Italy’s Localization Market (in 2005)

In 2002, a handful of localization professionals teamed up with the mission of helping localization professionals improve their skills and knowledge and localization service providers expand their businesses.

A 2015 blog post on this website recaps the story of that team and its deeds. Access to this post is restricted, but you can purchase the relevant password or read it on Upstream.

The name of that self-convened no-profit working group of localization professionals was Gruppo L10N and, after disbanding in 2008, traces of it remain in a few articles and presentations, including an introduction to localization (in Italian) and a guide to building a localization kit.

Despite the many initiatives, mostly free, like publications, Gruppo L10N’s experience remained quite neglected, possibly because its members were no pompous academics.

In 2004, Gruppo L10N ran a survey on Italy’s localization market and released a report, which is now newly available for download.

Running the Survey

Considering current surveying methods shoddy, we opted for an alternative, and possibly more traditional, approach, starting by selecting and gathering a representative sample.

We then collected the names of professionals and companies from major trade organizations listing localization in their offering and sent them an invitation to respond.

We also ask PASS Engineering (the developer of Passolo, then still an independent company) and SDL to sponsor the survey and offer a license of their flagship products as prizes for a raffle among participants.

Apparently, the incentive worked, since participation in the survey largely exceeded expectations. We could then quite comfortably have a meaningful sample. We finally sent out the questionnaires to 121 people who accepted to receive them and, once we got the responses, we cross-checked the results for reliability.

The Survey Report

The survey consisted of two questionnaires. The first one was general, while the other went more into detail.

96 (79%) people out of the 121 who accepted to receive the questionnaires joined the survey, and 88 (73%) filled in the first questionnaire.

The sample was significant since the major professional associations together consisted roughly of a thousand members with a very small quota, approximately 5%, involved in localization. On the other hand, according to ISTAT and EU data, there were roughly 15,000 translators in Italy.

Respondents also included 29 companies, as resulting from a query in the Yellow Pages database; 25 filled in the first questionnaire.

The sample consisted of 35% men and 65% women. The data showed that most respondents (74%) were freelancers, with localization companies counting only for 18%.

Localization and translation were the main occupation of almost 41% of respondents. This data was substantiated by 77% of respondents declaring they pursued a full-time occupation for the equivalent of a standard working week. Almost half (49%) of respondents were active mainly in the localization of documentation and general content, 23% dealt mainly with on-line helps while barely 14% worked on GUI’s and resource files.

The responses on business development over the previous two years were equally distributed: Barely more than half (51%) of respondents expected an increase in business volume, while the remainders expected a decrease. Noticeably, 65% of respondents working only in fields other than localization reported a substantial increase in turnover. All respondents agreed on website localization as being the segment with the highest growth in the nearest future, and 64% of respondents confirmed its substantial growth even over the previous 2 years. CRM and ERP were reported as the segment offering the brightest prospects.

Italy was the prime market for 47% of respondents, while jobs came mostly (67%) from translation agencies. The elements considered as mostly distinctive of best customers were professionalism (37%) and prompt payments (26%).

The common counting and billing system for localization services was an ad hoc word rate; this was based on a market average for 37% of respondents, followed by a cost-recovery plus fixed margin rate for 23%.

Respondents equally split on market contraction (31%), stability (35%), and increase (34%), while, for the future, they agreed on a forecast of substantial stability in turnover over the following 12 months.

A stunning result from the education section was that 50% of respondents had pursued no formal education in localization. Although distressing, given the professional and technical skills required, almost 45% of respondents declared they did not read any trade or professional magazine, while more than 92% invested less than 10% of turnover in education and training. These data, however, was consistent with national data. On the other hand, even though almost 48% of the sample declared that they made their choice on an economic basis, costs seemed to be a real problem only for 9% of respondents. The major problem for 51% of the sample seemed to be time.

Quality systems aroused a modest interest too. More than 77% of respondents had no quality system in place, while less than 17% of those having a quality system went for certification, despite 84% of respondents estimated a growth in customer demands in two years.

56 (64%) out of the 88 first respondents filled in also the second questionnaire.

The most important result in the first panel was the very high percentage (nearly 70%) of respondents not being members of any trade organization. The answers also substantiated a general diffident attitude towards quality systems and running a business according to them. Almost 80% of respondents declared they followed strict working procedures, and yet fewer than 10% wrote them down in a document.

The data on clients showed a typical trend in Italy’s domestic market, and a substantial gap with the rest of EU. In fact, roughly 73% of respondents reported late payments as the major problem in customer relationships, while almost 80% reported average terms of payment ranging from 30 to 60 days from date of invoice. The data on payments per se would not have been alarming if 46% of respondents did not charge any advance and over 83% did not make any use of financial leverages.

Finally, despite the generally difficult conditions detected from the first questionnaire, the average level of remuneration was still fair: the rate fork ranged from € 0.05 to € 0.12 per word, while almost all respondents (98%) were willing to grant discounts but limited their willingness to 20% (44%) on very large jobs.

Final Remarks

Even fifteen years or so later, the results of the survey remain quite reliably valid. In fact, anyone who has had the opportunity to grow even a superficial knowledge of Italy’s localization market would easily realize that the situation has anything but radically changed.

This reliability is son to the strict methodology used in designing and running the survey, which was definitely challenging, expensive and time-consuming: It took roughly six months to design the survey, run it, clean data and analyze responses.

So, this raises a disturbing question: Is this also how translation industry “experts” design and run their surveys today?

They may be no data scientists, no statisticians, but this would be just one more reason for doing things well. Because “whatever is worth doing at all, is worth doing well”.


Author: Luigi Muzii

Luigi Muzii