Implementation and Enhancement Plans
Introduction
In 2006 ELAN: Effects on the European Economy of Shortages of Foreign Langauge Skills in Enterprise was undertaken by Interact in cooperation with CILT for the Directorate General for Education and Culture of the European Commission. An international team of researchers investigated the impact of lost business as a result of lack of foreign language skills and intercultural knowledge in 29 countries of Europe. The survey showed that on average 11% of all European businesses admitted to losing trade for the above mentioned reasons. Due to various cultural differences there was a surprising discrepancy between countries, Bulgaria showing 12,12% lost trade, Latvia 3,40% and Portugal 2,97% respectively. With more than 50% of the companies claiming to have a language strategy in place four key factors were identified as essential for determining a company’s success in cross border trading:
- Recruiting native speakers with language skills,
- Adapting the company website with English (62%) being the most popular foreign language followed by German.
- Using translators and interpreters,
- Using local agents.
These four key factors are addressed and part of Language Communication Audit (LCA) scheme, known as the Export Communications Review in the UK and part of an initiative introduced by the UKTI under the management of the British Chambers of Commerce in the mid 90s to enhance a company’s competence, confidence and ultimately exporting performance and turnover by identifying key areas in which that specific company’s communication strategies are lacking. The rational for introducing the scheme was among other aspects based on:
- the fact that one in five UK exporters claimed to face intercultural barriers with markets shifting into new areas such as Asia,
- one in four faced language barriers and
- one in 20, as also found in the Elan study, claimed to having lost business as a result of lack of language skills.
Predecessors of the ECR such as “Business Language Review” and the “Languages in Export Advisory Scheme (LEXAS)”, would discourage exporters by associating the service too closely with “language learning” and not enough with communication strategies as a whole. The scheme was re-positioned to help companies understand the international communications interface and grasp the full scope and value of the review offered. Renaming the service as an Export Communications Review positioned it as an essential service appealing to a large amount of companies that trade overseas.
To date over 1000 companies have altogether benefited from the review so far with more signing up at the rate of 15 a month.
Approximately 75% of all audited companies in the UK believe they have gained or expect to gain business by an increase in turnover due to new market opportunities as a direct result of implementing the changes recommended by the auditor. Companies that have had a review are subsequently less likely to claim having lost trade through their failure to overcome language and cultural barriers.
This report reviews the need of introducing a similar scheme in Bulgaria, Latvia and Portugal and presents a summary of each country’s implementation plan on the following pages.
Bulgaria:
Foreign trade was a state monopoly in Bulgaria under the Ministry of Foreign Trade until 1990. The end of central planning opened the Bulgarian economy to world competition with many multinational companies establishing themselves in Bulgaria as a consequence. Simultaneously the export market was opened to Bulgarian domestic companies and export trading started with staff facing a shortage of foreign language skills. Nowadays the situation has improved but still big gaps remain. The recent survey Elan (2006) showed that approximately 80% of Bulgarian companies are planning on exporting to new markets and 5% realise having missed business opportunities due to a lack of foreign language skills and intercultural knowledge. Specific requirements include understanding the mindset better, improving negotiation skills and higher proficiency in correspondence.
Only 7% of companies employ native speakers for supporting foreign trade and although 84% of companies claim to adapt their websites to foreign markets, only word for word translations are implemented without regard to cultural differences. Furthermore 71% of companies expect to see their needs for foreign language skills increase, while 50% also realise the need for further intercultural skills. There are currently no programmes in Bulgaria to support companies in evaluating their existing communication needs and strategies in addition to raising their awareness on the importance of foreign languages and cultural barriers in the export area. This makes the introduction of the Language and Audit training Scheme urgent and very much needed as a tool for Bulgarian exporting companies in the 21st century.
Latvia:
From 1940 till 1991 Latvia was part of the Soviet Union, which strictly determined its market economy. At the time, with the communist regime and economy in place, only a very small number of companies could trade internationally. Declared an independent country 21 August 1991, foreign multinational companies saw an opportunity to establish subsidiaries in Latvia, and Latvian companies all of a sudden had the possibility to run their businesses abroad. IN 1992 Latvia joined WTO followed by entering the partnerships of NATO and the EU in 2004.
With increased new market challenges and competition quality, environmental and safety requirements increased in importance, together with the need for a long term strategy and a different approach in business paradigms. Although Latvia had become independent, the old ways of communicating and trading remained for some time. Equally Business Communication was a new subject ans as such not available at universities. Many companies have today come to the realisation that they need communication skills and above all foreign language skills in order to succeed in international trade. English is seen as one of the most essential skills and presentations, negotiating and communicating via emails stand out as being especially difficult. Maintaining business relationships in English also tend to be particularly difficult. The idea of training a new type of Language and Communication Auditor has been warmly welcomed by the business community to help identify their companies’ communication barriers. No such scheme exists as yet in Latvia and will help to recognise both strengths and weaknesses in Latvian companies and ultimately improve cross barrier trade.
Portugal:
Portugal has no support programme for export companies in the field of Language and Culture at any level, whether national or local, whether state subsidised or private. Although various reports and surveys show that approximately half of the Portuguese exporting companies have a communication strategy in place, the results are contradictory in terms of usage of languages in foreign market dealings and the response rates given. There prevails however a common sense among exporters suggesting that no one would argue the importance of the customer’s language and culture even though results may vary as to the significance of using local agents.
The majority of Portuguese exports are destined for the EU with 75.1% in 2001. Most of the products are t be found in the Machinery and Appliances sector followed by vehicles and other transportation products. Internationalising the Portuguese economy and increasing export is high up on the agenda of economists and government. Education and training are furthermore repeatedly mentioned as determinant factors for the development and competitiveness of the country’s economy (Report by Banco de Portugal Board). Nevertheless, any support for linguistic and intercultural improvement still remains to be implemented as this implies a gap in research and the availability of cultural information and linguistic support for exporters. In the meantime the Language and Audit Training scheme can and will alleviate the gap by introducing the LCA auditor to export companies in need of identifying their communication weaknesses. The programme is to be run by Universidade Aberta and possibly supported by IAPMEI in the future whilst awaiting either local, regional and/or national subsidising.
