Act 1: The Snapshot

We begin with our feet firmly planted in the present and reflect on where the language services industry currently stands (spoiler: there’s no way to avoid this thing called GenAI).

But do we understand where we are and where we are headed? Are we asking the right questions, or should we just start with the “Why”? 

There is a sense of urgency that powers the varied market players. We explore new pathways, test new solutions, learn from the mistakes made along the way, course-correct, and start again.

The industry is evolving, and we are in motion. In the following pages, we examine what this movement looks like. 

Peter Coleman

Senior Research Analyst at CSA Research

Peter Coleman is a senior research analyst at CSA Research with over 20 years of experience developing and managing language services programs, content management systems, and digital asset management solutions for global enterprises.

“Redefinition vs. stagnation: Where are we, as an industry?”

In considering this question, I reflected on an amazing creature — the emu. Why an emu? Well, once you read about them, you realize they are truly the epitome of adaptation and survival. Not only did this fantastical creature somehow grow out from under the mass extinction that took the dinosaur away, but they also survived the Great Emu War of 1932 — a war that had three onslaughts, all of which the emu managed to emerge from victorious. So, when the question of stagnation or redefinition was posed to CSA Research, we didn’t think either was the answer. We believe rapid evolution is the only real option here. CSA Research has talked of the evolution, the stages, as well as the need for it for years.

A long time ago, someone said jump, and LSPs said, “How high?” This industry was born, in large part, from an afterthought of globalization. The United States was one of the key drivers of globalization and the multinational brands we have today. The United States is also the least likely to understand the need to read and connect in languages beyond English (it did, after all, just declare English as the official language in the U.S., despite being a country of immigrants). So, in turn, U.S. enterprises found themselves needing to communicate in languages they didn’t care to consider, but which were also necessary for both selling to customers overseas and for regulatory compliance.

LSPs all signed up to have a piece of the massive pie on the table. Cost and technology could be figured out later, but at the time, it was a feast. LSPs took on the complexity of separating content from file structures, rebuilding it all again, and storing their work in translation memories. Scale was managed by tapping into tiers of vendors — it was the only scalable way to keep up with demand. No one considered the value of the complexity or the cost of capacity that could scale up and down based on the client’s demand. At the end of the day, the only thing that mattered to the client was the cost-per-word, a quality score, and the time needed to turn around a project.

Then came the technology that put its foot on the pedal of “faster” and “good enough.” Neural MT (NMT) hit the gas in 2016. It was a double-edged sword. Savvy loc programs started demanding it to drive down cost-per-word and ramp up capacity. LSPs used it, sometimes without clients knowing, to keep margins healthy. And then, just as LSPs were getting NMT integrated, LLMs led enterprise managers to ask, “Do you really need an LSP?”

The same familiar question and pattern has been answered. Traditional translation and localization — let alone interpreting — aren’t things most multinational corporations want to pay for. They are an expense, no different than a lease or electricity. The reason? Because no one has demonstrated the VALUE of language when it comes to creating trust, clarity, emotional resonance, relevance, and most importantly, the connection with a brand. The industry only said, “Yes, we can translate that for pennies on the dollar.” It has never said, “Here’s what we can really do with language… here’s the real value of language.”

Others who study this industry want to ignore the reality of the cost-per-word race and relabel the traditional LSP work as something it’s not; renaming a function doesn’t change the function. 

Now, more than ever, LSPs recognize the need to move past service offerings and into return on investment (ROI)-based solutions. LSPs are better positioned than anyone to do this. 

They know the true value of connection through language and culture, and many are beginning their journey to becoming a true global content solutions provider (GCSP). The challenge will be demonstrating to multinational corporations that the true value of multilingual content is well beyond the cost-per-word schema purchased today.

The level of disruption that’s here now has come harder and faster than anything I’ve seen in the twenty years I’ve been in this space. However, I have also seen the resilience and tenacity of those who continue to deliver on unrelenting demands. And they will adapt and evolve. Some will be able to remain, and even thrive, as an LSP by becoming a specialist in a domain or vertical. They will be able to provide something NMT or AI cannot yet replicate. Others will move past those services and into new spaces. They will create new solutions that deliver value well beyond how many words, and how much savings can be had, in a translation memory. They will focus on factors such as engagement with new demographics, conversion rates, brand loyalty, reduction in support costs, and increased customer satisfaction. If they can do so, they can evolve into something as resilient as a flightless bird that refused to be defeated by an army.

Read the full 132-page Global Ambitions: (R)Evolution in Motion publication featuring vital perspectives from 31 industry leaders on the ongoing AI-spurred (r)evolution.

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