recent reports, the gig economy is taking over the enterprise. That more employees opt for a more flexible work structure may be one reading. Another one is that it is invaluable for organizations seeking to streamline and reduce costs.

Gig jobs are no longer limited to lower-paying work performed on-demand, and it seems that organizations have started taking advantage of more valuable employees. Gig jobs in the white-collar world has significantly increased in the past few years. 72 percent of all gig jobs worldwide between 2018 and 2019 were in large enterprise and professional services firms, and, according to Deloitte, gig workers in the US are going to triple to 42 million workers in 2020.

Quoting Gigster’s CEO Chris Keene, “Companies have always valued the ability to increase capacity without increasing costs.”

The impact of the gig economy on professionals that very few seem to see is that it exploits the demand for jobs to push remuneration lower and lower. No one pays attention to building a meritocracy: performance ratings and rankings are just truncheons.

What remains of the gig economy is a blessing for post-pandemic corporate recovery who can avoid hiring back thousands of full-time employees laid off or furloughed. Quoting Chris Keene again, “Coming out of this pandemic, there are a lot of jobs that people are not going to be able to come back to.” The pandemic crisis has had the gig economy jump a decade forward and pushed capitalism and its mission to a peak, i.e., increase profits and reduce costs to the maximum possible level.

This cost reduction focus is an unrelenting mission, as recent German slaughterhouse outbreak cases of the coronavirus showed. The specific impact of the cost-reduction focus, in this case, was to force close contact amongst workers in feverish working conditions needed to produce cheap meat. Of course, reports showed that otherwise despised migrants provided almost all the cheap labor. The German NGG union spoke of “shameful and inhumane conditions.”

The usual justification is that better working conditions involve higher prices. But are low prices really low? Higher prices always hide behind low prices.

Mainstream

Now that machine translation is finally mainstream [in the translation services industry,] nobody questions its use anymore. But still, the debate around MT use has taken on the same quagmire issues as those around localization translation in general. This means that, as Kirti Vashee, wittily notes, “the quality discussion remains muddy.”

Translation industry attention focuses mostly on edit distance, post-editing effort assessment, post-editing practices, and overall effectiveness measurement. Not surprisingly, discussions focus primarily, if not exclusively, on assessing the quality of machine translation output rather than on how to improve overall MT system capabilities, and shoddy tools like DQF receive all too much consideration.

Indeed, data and its understanding draw little or no interest, despite the clear enterprise market interest in an MT offering. This lack of focus is due not only to the fact that the LSP MT offering is not transparent, is unconvincing, and often poorly focused. Despite the interest of enterprise customers in MT, the relatively good performance of (almost) free online MT engines create a disincentive for LSPs to invest. LSPs are reluctant to explore a territory that seems outside their traditional scope of business and expertise.

Helping machine translation systems handle inclusive language is not just a matter of focus on training data, just as producing good content downstream is not just a matter of effective post-editing practices.

Preemptive quality assessment (or a priori risk assessment, as some call it) is only as effective as the training data is useful. Also, error detection and correction capabilities are crucial, at least as long as quality assessment still heavily depend on inspections.

Information asymmetry also applies to machine translation. Estimating risk only for the output without taking into account the source data, process conditions (especially buyer requirements), and the expected results do not raise high hopes per se. If you are unable to measure these three parameters according to consistent and parallel metrics and produce a weighted mean, you will face misleading estimates. Last but not least, insistence on segment-based rather than document-based analysis will not get you out of the narrow enclave in which the translation community has been basking for centuries.

Disintermediation Is Not A Vending Machine

And no ATM either.

At the WWDC 2020, Apple revealed that version 14 of iOS would come with a translation app specifically designed to translate conversations in 11 languages. An on-device mode will also be available to allow offline translations.

Should this be interpreted as another sign of the imminent end of the translation industry? The industry is most probably doomed, but its end is not set to come tomorrow.

The end of the industry will come from disintermediation. Some, including “yours truly,” have been writing (and talking) about this happening for a decade. Others are speaking more quietly about this more recently. More precisely, the usual suspects made some enthusiastic, although scanty, comments when Lionbridge launched its BPaaS platform, onDemand, five years ago or so.

Recently, though somewhat belatedly, SDL has struck back with its self-service, on-demand platform, SLATE.

Disintermediation is almost inexorable in the evolution of the global (digital) village, where intermediaries are generally seen as the villain. However, they are everywhere online, despite the common belief that they are not (e.g., Airbnb, Amazon, Booking.com, eBay, Expedia, Instacart, Uber, the food delivery companies, the app stores, just to name a few). Following the typical marketing model of rechristening old things by giving them glamorous or more palatable names, they are simply renamed as two-sided markets.

Incidentally, Lionbridge’s OnDemand was quickly, abruptly and mysteriously discontinued despite its boasted growth of 68 percent in one year with reportedly impressive scores of 99.8 percent on-time delivery rate, 99.4 percent revision-free project rate, and 99 percent of users satisfied or very satisfied (85 percent) with their customer care.

Lionbridge onDemand’s should have turned language services into items that could be bought through an e-catalog via a procure-to-pay system.

This “productization” approach involved standardizing options and making pricing instant. The idea behind it was to entice business stakeholders with 24/7 access, faster turnaround times and lower prices, while providing higher visibility into total-cost-per-output and rate-card negotiations, thus curbing the vendors’ role and their ability to add fees and lengthen lead times.

The pricing model was the traditional word rate model, while for its self-service platform, SDL offers a subscription model (SLA anyone?).

Today’s fundamental question is the same as then: Who and what are these platforms for?

As Semir Mehadžić brilliantly noted, beyond the aim of ‘cutting out the middleman’ childishly coming from typical middlemen, a BPaaS should come up with a better value proposition than the one currently used, i.e., “fewer clicks” and “avoiding the use of Google Translate.”

In the projected perspective, self-service translation platforms may entice consumers, but hardly any businesses.

The businesses such platforms can entice are typically new to translation and the translation industry, usually, companies entering international markets for the first time. Such companies generally go along a long and painful track of word of mouth and web search to find a vendor that suits their needs. Then inquiries and quotes follow, and leave the business managers puzzled and hesitant with their heads spinning and aching. The many quotes collected differ substantially from one another, and all look invariably too costly, mainly because the service offered is essentially the same.

Therefore, if the ideal recipient for a self-service platform is the consumer (e.g., Translated.net, One-Hour Translations, Lingo24, Gengo, tolingo, etc.), SDL’s offering, with its SLA-like model, is aiming at SME’s while saving on sales and account management costs. Probably because SMEs would typically not approach a large LSP since they presume that they would not find the same responsiveness, flexibility, and speed.

And this only happens if everything goes well because those SME managers described above might easily bump into an LSP salesperson who tries to educate the prospective customer about the intrinsic value of translation and the wonders of CATs and TMSs. Unfortunately, there is no inherent value in service offerings, only a perceived one, and while the prospect customer knows this, maybe the salesman does not. And the selling effort is thus burnt.

Therefore, self-service translation platforms might target the consumer market, where SMEs with occasional translation jobs can also be found. However, to reach the consumer market, substantial investments are required to be always on top of SERPs and get the necessary conversions. The future effect of these platforms may thus further accelerate commoditization of translation service businesses.

This unintended impact should be feared by self-service translation platforms in particular, as it would require that they will need to sell more and more translations just to stay even in revenue terms. The situation is similar to the dilemma of vending machine suppliers. They need to continuously sell more and more vending machines and find cheaper and cheaper products to include in them.

Anyway, all of these DIY instant translation platforms look like their designers know little about how the need for translation arises in business, and how translations are performed and delivered. More importantly, they look as if they don’t know - or even care - about customer satisfaction and how this is expressed and assessed.

It is my observation, that these allegedly “new offerings” are usually just a response to the same offering from competitors. They should not be equated to disintermediation and they often backfire, both in terms of business impact and brand image deterioration. They all seem to look like dubious, unsound initiatives instigated by Dilbert’s pointy-haired boss. And the Peter principle rules again here and should be considered together with Cipolla’s laws of stupidity, which state that a stupid person is more dangerous than a pillager and often does more damage to the general welfare of others.

Luigi Muzii has been in the "translation business" since 1982 and has been a business consultant since 2002, in the translation and localization industry through his firm . He focuses on helping customers choose and implement best-suited technologies and redesign their business processes for the greatest effectiveness of translation and localization related work.

This link provides access to his other blog posts.

Never Stop Bullshitting: Or Being Popular in the Translation Industry

This is a guest post by Luigi Muzii (and his unedited post title). Luigi likes to knock down false idols and speak plainly, sometimes with obscure (to most Americans anyway) Italian literary references. I would characterize this post as an opinion on the lack of honest self-assessment and self-review that pervades the industry (at all levels) and thus slows evolution and progress. Thus, we see that industry groups struggle to promote "the industry", but in fact, the industry is still one that "gets no respect" or is "misunderstood" as we hear at many industry forums.  While change can be uncomfortable, real evolution also results in a higher and better position for some in the internationalization and globalization arena. Efficiency is always valuable, even in the arts. In my view, the companies that solve the most challenging and interesting translation problems today (and thus earn the most money from translation related activity) are all VERY focused on efficiency, and interestingly are also not really part of  "the translation industry." These companies are in a different league, in terms of scale and process efficiency and I think could pave the way in providing a vision for real change in how things are done in "the industry". The old process models are not sustainable for anything but the most important and critical content. From my vantage point, most of the content that is the primary focus of  "the industry" is not really important or critical. Simpler, faster and more efficient translation (cheaper) production really does matter to both the existing and emerging customer base

I came to the "translation industry"  from the IT industry, specifically, the storage virtualization and applications software development sectors. I recall that I was surprised by several things I saw when I first arrived to "the industry", and I am sure this is not unlike what many brand new translation buyers might also experience. My key observations when I had a fresh mind include:

1. The degree of fragmentation in the translation industry which hampers movement towards more efficient production processes,
2. How archaic and dated the most popular translation technology was, especially TM (1990's technology that was really the only automation technology in widespread use),
3. The number of LSPs who still kept building (sub-optimal, klunky) "custom" TMS and Project Management systems, when perfectly workable, more robust options were available,
4.  The hostility and ignorance regarding MT technology and it's potential and proper use cases,
5. How labor-intensive, slow, reactive and inefficient production processes were in general.

This, I suspect is what many others feel if they come from other industries where efficient production processes are much more deeply established and understood. Not that much has really changed in 10 years, though now you see a proliferation of really bad, self-built MT systems, and fortunately, most have given up on building that magical TMS, that is allegedly waaaaay better than anything yet known to man. Maybe MT will also reach the point where most users realize that it is an undertaking best left to experts, especially in these NMT days, where new developments and techniques are occurring every week.

There are going to be many more "buyers" and new customers entering the market for translation services in future, and we probably do need to move beyond the insubstantial fluff that pervades "the industry".  Potential customers who understand your product and service are more likely to buy quickly, than those who need to learn and decipher what your special obfuscating in-group language and terminology actually means.

Frankfurt (referenced below) determines that bullshit is speech intended to persuade, without regard for truth. The liar cares about the truth and attempts to hide it; the bullshitter doesn't care if what they say is true or false, but rather only cares whether or not their listener is persuaded.

For those who are offended by the term bullshit, let me share these alternatives and feel free to substitute these terms wherever you see the offending word. In the British Parliament, you are not allowed to call a member a liar as this ‘unparliamentary language’ brings dishonor to the house. As a result, various euphemistic phrases are used to indicate ‘bullshit’:

• Winston Churchill in 1906 used the term ‘'terminological inexactitude’;
• more popular recently has been the phrase ‘economical with the truth'. This was originally coined by Edmund Burke referring to measured speech, but has come to mean ‘liar’ in parliament or court

Bullshit Innovation - Graphical View

The emphasis and italics comments in [  ] below are mine.

-------------------

Never tell a lie when you can bullshit your way through.
Eric Ambler

 

According to Evgeny Morozov, bullshit is the new oil, everything derives from that. Many years earlier, Harry Frankfurt opened his best-selling essay with “One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share.”

It is worrisome that most people are rather confident of their ability to recognize bullshit and to avoid being taken in by it. As Frankfurt noticed, the bullshitter is, by his very nature, a mindless slob. And a presumptuous snob, too. The bullshitter’s arguments and use of language are both meant to support a kind of bluff or be a misrepresentation or deception. Indeed, his ultimate goal is to convey a plain falsehood. Marketing is the typical realm for bullshitters. Not surprisingly, storytelling is the new black in written communication.

Unfortunately, marketing, especially social media marketing, as it’s virtually free, is the new mantra of "translation industry" people.

Whether he/she is a translator, an LSP, or an advisor, a bullshitter is always there, mouth breathing, his/her words like mere vapor.

Invariably, bullshitting in the translation industry revolves around three subjects: Innovation, Technology, and Quality. They may be presented differently, but they are always interconnected. Invariably, the most active bullshitters are always the very same people. They champion innovation, without having introduced any, ever; they champion technology, especially when related to automation, without having automated anything, unless, sometimes, forced by customers; or they provide premium quality, only work for premium customers, receive premium fees, even though they won’t substantiate any of their statements.

The Quality Myth

When the bullshitters are LSPs, they are obviously always technology-savvy, localization technology developers, and positive users of the most amazing KPIs—which they always forget to enumerate. They consistently boast of having (unmistakably) seasoned linguists and localization and globalization experts in their (unquestionably) great teams, known for — guess — outstanding quality of delivery and service, and famous for their technical and technological capabilities. More and more often, the icing on the cake is a set of wonderful tools available for free.

When the bullshitters are translators, the mantra becomes perfect, absolute quality. The bravest bullshitters venture intrepidly into dispensing with hands full, their futile directions to navigate out of the wild and stormy bulk market, up to the bright and warm oasis of the premium market, a mirage if not a hoax as most believers would discover at their own expense. Indeed, if there ever were a premium market, it would most likely be a small segment of a bigger market, otherwise, it would be so large as to welcome everyone, and it wouldn’t be premium anymore. There are certainly premium clients, but everyone can tell, they are hard to reach, win, and retain. To penetrate the fabulous ‘premium market’, bullshitters all have the same strategy and advice for peers and newcomers: specialize, brand and market yourself, raise your rates, educate your prospects and customers. However trivial, it is worth reminding readers, that studying (to specialize) and networking (for branding and marketing) are costly activities that consume time and incorporate the work of others, although their costs might be indirect, hidden, postponed, redistributed, or transferred elsewhere. Not surprisingly, these bullshitters never produce a single piece of evidence of the effectiveness of their advice, and never talk about how much money they get from implementing the strategies they advocate, or where their money comes from.

When the bullshitters are advisors, their landmarks are faddy and fancy words and phrases like simship, continuous delivery, KPIs, agile, lights-out project management, augmented translation, and the inexorable big data and disruption. And if you manage to use blockchain and smart contract in the same paragraph, then you’ve really authored a masterpiece. That’s marketing, baby. Marketing! And there’s nothing you can do about it. Nothing! It’s a basic truth of the human condition that everybody lies. The only variable is about what. And you don’t need to be Seth Stephens-Davidowitz to know. On the other hand, why lie when storytelling can be equally effective?

The Innovation Myth

Even innovation is a casualty of this mouth-breathing hype. Bullshitters from all categories battle on the innovation field. Although the translation industry has not seen real innovation coming from its players for years, they have always been talking grandly as they were competing for ranting the loudest and shooting further. Indeed, the translation industry is overcrowded with futurists, visionaries, and wishful thinkers, with the latter being largely more numerous. They can all be found in any localization conference around the world. The narrative/storytelling frenzy virtually affects every LSP. Every LSP has a brilliant ambitious idea, an innovative process or some new technology that is going to disrupt or revolutionize the industry. And this does not happen just once in a year but happens recurrently, whatever the event. To quote Renato Beninatto and Tucker Johnson from their recent feat, “the language services industry has proven itself to be horribly equipped to actually innovate in any meaningful way.” This deluge of bombastic bullshit is nothing but the effect of a self-breeding epidemic of ‘delusions of grandeur.’ In fact, most LSPs do not have the spirit, the capability and the resources to innovate, they simply cannot afford it, let alone become the driving force for innovation. The bigger they are, and the more they are focused on basic financial indicators, making profits, and possibly growing their business, the more unresponsive they are to invest in innovation.

Unfortunately, as Beninatto and Johnson say, “critical thinking and skepticism are often thrown out the window in favor of recycled ‘headlines’ and flattering commentary.” In fact, there are no contrarians in this industry, though one may just occasionally stumble into a talking cricket.

This is a reason for not discrediting the unreliable surveys that have been circulated to constantly feed ourselves with a reassuring echo and lead people in the industry to believe everything they hear.

However, when you need the hype, it usually means you’re in trouble. Once the hype starts, it often continues on and on, and the longer the hype is sustained, the bigger the problem, and capturing the attention of the random public is not the same as revolutionizing an industry or a market.

Hype does not affect technology only; it also affects market analyses, branding, sales, and marketing policies. The essence of marketing is about narrowing the focus. Too many in the translation industry translate this fundamental principle in a self-defeating approach, using quality as a magic wand. No wonder if it works no wizardry. “Focus on the high end of the market!”, the (in)famous premium segment as if anyone is interested in the low end, where the emphasis is on price only. “Raise your rate, quality is worth a higher price!” The problem is that since no one proclaims themselves as the “un-quality” [or bulk market] player, everybody stands for quality, and as a result, nobody does. You cannot narrow the focus with quality or any other idea that doesn’t have proponents for the opposite point of view. Especially if “quality” is the only way to prove you are better than your competitors.

The "Educate The Customer" Myth

Most people want to believe they can get to the top by being better than others, but actually, the best way to do this, if not the only way to get there is by being first. It is the first one of the 22 immutable laws of marketing enumerated and illustrated by Al Riesand and Jack Trout in their 1993 book. Riesand & Trout also wrote that many people believe that the basic issue in marketing is convincing prospects that you have a better product or service, despite this, people tend to stick with what they have already got. It is a common belief among industry players that educating the client is an absolute necessity when, on the other hand, the idea is equally widespread that salespeople fail because they don’t understand the customer needs, as they are better trained on LSP processes, rather than on client issues. In fact, most LSPs are still in the nuance-specifics-of-translation-industry state of mind, and simply dismiss people who are not from the translation industry as to those who need to be ‘educated.’

Educating customers is not a cost-effective marketing strategy for most small businesses like LSP’s, especially towards first-time buyers who probably don't know very much about translation. Translation industry players who may be tempted to approach their customers this way possibly do this from an illusory sense of superiority. They offer their products/services (solution) to people who don’t recognize that they have a demand (problem) and assume the client has a sort of functional illiteracy. They presume the client has an interest in features rather than in benefits, and thus fail to understand and quantify the client’s needs, thus showing their ignorance and lack of interest in their customer’s business.

Rarely are customers willing to be instructed by someone who does not belong to the same class of business, especially if they understand the issue behind their demand and are searching for answers. On the contrary, the “I have no questions” attitude is fairly common in customers who are not concerned in disentangling the intricacies of an extraneous and unimportant business. So, what word should a translation business own in the minds of prospects? Tip: customers want to see instant results.

All this to say that educating the client is bullshit too.

The Growth Myth

But how is bullshitting affecting market analyses? In the way, the industry news is presented.

According to Aiman Copty, Vice President of International Product Solutions for Oracle Corporation, since translation is now increasingly at a general utility stage, “people should not need to think about it,” and “the industry is rich with translation and subject matter expertise,” the keyword is no longer cost or quality, but efficiency. According to “captain of the translation industry” Adolfo Hernandez, “localization is far too labor-intensive” and “for the foreseeable future, the best results in localization will come from the best humans using the best machines.” Luckily, SDL is creating ‘islands of stability’, whatever that means. Another captain, Rory Cowan, invites readers to observe patterns across other industries and get the pace right. No matter if the financial results of his company in two decades could hardly be labeled as astonishing in spite of “the growing opportunity” H.I.G. Capital is supposed to have seen, according to Lionbridge’s chief sales officer Paula Shannon “in the company’s business and the value in the long-term relationships that Lionbridge has with customers in verticals such as IT and financial services”. Smith Yewell, founder, and CEO of Welocalize is strongly convinced that the value-add won’t definitely be in technology but in the strength of the service.

What bright future translation and translators have ahead! And forget about the Bodo Dilemma.[ an abundance of tools, technology, data and innovative solutions combined with a painstaking shortage of human talent to properly deploy them. ]

This is just a part of the problem. Another major issue comes from how numerical data on the industry are presented.

For example, the growth of the translation industry over the last decade or more is usually presented as linear, steady and unceasing, but it is expressed with revenues only. If the same trend is displayed on a combined graph together with percentages, things look a little bit different.

If profits or volumes are taken into account, things might be even less exciting. In fact, while volumes have been possibly—undoubtedly if we should trust the same sources—growing as much as revenues—indeed they should have been much higher according to the same sources—we might discover that profits have not been growing at the same pace. Any real industry ‘veteran’ with a ungarbled memory can tell that, in the last twenty-five years, prices have been undergoing an increasing pressure and compensations, at best, have remained unchanged, i.e. in real terms they have halved. On the contrary, it does not take a genius to figure out that, over the same period, IT has made volumes increase by at least a 10x factor while productivity has, at most, tripled. In other words, revenues are not the best metric to measure growth. Also, the translation industry is notoriously made up of very ‘light’ players, who rely almost exclusively on outsourcing. Therefore, even the average revenue per employee and the average revenue per salesperson are not reliable metrics. A volumes/revenue ratio would be more suitable, but the two figures might be very hard to get from players (remember, everybody, lies.) EBITDA (i.e. earnings before interest, taxes, depreciation, and amortization) might be a good metric to evaluate profitability, even though it has its drawbacks too. In fact, it is often used as an accounting gimmick to dress up a company’s earnings. More properly, it is good to meet the original purpose to indicate the ability of a company to service debt.

The noise around the recent acquisitions or the interest in a few translation businesses by some private equity firms is just more wood for the hype fire.

The recent deal for the acquisition of Moravia by RWS is a purely industrial (i.e. not just financial) transaction. Incidentally, Moravia has been entirely held by a private equity since 2015. Clarion Capital Partners sold Moravia to RWS for twice the company’s revenues, 11.8 times the 2016 EBITDA. H.I.G. bought Lionbridge for a fraction (64%) of the company’s revenues. RWS acquisition of Moravia will be a typical LBO, through a combination of equity (60%) and debt (40%.) RWS exposure is therefore expected to be substantial (roughly USD 400 million in total) corresponding to the combined pro-forma annual revenues.

After a bitter—to say the least—three-year war to win control of the company, the forced sale of TransPerfect might hardly be anywhere near to the projected USD 1B.

In essence, organic growth in the translation industry has long been left to small businesses. Even medium-size businesses are now relying on M&A to expand. See Arancho Doc’s M&A history with the acquisition of the fellow Italian, 40-year-old LSP Soget in April to be subsequently acquired by Technicis.

Technology is not the primary interest of private equity funds looking for investments, nor is it the service, however profitable. In an industry where growth increasingly happens through M&A, mid- and large-sized translation businesses are easy preys and vehicles for easy money. Also, the size of translation companies is considerably lower than that of other companies with comparable performance in other industries and this makes them even more appealing.

Why the hullabaloo, then, around the alleged interest of private equity funds for translation businesses? What do you expect from an intelligence channel with a boasted base of a few thousand readers releasing the results of casual surveys run through its main outlet with a rate of response of 0.9%? Tertium non datur: either the released news is just gossip, or industry players are dancing on the Titanic.

Chasing the hype ends up with us getting lost. In 2016, the eight fastest growing industries to invest in were 3-D printing, drones, marijuana, virtual reality, AI, food e-commerce, wind energy, and green building. In 2017, they grew to eleven, virtual reality, video games, elderly health care services, physical therapy, translation and interpretation services, biotechnology, VoIP, drones, green energy, water and water treatment, and marijuana.

Maybe marijuana is the one secure investment, judging by certain analyzes and those who support them. Incidentally, BLS expects a 29 percent increase in the number of jobs in the translation and interpretation service industry by 2024.

After The No Asshole Rule and The Asshole Survival Guide, do we need a No Bullshit Rule or a Bullshit Survival Guide?

A Bullshit Process Graphic

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Luigi Muzii has been in the "translation business" since 1982 and has been a business consultant since 2002, in the translation and localization industry through his firm. He focuses on helping customers choose and implement best-suited technologies and redesign their business processes for the greatest effectiveness of translation and localization related work.

This link provides access to his other blog posts.