The Localisation Industry in Ireland: A Sacred Cow

by Lucille Redmond

WENDY HAMILTON, vice-president for strategic development and northern European operations with Bowne Global Solutions, presented an apposite and funny lecture at SLIG 97 called The Localisation Industry in Ireland- a Sacred Cow?

Ms Hamilton took the bovine image through a series of headings - Mart & Market, Best of Breed and so on - and related them to the current state of the localisation industry.

"When I go to LISA meetings I’m struck by the fact that there are Irish people everywhere you turn," she said. "They're perhaps not working for the same company as the last time you met them, but they are all Irish."

Given that Localisation is an industry based mostly on languages other than English, we should question how we got to this position of strength in the market and what we have to do to keep it.

If you take the whole localisation cycle from globalisation through to distribution, she said, "the software development company stands to the left, and the user stands to the right, and then you've got the bit in the middle - and most of us make up different sized bits in the middle. The only thing that's constant, really, is the translator in between. What is striking is that there is no one who owns the whole piece."

A number of market players were identified.

The multiple language vendors - "I didn't use the term multilingual vendor, because very often multiple language is just that, multiple languages, but not in a cohesive, coordinated way that could be called multilingual".

The single strategic supplier, "doesn't really exist at the moment. In some respects the localisation units of the major software publishers are best placed to fill this role as they are the ones with the most Internationalisation and market management experience".

Various companies are involved in niche marketing. "These firms are typically indigenous, and most often focus on engineering and test services. It is worth noting, generally, that few of the players in the Irish localisation context are Irish companies. Many of them are US owned and that is where the real seat of power is based".

The single-language vendor is not part of the Dublin market, but nonetheless is not one we can ignore, said Ms Hamilton. "This is the one unit that has a guaranteed future. No matter what you do, you can't get from an American or Canadian product to a Finnish product without somebody, somewhere along the line, sitting in Finland and translating words."

The next bovine angle was the herd. "What kind of a herd have we here? These are estimated figures. The 4,000 employees is what we hear often enough, but there are at least another 4,000 indirect jobs." In terms of contribution to GDP, the figure is certainly in excess of $1bn, said Ms Hamilton.

The majority of these jobs are not core localisation, however - a lot is software manufacturing and related services. And a significant amount of what is localisation is reflected back in imports. "While it's a great figure for government agencies to bandy about the US, Asia and Europe, it's not one that should reassure us greatly."

The industry is certainly a breeding-ground for hundreds of graduates annually, "and that's a good thing - though some of us would feel that they're misdirected in some respects - that the localisation industry isn't the challenging developmental environment that they hoped it would be."

Does our position in this industry come from being Best of Breed? Apart from the fact that Irish people are very nice, a lot of them are under 25 and cheap to hire. Certainly, we all speak English, and everybody needs English in the localisation industry (which true, pointed out Ms Hamilton, but still not a compelling reason to locate a business here). We are close to a lot of the markets, also. But really, the cost is the reason anybody is here.

All good cows end up in abattoirs, said Ms Hamilton, so if we look and consider what road our abattoir might follow, these are some of the points we might consider:

In-country single-language vendors have become more sophisticated, allowing them to do more decentralised tasks, which makes it possible for publishers to get their products out to multiple markets at the same time.

Localisation budgets have tightened, software prices have gone down, it's very important to be cost-efficient; however, local costs have increased.

Salary increases are fairly high, rent is high - we're barely competing with Spain, and Asia has overtaken Europe in software sales. So the markets we are close to, are no longer the growing ones.

The market has diversified both in terms of needs and locations. "By needs, I mean that it had mostly been centred on software localisation, but there are a lot of other related activities that have come into globalisation. This is both an opportunity and a threat; service suppliers need to be able to invest in these new areas but find funding this investment increasingly difficult. Even getting the business is now more complex as the seat of purchasing power has become decentralised, to get the same amount of business you need to manage multiple decision makers."

A lot of the advantages associated with virtual teams, while they are not completely realised yet, are certainly strong in people's minds. "If they're thinking about medium-term strategy, they might think about the fact that there might be a virtual team; it doesn't have to be in Ireland, it doesn't have to be close to Europe. This undermines some of the natural advantage we thought we had."

Technology has a double edge. On the one hand, a lot of the technical expertise that we have here is a very strong plus; on the other hand, it has been focused on simplifying the localisation process so that price per word is the key decider – it’s difficult to sell something that truly adds value.

Even with the 10% [corporate tax rate], assuming we have it beyond 2003, the net value is not clear, particularly if you take locations like Asia or Eastern Europe into account.

"We need to show creative leadership - not just follow-through. It isn't about implementing somebody else's software development, it's about selling a much stronger service, it's about adding value in terms of interpreting and understanding markets, it's about owning some developments, about moving upstream in the software development cycle," she said.

The need to be competitive is what's going to win out, irrespective of loyalty, alignments or 10% tax, said Ms Hamilton. "For Ireland to retain a place in this growth industry, we need to find a competitive advantage - and that is not tax breaks or loyalty to relationships that have been built up," she said. "The skill-sets in this room, applied creatively, can drive this. On the other hand, they can all go off to the US and sell the wonderful experience they've acquired here – at a good price, too."