Reading time 3 minutes
The language services sector is going through a crucial transformation. According to CSA Research's latest quarterly report, the industry has seen a significant drop in its revenue from $52.01 billion in 2022 to $49.68 billion in 2023.
This 4.5% fall underscores the challenges facing the industry in an environment shaped by inflation, the slowdown in business spending and the impact of generative artificial intelligence (AI).
Key factors in the decline
The main reasons for this squeeze include high inflation and high interest rates which have prompted many companies to scale back or freeze their investment in conventional language services such as human translation and interpreting. Furthermore, the rise of generative AI has led to growing demand for cheaper, machine translation (MT)-based services, which has maintained the volume of translations but reduced per-word revenue and project management.
The role of machine translation
Although many language service providers (LSPs) have turned to machine translation to stay competitive, CSA Research points out that this strategy, while useful in the short term, is not enough to ensure long-term growth. Simply rolling out machine translation does not ensure higher revenue since demand for human-intervention services (traditional translation and interpreting) is continuing to decline.
New opportunities in the offing
Notwithstanding this challenging landscape, the report notes that there is significant growth potential if LSPs can successfully navigate the new era of AI. Nowadays, only a small part of global content is translated and this is a huge opportunity. Companies that diversify their service offerings, including cultural adaptation, technology, content customisation and multilingual content generation in local markets, will be able to capture this untapped market.
Key aspects for the future
To stay at the forefront, LSPs need to reposition as global content service providers and focus on offering value-added services. They will also need to work closely with customers to devise new services, leveraging technology strategically to address specific customer problems.
The report concludes with a warning: companies that fail to adapt to this new scenario, in which AI is redefining the industry, are at risk of becoming obsolete. However, those who can effectively integrate human services and technology will have new growth opportunities in a global marketplace that is increasingly calling for innovative and efficient solutions.
At ATLS, we appreciate the need to embrace these changes. We are a translation company with a robust technological base which enables us to furnish a wide range of innovative solutions.
Not only do we deliver high quality human translation but we have also diversified our services to encompass AI-enhanced translation, copywriting and international digital marketing services.
Our end-to-end approach ensures our customers receive not only translations but also comprehensive strategies to drive their global presence and maximise their reach in a range of markets.