How large is the translation industry? Well, how do you define it?

How large is the translation industry? Many industry pundits have very strong opinions about the size of the industry, and I used to share some of those strong opinions. Estimates range from $3 billion to $30 billion or more, but the reality of the matter is that all of these estimates could be correct. (What?!?!? How is that possible?) Yes, they could all be correct estimates. The translation and interpretation industry can be sliced, diced, sorted and classified in so many ways that it all depends on how you define the industry or market.

While researching the size of the market for a report called "Identifying Online Opportunities to Serve the Translation and Interpretation Industry" in 2005, I was certain that the estimate of one research firm was very accurate and that any other estimates far from that number were just crazy. (You can read about these estimates though 2006 in Appendix B: Discerning T&I Market Size, taken of my report.) I asked Michael Anobile of LISA about it and he very kindly and diplomatically gave me a dose of humble pie by asking me (and I'm paraphrasing a long and more useful answer) "well, how do you define the market?" Anobile was right.

The market can be divided by service into localization, translation, interpretation, internationalization, and more. Each service can then be subdivided. For example, interpretation can be divided into subservices including phone interpretation, conference interpretation, community interpretation, and more. Localization could include only software localization or various types of localization which depend on how you define the word "localization". All of these can then be divided into services provided by agencies or freelancers and services provided in-house by governments or companies. Some then define the total market as that market currently served by agencies or the potential amount that could be served by agencies if everyone purchased these services that could.

Ultimately, how you define the market is determined by what part of the market is important to you. Here are a few examples of how companies may define the market differently:

• An interpretation company that provides all types of interpretation worldwide would benefit from knowing the size of the entire interpretation market; however, a phone interpretation company would be concerned with only that portion that can be served over the phone. One estimate may easily be twice the size of the other, but that does not make either of them wrong. And because phone interpretation is still a new industry, such an agency may be concerned with not only the size of the market currently served by agencies, but also the size of the market that could potentially be served by agencies by creating new business.
• A software localization company may not be concerned about how large the government-related translation market is and they may choose to concern themselves with a global estimate that excludes the billions of dollars in government translation performed by such entities as the US military and the European Union. However, this market certainly matters to companies like DynCorp and L-3 that focus on government work.
• Most translation companies may concern themselves with the market size of how much translation is outsourced, because that is all they can serve. However, a unique company like Elanex that provides companies with the technology and services to more efficiently manage its in-house translation services will certainly care about the additional billions of dollars that are not currently outsourced. (This service is called ElanexINSIDE.)

Appendix B: Discerning T&I Market Size contains a lot of good information including many of the varying estimates published by 2006, but it also contains some biases as to how the market needed to be defined based on what was important for the report, and it hints at some lingering biases that I still held before fully digesting my "humble pie." Enjoy.