The COVID-19 pandemic is one of these force majeure circumstances that are mentioned when concluding contracts, but fortunately happen very rarely in real life. Sadly, last year, we all experienced a real force majeure. The pandemic overwhelmed the world in its entirety, shocked everyone, and sometimes it even seemed that the world would not be the same again. However, we are returning to the way of life we were used to, step by step, even though a range of restrictions still applies. Humans tend to forget bad things quickly and mostly keep the good ones in their memory. It’s a great habit, but it’s also important to learn lessons from difficult situations. To do so, we have to analyze them.
In this article, we’ll discuss the impact of the COVID-19 pandemic on the translation and localization industry. Frankly, its influence is ambiguous, and it’s easy to explain that: translation companies work with organizations that belong to a vast range of industries, which in turn were impacted by the pandemic in different ways. For example, medical, pharmaceutic, e-learning and online commerce companies have been experiencing rapid growth since the beginning of the pandemic, while tourism, catering, dining, aviation, and many other companies have been facing dire recession. The position of a translation company in the market and its financial status changed depending on what pool of clients this company worked with.
It should be noted that the translation and localization industry remains rather fragmented, and the companies in it are quite multi-faceted and can provide a range of services that is broad, and even somewhat unusual for a linguistic business. Let’s take a look at the data published by Nimdzi research company. Most market players are still focusing on provision of “traditional” services, such as translation and localization (97.5% of companies), machine translation and postediting (71.5%) and subtitling (68.4%). Still, this does not prevent them from offering DTP and graphic design (61.4% of companies), copywriting, transcreation and content creation (58.2%) in the range of services they offer. These latter services may be considered somewhat innovative for a linguistic environment. The ambition to go beyond being a linguistic company has been somewhat provoked by the pandemic, and this trend is going to gain a foothold in the future. It’s truly important to persuade clients to trust companies that offer services “untypical” for a linguistic organization.
What about companies that are active in certain industries? According to Nimdzi, top 10 of such industries are as follows: technologies, IT and software (72% of companies), medicine, healthcare and pharmaceutics (67.7%), finances and law (66.5%), marketing (63.4%), education and e-learning (62.7%), manufacturing (61.5%), consumer goods (54.7%), media and entertainment (54.7%), automotive and aviation (52.8%), and the government sector (49.7%). It’s obvious that the translation and localization industry provides services to a large number of other industries, and that’s why its representatives are able to push through difficult times with help of competent strategical planning if they possess decent flexibility and varied experience. The pursuit of change and multiformity of industries that linguistic service providers work with is another consequence of the pandemic. However, companies with a distinct specialization are not going to go extinct. They just follow their strategy, and are in no way less (and often, even more) successful than their business rivals that follow a Jack-of-all-trades principle. We do not want to offend anyone by such comparison, each business model has its advantages and drawbacks.
Some companies go the way of mergers and acquisitions, which is a widespread trend in translation and localization industry. It persisted in 2020, as companies struggled to grow organically. This has been confirmed by Slator experts: growth is significantly fueled by mergers and acquisitions. According to results of a poll by Nimdzi, more than a half of respondents (52.2%) show their interest in mergers and acquisitions. Despite that, the industry remains fragmented due to low entry barriers for this market.
It’s worth mentioning some key trends of the industry: companies’ transformation from LSP (language service provider) to BPO (business process outsourcer); positioning as a strategic partner to global business; development of a powerful technological component; use of artificial intelligence; access to virtual space, such as popularization of online learning and e-commerce, telemedicine as a growth point, and development of video remote interpreting etc.
It is also worth noting that the pandemic acted as a catalyst for companies that expressed concerns about successful implementation of remote format of interaction with colleagues, clients and partners, as well as efficiency of use of digital marketing tools for the purpose of business promotion. For these companies, enforced egress from the comfort zone was a reason to reconsider such an attitude towards these occurrences in the business environment.
In general, the pandemic did not result in a declining situation in the industry: more than the half of interviewed companies registered growth. Nimdzi experts forecast that the industry size is to reach 73.6 billion dollars by 2025. Impressive numbers indeed! We hope that this forecast will prove true.
The pandemic has taught us important lessons: it’s necessary to always see new opportunities, be flexible, constantly learn new things, and embrace leading technologies and solutions. Companies that have learned this continue to grow successfully and open up new horizons.