How Could UK Exporters Improve their Trade in Non-English Speaking Markets?

Transcription

1 How Could UK Exporters Improve their Trade in Non-English Speaking Markets? What Lessons can be learned from Successful Companies? Professor Stephen Hagen 21 May

2 The Issues How is globalisation impacting on the different languages spoken round the world. And what changes can we expect to see over the next half century? How are companies in the UK and the wider Europe coping with global communication demands and what are the patterns of success in language management? In other words, what strategies do companies employ to succeed in a multilingual cross-cultural global trading environment? What are the implications for education, and indeed, what steps can we take to prepare ourselves for the linguistic changes that lie ahead, both for the economy, which affects all out livelihoods, and for ourselves and our children? 2

3 Recent Reports on Economic Benefits of Languages British Chambers of Commerce Survey (aprt 1, 2) 2006 ELAN Study of European Companies Language Needs, European Commission/CILT, (Principal author: Hagen) 2009 GoSkills Employers Skills Survey, Sector Skills Council Passenger Transport 2010 Education and Skills Survey, CBI 2011 'The economic case for language learning and the role of employer engagement'. Education & Employers Taskforce 2011 Report on Language Management Strategies and Best Practice in European SMEs, (The PIMLICO Study) European Commission (Author: Hagen) 2011 The Language Guide for European Business. Successful communication in your international trade. European Commission (Author: Hagen) 3

4 Multilingual Global Consolidation 50% of the world s population speak now one or more of 12 languages Mandarin, English, Hindi, Spanish, Russian, Bengali, Portuguese, German, French, Japanese. This comes as a manageable relief to some global organisations and smaller international companies The consolidation of global communication into a few giant language communities, increasingly characterised by their regional footprint. 4

5 India epitomises a modern-day multilingual society: India has 14 recognised languages The almost 1 billion Indian citizens command more than 800 languages with ancient and rich literary traditions and a range of scripts. 5

6 London epitomises modern multilingual cities London is the most multilingual city in the world children in London schools spoke over 300 languages Most individuals in the world currently speak at least 2 languages (which is true for many parts of Wales but less so in many other parts of Britain) and have to operate in a third 6

7 Where is English in the global era, and what are its prospects? Currently, there is no other language to compete with English in global coverage. Ostler estimates that 25% of the world s population is familiar with English in one form or another. Add 375M native speakers to an equal number of second language speakers, plus the three quarters of a billion who have learned it. in some shape or form English will find itself in the service of the world community forever, David Crystal 7

8 The Next Internet Revolution will also not be in English. The proportion of English web-pages is declining relative to others. While internet usage increased by 40% in the USA, in Brazil it went up by 200% in Brazil, 300% percent in India, and over 500 percent in China. 8

9 The steady rise of Chinese and the slow decline of Japanese. Davis (2004) English accounts for only 30% of the world s GDP Chinese 23% Japanese 5.6% Spanish, 5.2% German 4.9% French 4.2% Portuguese 3.4%. 9

10 Foreign Language Provision In HE The number of degree programmes offered in the six principal languages have fallen since 2003 from 503 to 271, a fall of 46%. Recruitment to specialist language degrees peaked in the UK in 1992; there followed more than a decade of steep decline. The decline has slowed in recent years: between 2002/3 and 2009/10 the total fall was 2.6%, including a 1.2% drop in first degrees and 13.8% decline in other undergraduate degrees (Source: UCML) 10

11 Percentage of Languages A levels as a percentage of total enrolments,

12 Multilingual Global Consolidation 12

13 The British Chambers of Commerce language survey typology of individual profiles (2004) Opportunists, who just respond to approaches from foreign clients rather than initiate business developments, most often failing to adapt and localise their product to their market and communicating only in English. Developers, who tend to adapt their products and services more readily to foreign markets but remain reactive towards export development and communicate in English. Adaptors, who make an effort to adjust their products and services to their foreign markets, have sales literature in the customer s languages and have penetrated a wide range of markets. Enablers, who are proactive in their exporting, consciously select markets and adapt their products, services and literature to meet the markets. They place a great deal of importance on staff within their business having foreign language skills. 13

14 From Opportunist to Enabler Only 33% of Opportunists have an annual export turnover above This increases to 54% for Developers, 67% for Adapters and 77% for Enablers, who place the most value on language skills within their business. Export sales by Opportunists (the segment that least values language skills) are declining by an average of a year per exporter Enablers exports are increasing by an average of a year per exporter. 14

15 Language barriers as a tariff on trade Language differences as trade barriers and have been quantified as between 15%-22% in terms of tariff equivalents. Sharing a common language can increase bilateral trade by between 75% and 170% 15

16 Language barriers as Tariffs There are large tariff equivalents of language barriers in printing & publishing (18%); clothing (14%); professional, scientific and controlling equipment (10%). Language barriers also adversely affect international integration through the effect on factor markets, notably migration and capital flows, and hamper intranational social harmony. 16

17 Reducing the tax In the case of the UK, the boost to well-being from the reduction of even 1% tax on British exports, that amount to one quarter of GDP, can be substantial It is equivalent to a similar rise in productivity; 1% of 25% of GDP is 0.25%, more than 4.4 billion Euro 17

18 Language Barriers in UK Export Companies From the results of many surveys of language use in UK companies over years: At least 20%-25% of export companies in England and Wales regularly declared they had generally lost business due to language or cultural deficiencies Only 6% declared they d lost tangible contracts in ELAN One estimate suggests that barriers currently cost the UK at least 7.3 billion, or 0.5% GDP, and possibly as high as 1.2% GDP. 18

19 The Causes of Lost Trade 19

20 The cost of language gaps According to the results of the ELAN (2006) Study regarding approx SMEs: Over one in ten European SMEs declared they had lost an identifiable contract for lack of foreign language skills or expertise. Two out of five expected to acquire new language skills in the near future. Amongst the nearly 200 European SMEs that lost potential contracts for lack of foreign languages; 37 valued the lost business at between 8 million and 13.5 million; Further 54 companies had lost contracts between 16.5 million; 10 had lost contracts worth over 1 million. 20

21 Overview of ELAN Findings for SMEs in UK, France and Spain (2006) Have companies... YES UK % YES Spain % YES France % Put in place Language Management strategy Their choice of market influenced by staff language skills Acquired staff with language skills due to export needs Employed native speakers? Employed local agents to undertake language work Employed professional translators etc Adapted website (language & culture) Missed a contract: for lack of language skills Plans for trading in new export markets

22 Languages used by European SMEs for exporting (Source: ELAN) Note use of same languages in multiple markets: German is frequently used when exporting to 15 countries (including Germany and Austria). Russian is frequently used in trade with the Baltic States, Poland and Bulgaria. French is frequently used in 8 countries, including France, Belgium and Luxembourg. 22

23 Languages that European SMEs feel they ll need in near future (ELAN, 2006) Source: ELAN,

24 Features of Successful Companies Four language investments have been found to boost sales abroad:- employment of staff with existing language skills a language management strategy, = the planned adoption of a range of techniques to facilitate effective communication with clients and suppliers abroad. employment of nationals use of professional translators = e.g. for high-quality translation and localisation. + 5 th : Multilingual and culturally adapted website 24

25 Where using the customer s language can bring additional benefits Establishing a positive rapport and sense of trust with major customers. Showing respect for cultural and religious differences. Demonstrating a long-term commitment to a foreign market. Showing your employees and foreign clients that you mean business. Increasing the flow of market intelligence and customer feedback and understanding its real meaning. Talking to customers in their own language leads to better communi-cation and can prevent misunderstanding. It shows our customers and business partners that we foresee a long-term commitment to their market. Each partner is more confident in business meetings, and speaking the same language can save time, allow for a more relaxed meeting and result in better business. (Nikwax Ltd, UK, PIMLICO Study) 25

26 What does good language management look like? Comprehensive list of language investments conducted by most successful companies: use of local agents to solve language problems; creation of specially culturally and/or linguistically adapted websites; use of linguistic audits; use of professional translators/interpreters; translation of promotional, sales and/or technical material; 26

27 Common Language management measures, Part 2 translation of promotional, sales and/or technical material; language training and cultural briefing schemes; online language learning; employee selection and recruitment policy; support for employee mobility, buddying & secondment schemes; link-forging with local universities; foreign student placement programmes; native-speaker recruitment; e-commerce involving multilingual operations; product or packaging adaptation in line with local tastes and customs. Source: PIMLICO Study,

28 ELAN findings: Macro-economic benefits Assuming a model where SME s account for 45% of European output (the range across the EU is 30% - 60%) and supposing that half of the SME s responsible for that output adopted the four language management elements listed above, we could speculate that exports would rise by an astonishing 10% of GDP equivalent to more than 1 trillion euro. Furthermore, it is likely that there would be productivity gains from exporting which would wash back to the internal economy. Total Factor Productivity for exporters can be as much as 3.7% higher than the industry mean. The 3.7% productivity spill-over from increased exporting could have a substantial additional impact on the EU economy: 3.7% of 10% of GDP is 0.037% of GDP, which for the EU as a whole, is equivalent to an extra 4 billion euro +. 29

29 What Impact do cultural barriers have? Cultural barriers are only half as frequently encountered as language, but often a language barrier conceals a cultural one. Icelandic SME: You have to use different measures to get the Germans and the British to pay, they seem offended by letters based on the style I use in Iceland A Polish company French people have an inadequate attitude towards Polish staff. A Portuguese company Brazil has Portuguese as its language, but a completely different business culture. An Irish company We lack knowledge of the culture of selling, particularly in non-european countries. An English company It is difficult to penetrate Japanese companies due to outsider status. 29

30 What kinds of cultural insights issues arise for British companies? (In Germany they are) less prepared to accept technical data/results from non-german sources. (Welsh company) In Germany if you can prove that what you ve got is better than what they ve got, they ll buy it. (Welsh company) Need for much greater relationship-building in Italy (East of England) (In the Middle East) personal interaction family-friendsbusiness holistic approach (East of England) English often too polite and don t get the same success rate within Germanic cultures, as they don t insist enough (East of England) 30

31 For companies For companies wishing to ride the global challenge, the key to operating in multicultural environments requires companies to develop communication or language management strategies (LMS) There are 4-5 specific ones that appear to make all the difference More UK companies need to acquire the knowledge to develop Language Management Strategies Plus: Intercultural competence relevant to market 31

32 Education: Our Response - Declining Foreign Language Competence In UK Higher Education, there has been an overall decline in the number of UK-domiciled students applying to undertake degrees in Modern Foreign Languages (= specialist language degrees) However, the Institution-Wide Programmes in Languages (e.g. typically 2-3 hrs per week per semester) have grown in UK universities and provide provision across diverse languages The prospects for UK exporters acquiring appropriate language skills from school and university leavers for the workplace is now less likely The compulsory study of a foreign language after the age of 14 has been abolished, leaving the choice to schools, which has led to a sudden decline in the number of students studying languages at school in the last five years. 32

33 Percentage of Maintained Schools where there is 50%+ participation in Keystage 4 Languages Blue: Year 10 Red: Year 11 33

34 Higher Education: Placements Abroad Too few UK graduates currently undertake work and study abroad. The number of participants in the EU s ERASMUS student exchange scheme continue to expand, while UK participation, with the exception of 05/06-07/08, when existing work placements were incorporated into the ERASMUS scheme, has consistently fallen. Across the ERASMUS programme, non-specialist language students represent 85% of participants. Only in the UK do specialists in other disciplines make up only 60% of ERASMUS participants: such is the lack of language skills among UK students generally, and their lack of recognition of the benefits of work and study abroad. Source: UCML 34

35 Value for the individual When controlling for other factors: US studies have found that the effect of taking a language at school and/or university provides wage premiums of up to 4%. In the UK, studying languages: at university has been shown to lead to good employment prospects. Three and a half years after graduation, more languages graduates are in work or further study than their peers who studied Law, Architecture, Business or Computer Science, and earning high average wages. Source: HEFCE 35

36 The Views from Industry (CBI) Confederation of British Industries (CBI) skills survey (2010) This survey revealed that 74% of employers want to employ people with conversational skills in a foreign language a figure that is likely to grow. If as a nation we fail to meet these demands, employers will increasingly recruit from abroad, and when it comes to interviews, monolingual British candidates will find themselves overshadowed by foreign counterparts with two, maybe even three languages. 36

37 Needs of the individual With increasing globalisation the majority of young people entering education today can expect either to work abroad or to come into contact with non-english speaking clients or suppliers, or to be managed here by a foreign company, for a period of their lives. The future global citizen should develop an appreciation for cross-cultural differences, language competence (in 2 foreign languages as a minimum), and be attuned to a more global internationalist perspective with respect for differentness. 37

38 Recommendations for Higher Education UK requires an expansion of numbers on language degrees and a target that all UK graduates should have competence in English and a second language to address the shortage of graduates with the language and intercultural skills required by the economy Modern languages continue to be both Strategically Important and Vulnerable, and require additional targeted investment, specifically in line with trade needs The international experience of work and study abroad with proven benefits to all graduates and to the UK economy to be encouraged Student mobility is already very low among UK undergraduates, and will require special concessions on fee levels if we are not to deter students from taking four-year programmes which include work and study abroad programmes opportunities 38

39 Our Challenge: Monoglottery or Multilingualism? What is Our National Strategy for specialising in BRIC languages? Should we restore languages as obligatory at Keystage 4 in secondary schools? How do we introduce more export-focused specialist language degrees and cultural awareness programmes at UK universities (so every graduate leaves with a language) How do we implement internationalisation programmes at the earliest stages of education to wean people off the English-isenough perspective of the world, How do we challenge public attitudes favouring monoglottery in favour of multilingualism for the 21 st Century Global Citizen? 39