The reaction of the market of translation services to the outbreak of the coronavirus and the lockdown followed it was predictable: the industry is experiencing hard times. Previously, we have already shared with you the results of the surveys made in March and May this year. The surveys evidence the same thing: most CEOs of major language service companies of the world assess the current situation as negative in terms of the business perspectives.
In July this year, one more survey was arranged in which 118 leading players in the world market of translation services, including TechInput, participated. Most respondents (55%) noted that COVID-19 resulted in a sharp decline in demand in the industry. Nevertheless, 20% of survey participants are optimistic and mention an increase in the demand for translation services. For the sake of fairness, it is worth noting positive dynamics in the expectations of suppliers of linguistic services after all. Thus, as early as in May this year, 66% of respondents talked about a decline in the demand after the lockdown imposed due to the coronavirus pandemic.
Future of the Market of Translation Services Outlook
The survey found that 56% of respondents expect that the impact of the pandemic on the market of translation services and technologies is temporary. However, 41% of the industry leaders are not sure about the stability of the current market balance and expect the recession until 2022. The financial position of the companies aggravates the general situation. For instance, the general contribution margin ratio in the industry has dropped by 7.5% (for the period from January to June 2020) as compared to the similar period of the previous year. Most interviewed representatives of language service companies note that the pandemic enhanced the deglobalization and may cause major obstacles for the future economic growth in the service industry. In this connection, respondents to the survey raise their concern about the uncertainty related to the pandemic duration and the world economic situation in general.
Niche Markets, or Economic “Advantages” of the Pandemic
It should be noted, however, that the lockdown had a disproportionate impact on the market of translation services. Some translation companies got more clients needing the solution of their problems and coverage of news connected with the pandemic, whereas the others, on the contrary, had to significantly cut their corporate budgets. The results of the survey mention, as an example, the following niche markets which demonstrated the enhanced demand for linguistic services during the spread of the coronavirus infection: health care sector (the demand in this sector grew by 64%); pharmaceutical market (59%); IT (40%); public administration (38%); television and radio broadcasting (35%). Translation companies offering services to customers from the said industries could benefit from the economic impact the pandemic had on business development.
Most Affected Niche Markets
The survey results demonstrate the key changes in the demand in the market of translation services and technologies which occurred in the first half of 2020. CEOs of language service companies have indicated the industries which significantly decreased the consumption of linguistic services. They include the travel industry (decline in demand by 88%); entertainment industry (87%); air transport (73%) and other sectors connected with freight traffic. Linguistic companies servicing the said industries significantly suffered from a sharp decline in demand.
Remote Working: Unattainable Luxury or New Reality
The World Health Organization recognized the spread of COVID-19 as a pandemic; the virus has already affected the work arrangements in all the countries of the world. Big companies still apply quarantine measures in their subdivisions and suppliers of linguistic services are no exception. Thus, the survey found that during the lockdown period employees of most interviewed companies switched to remote working (77%). As of the moment of the current survey, the leaders of the translation industry reported that some staff still worked from home (35%); in addition, 57% of respondents noted that they intended to keep working remotely even after the end of the pandemic. The reason of such decision of managers of translation companies is the reduction of the occupied floor space of offices (40% of respondents supported such intention) as well as a potential staff reduction caused by a negative change in the volume of sales (55% of respondents declared the decrease in the production efficiency).
Digitalization as a Competitive Advantage of Companies
During the survey, respondents were asked how well they were prepared for the unexpected coronavirus pandemic and whether the executives of language service companies were ready to apply digital technologies in their future work. Most respondents noted that they were fully ready to face “the new reality” and to work under new conditions thanks to modern business technologies. Moreover, representatives of the translation industry were equally of the opinion that they would keep using the state-of-the-art management tools: digital marketing, online sales, systems for management and monitoring of virtual accounts and operations related thereto.
Finally, we shall note that the unexpected pandemic of the coronavirus infection took aback the whole world economy. Certainly, the effect of COVID-19 on the translation industry and the adjacent sectors is tremendous, however, for the moment it is not so critical. The situation may change for the better, however, this will require concurrent actions from leaders of major national linguistic companies to maintain a balance between the demand and the supply on the market and to fix fair prices for services rendered. Our stories will keep you updated about the latest news and research in the market of linguistic services and technologies.