This is a guest post that is a detailed response by Luigi Muzii and is a clear rebuttal of my previous post on the Premium Translation market. While Luigi agrees that the translation market is made up of many smaller segments, he does not see enough evidence of a clearly discernible premium market. He admits that there are premium customers who are willing to pay higher prices he questions the long-term viability of a market that ALWAYS pays higher prices for translation when reasonable lower-cost alternatives are available.
Since Luigi took the trouble to document his criticisms into a complete post, I felt it deserved to be an independent post that furthers the dialogue on the subject, by presenting another opinion and hopefully attracts further conversation from those who see the issues most clearly.
We live today in a world where respectful dialogue is woefully inadequate, especially in national politics. While some of the comments might be seen as scathing, or overly negative, I find that his statement of his views (which I do not necessarily agree with) meets my standards for respectful professional discussion. Disagreements need to be forceful at times, and for this blog, I only expect that they do not become petty and personally disrespectful.
I also gathered that a primary motivation for his comments was his concern that premium market discussions would discourage both young translators who are just starting out and old-timers who might feel discouraged by choices they have made years ago.
There are, unfortunately, clear value associations in the very contrast created by the words "bulk" versus "premium". The value creation aspects are more opaque in this dichotomy, as I have seen large MT projects can create more value (in monetary terms) than the most expert translators can around a single project, and that there is a place for the whole spectrum of translation production possibilities that exist in the world today.
Thus, I maintain that for those with demonstrated competence and true subject matter expertise, a premium market does exist. This means that it is not just higher priced work, but also that the client to translator engagement is much more active, collaborative, and consultative.
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Do you know the way to El Dorado?
The fabled El Dorado of translation, the “premium market”, is to my mind much like a losing stream. Unfortunately for the many believers who still exist, there is no El Dorado. It is a legend, nothing more than a popular topic in blogs and at conferences. There is no proof of its existence because none of its fierce advocates have ever produced any, so there is no map or instructions to get there and no one is able or willing to provide any.
A few years ago, the news circulated frantically, without any confirmation from the said client, that Le Manoir de la Régate, a gastronomic restaurant in Nantes, had paid a notorious advocate of the mythical “premium market” € 800,00 for the translation of a “postcard”.
Lately, another example has been circulating, supposedly to put an end to any controversy about the existence of the so-called “premium market”.
Now, anyone who has worked in translation for a while knows that, for the job to be sustainable, a translation should not outperform the original (especially if this is already good), and that a professional translator producing superior texts from crap is not the reincarnation of Cagliostro, but a fool.
It may, of course, happen that the translator’s writing skills are such, that they easily outperform the original from the start, but in that case, the client is a fool, willing to pay more for a derivative work than for authoring. Provided, of course, that the translator is not so foolish or bashful as to accept to work for a pittance while being aware of their skills, the poor quality of the source text, and the intended use of the translation.
No top defense counsel is going to represent a pickpocket in court, just as no pickpocket is likely to have the means to hire a top defense counsel. Maybe because no defense counsel becomes the best in court overnight.
Similarly, a wicked lawyer may counsel a pickpocket and bill a fortune, just as a translator may charge an outrageous fee for translating a postcard. But, if this is true, this is rather a matter of professional ethics. Incidentally, counseling may not save the pickpocket, and the postcard may remain an isolated marketing attempt (the restaurant’s website above, for example, is still in French only).
Anyway, a customer looking for a translation to outperform the original has much more serious problems than finding a top (premium) translator. On the other hand, it is highly unlikely that the author of a legislative text, a patent application, an economic or financial report, or legal advice, would accept any comments, remarks, or writing directions from a translator, however capable. Unless, of course, the translator is also an equally capable lawyer, engineer, scientist, or economist.
Today, all published content is indeed global, and users can easily have it machine translated if they do not master the language(s) in which it needs to be available. On the other hand, in an ideal world, content would be designed and authored with translation in mind, the software would be perfectly internationalized and multimedia ready for multilingual subtitling. Only in an ideal world.
In the real world, translation is often unappreciated, most often seen as a necessary evil, and, as such, left for the end of the content production cycle, to be done cost-efficiently. So, a client who pays more than four times the market average for the translation of a standard text is a fool, all the more so if that translation is not worth the price differential.
Commoditization
The commoditization that has been affecting translation for some years now has the same effects that all commodities endure.
For example, deforestation and climate change are progressively and significantly reducing coffee crops and worsening the conditions of extreme poverty in which farmers are already living, although the coffee trade generates revenues of over US$ 100 billion per year, leading many farmers to leave. The increasing sales of fine varieties like kopi luwak will be of no help.
Just as the demand for coffee, the demand for translation is widespread and increasing; the global marketplace is crowded with price-sensitive buyers and there is little point now to bring about the issue of information asymmetry and signaling, which has been regularly dismissed for years as irrelevant.
Like for coffee and kopi luwak, there is no translation “premium market”: There may be a few “premium customers” that can, at most, and with much goodwill (from my side), represent a segment. And you should be accurate with your lexicon, especially if you are a linguist and you work for the banking and financial industry.
Another example could be a bespoke, hand-sewn three-piece men's suit from a luxury tailor shop in Savile Row, which does not necessarily make any of the tailors in the shop, and maybe not even the owner, a wealthy guy. Likewise, Brioni can provide a very demanding customer with a sartorial ready-to-wear suit while Marinella can still sell its famous handmade custom ties at any of its stores around the world.
In short, the bulk-premium dichotomy is not only simplistic, Manichaean, and capricious, it is mala fide and reflects ignorance and a profound lack of respect for all those who make a more than respectful living working with “bulk-market” customers.
Finally, bringing on the example of US defense contracts to support the existence of the premium translation market is pointless. In this case, translation jobs go to some professional services contracting company, which is part of some large conglomerate, as in the case of GLS and other regular military contractors.
If “premium” simply means that the word rate is higher, possibly a few isolated, individual translators and, most probably, some sub-contracting LSPs may earn better money than average, but this definitely does not make US defense contracts any kind of “premium market”.
In contrast, it is possible that other major institutional customers, e.g. the EU, push hard on translation prices when procuring for translations to compensate for the untenable stipends of their in-house translators, thus further contributing to commoditizing translation.
For all these reasons, should a “premium market” exist it would most probably be “fiercely guarded and (often) shrouded in secrecy to prevent additional competition”, and this would make it even harder to find and access it.
Venture Capital and Private Equity
The advocates of the so-called “premium market” have been using the interest that some private equity firms and, to a much lesser extent, a few venture-capital funds have recently shown in the translation industry to restate their arguments.
Others maintain that the Big Four accounting firms regularly approach translation boutique firms to explore potential opportunities.
Leaving aside for a moment the numerous and repeated criticisms made over the years to those Big Four firms, who figure prominently in corporate collusion allegations, and the suspicion of money laundering behind some PE transactions, recently some mid-to-high gross margin LSPs have caught the attention of PE firms because higher gross margins usually mean higher cash-flow margin to investors.
However, VC and PE firms are typically interested in short-term growth, possibly via M&A, but top growth rates are made up of, among other things, the pace of hiring, the complexity of services delivered, and the capital intensity of expansion, with respect to the market size, maturity, and competition, all things that are very hard to find in SME LSPs.
Indeed, the translation industry’s CAGR is often claimed to be steadily above the World’s GDP growth levels, following the explosion of content volume and expanded global trade. LSPs in the gaming and life sciences niches might in fact grow even faster, but PE firms usually expect to make a three-time cash-on-cash return or more on a five-years typical investment time horizon, and the expected IRR is 20-25 percent minimum. Objectively, these results are hard to achieve by investing in SMEs LSPs.
MERGE ET IMPERA
As a matter of fact, most of the people hailing the fabled “premium market” live and work outside it, and most probably do not know the path to it or the key to access it.
This, however, does not hold them from ranting against those who they believe, or maybe they just assume are the culprits, for the decadence of translation and the translation profession.
Indeed, PE firms targeting their investments in the translation industry cut freelancers out of the equation, and this gets things back to square one with the so-called “premium market”. However, the recent RWS’s takeover of SDL shows that domain expertise builds value, and this can be found not only in high-profile professionals. In this respect, back in 1993, AITI (the Italian Association of the Translation Industry) invited RWS to an international conference on translation quality assessment and report about being the first translation company certified to BS 5750, the predecessor of ISO 9002. The conference proceedings are available for download.
The fundamentalist fever against ‘corruption’ of translation also affects Academia. Actually, it started there and has always been spreading from there. Specifically, translation students are not taught to deal with the intricacies of the real market because most teachers have never translated a line in their lives. Preserving the status quo of the old curriculum, with the associated models, is a reason for the continuing survival of these attitudes.
So, a recent paper on the sustainability of the current models in the translation industry comes as no surprise, even if it comes from an otherwise seemingly innovative institution like DCU.
Sustainability is not a new topic and has often been associated with quality. Unfortunately, a major flaw in Joss Moorkens’s paper can be found right away. In actual fact, the working situation described in his paper is relatively recent and has not been “live for decades now”.
Moorkens’s paper presents the typical traits of confirmation bias, the same that can be found in most arguments from the advocates of the so-called “premium market”. Confirmation biases contribute to overconfidence in personal beliefs and can maintain or strengthen beliefs in the face of contrary evidence.
In fact, the paper does not substantiate or provide any actual evidence of the alleged widespread application to translation-work of Taylorism, which Moorkens also apparently confuses with Fordism. It may happen. However, the application of documented information as related to processes and workflows is the basis for quality management standards and even applies to the many, (somewhat poor), translation quality assurance standards. Even the existing translation quality assessment models, which come mostly from academics, are based–more or less knowingly–on “scientific management”. Finally, the standardization of production has allowed consumers to buy cars, and soldiers to be safer when using ammunition. See my further comments on the freely available A Contrarian’s View on Translation Standards.
Of course, the remuneration of translators is a critical issue, but M&A and PE firms have little to do with it. It is true, though, that remuneration has been decreasing for the last three decades due to the many technological innovations that have been introduced almost entirely from the outside into the translation industry. This is another interesting topic that academics seemingly prefer to ignore in their studies, possibly because it does not relate to their field of study and it doesn’t help to safeguard the status quo.
On the other hand, the issue of wage reduction has been at the heart of business associations’ propaganda for years, because it is easy, costs nothing, and avoids entrepreneurs from having to open their wallets to modernize production structures and processes.
Surprise, things are changing even in the temples of laissez-faire. For example, in The Economics of Belonging, the Financial Times’s European economics commentator Martin Sandbu argues that compressing labor costs reduces productivity, that higher labor costs push companies to move to more advanced production models, to make more investments, and that, as long as people are paid little, companies are settling on low value-added production. Likewise, in The Limits of the Market, Paul De Grauwe argues that if employers like to keep labor costs low, they will only succeed if they work to curb technological progress.
Wait a minute! Has this nothing to do with the Gresham’s Law? Maybe the advocates of the fabled “premium market” are short of updates in labor economics. And not just that.
However, if RWS’s takeover of SDL is good news for the translation industry as many seem to think, there will be less and less space for a “premium market”. The specialization required to become a skillful and well-paid translator with a lasting position at the high end of the translation market involves substantial commitment, time, and investment. Skills do not grow on trees or accumulate overnight; building a network of relations is toilsome; learning to exploit it may require some major changes in character, and no one can guarantee stable high prices and job satisfaction. Time is crucial unless your parents or your spouse can indefinitely pay for your continuing education while you are stuck in the “bulk market.” And possibly find you a permanent position in some financial or military institution.
Do advocates of the “premium market” ever tell this to their pupils willing to hear their fairy tales and feed their wishful thinking?
To be honest, in his paper, at least Joss Moorkens admits that “the hollowing out of the middle section of the market may make it more difficult to climb to the high end”.
Amen.
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.
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Post Script Addendum
I dug into the €800,00 postcard translation example given above and found out some facts on this that I think are worth sharing to give it an accurate context.
The example comes from Chris Durban who uses it as a teaching aid (shown above) in a classroom setting to explore and show different aspects of value-added translation work. It was done for an FDI client of hers whose primary focus was on texts that were intended to attract foreign investment into a region of France to increase employment. This client was sending a team to Davos, and the postcard was part of a press kit pointing to the quality of life characteristics of the region and was intended to attract investment, and expatriates to consider the region for new business initiatives. This was to be used at the WEF conference, where it would be compared to other premium marketing and communication messaging.
"My point with this exercise is generally to introduce (and raise awareness of) value pricing, expertise, context (purpose of the text, client's communication goal), and time factors."
It required the contribution of a specialist cookbook translator working together with Chris working within tight deadlines to make it work with the quality-of-life theme they were trying to promote in the press kit. The point of the example is to show how value is added when one looks beyond the words that need to be translated and focus on the broader intent of the communication, which typically requires more elaborate and knowledgeable integration procedures.
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