Global Content Drives a US$46.52 Billion Market
In January, the World Bank observed that, "for the first time since the global financial crisis, all major regions of the world are experiencing an uptick in economic growth." CSA Research's 14th annual study of the language services and technology market demonstrated that the language sector has benefited from that good fortune. It grew at 7.99% over the past year to reach a projected US$46.52 billion in revenue for 2018. Read about our survey and research process here.
As they have for the past few years, successful language service providers have focused on becoming more efficient, creating innovative processes and services, and embraced new technologies such as artificial intelligence and neural machine translation to streamline operations. Besides these functional improvements, the industry itself has continued consolidating through horizontal mergers that combine companies competing in the same space and vertical mergers between companies operating at different points in the supply chain.
Meanwhile, demand has continued growing for language services, both on traditional platforms and for mobile, spoken, Internet of Things (IoT), and over-the-top (OTT) content. As enterprises around the world continue their digital transformation, many have begun to realize the growing value of their content once it leaves the siloes for which it was originally created and can be adapted for use in many more situations and locales.
How have these dynamics affected the market for outsourced language services and technology? CSA Research just produced comprehensive primary research of the sector, this year published as "The Language Services Market: 2018," "Who's Who in Language Services and Technology: 2018 Rankings," and "The Language Services Market: Research Methodology 2018." We complemented the rankings with a spreadsheet of the ranked companies, "2018 Data on 195 Top LSPs" with 2016 and 2017 revenue data in local and U.S.currencies, by number of full-time employees, by status, regions, country, and number of offices. Upcoming reports will update our Data Visualizations series and data highlights with 2018 survey data.
What else did we find in our 2018 research?
- The market grew more strongly than in the past few years. The sector will turn over US$46.52 billion in 2018, with a growth rate of 7.99% over the previous year. Revenue grew for all major language services.
- Activity among the Top 100 LSPs™ highlights a dynamic and changing market.TransPerfect dislodged Lionbridge from the #1 spot it has occupied for the last five years. Other of the 10 largest companies shuffled positions, with acquisitions driving RWS into the number four slot and Keywords to number 10. Three ties led to 103 companies qualifying for our annual list of the 100 largest, while 195 overall appeared on our eight regional lists. Ranked companies can display a badge indicating their achievement.
- The biggest companies grew the most. As a group, the Top 100 LSPs grew an average of 16.86%, doubling the industry-wide increase of 7.99%. But when we separate out various tranches in our rankings, we see a broad performance spectrum. The 195 largest LSPs in our global and regional rankings grew at a rate of 16.71% over the preceding year. But the 10 biggest LSPs outpaced the industry average with 20.30% growth. The 51st to 100th LSPs in the Top 100 LSPs™ grew at a lower but still extraordinary rate of 12.33% while the next 95 regionally ranked companies increased their revenue by 13.85%.
- Smaller firms dominate the market and generate most of the revenue. The 195 largest LSPs account for 13.88% of industry revenue. The balance comes from the tens of thousands of smaller suppliers. Two-thirds (76.98%) of our database of 18,000-plus LSPs employ 10 or fewer people but are subject to the same challenges and market forces as the larger companies – and also claim many of their capabilities but delivered on a smaller, more personal scale. Many cooperate with each other and with the larger firms – even among the 195 ranked companies, we found an average of 25% of their sales were to other LSPs. Our market sizing algorithm accounts for this factor, thus avoiding double-counted revenue. Finally, we recognize the contribution of freelancers to the supply of language services, but research them differently than LSPs (click here if you'd like to participate in a future survey of freelancers).
The Language Services Market and Who's Who Ranking reports complement these datapoints with analysis and insight on the market, 38 tables and 22 figures providing details on projected growth rates, global and regional breakdowns, the shape and size of the language services supply chain, the size of the market for individual language services and software, the impact of foreign exchange rates, and, of course, the rankings.
In our analysis of this dataset and primary research from our other research projects, we identified continuing efforts by the most ambitious LSPs to differentiate their offerings. They are branching out beyond language services to address the global content, marketing, and operational functions of enterprises. The "what's next?" chapter of this research lays out the challenge for language service providers to re-think their brand and value propositions. We contend that the providers who thrive will be the ones that can adapt to the volumes, timetables, budgets, expectations of quality and appropriateness, and – most importantly – client business needs that extend beyond plain old language services like translation and interpreting to meet the challenging business requirements of their customers' global digital transformations (GDX).
In this research, CSA Research reiterates the challenges we laid down in last year's research to help enterprises manage the complexity of content use and adaptation across its life cycle, from source to all its target permutations. The report describing the emerging role of ambitious LSPs as helpmates for digital transformation and as global content service providers is available as part of a research membership.
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