Last year, we peered into the crystal ball of the translation industry to make some predictions for 2008. How well did we fare? Let’s take a look.

1. “Foreign exchange drives more translation and shifts production centers.” We said that the shrinking U.S. dollar signaled an opportunity for companies in markets with strong currencies to get more translation for less money. By April, the euro was up to about US$1.60 and oil was selling at record levels. Paradoxically, when the sub-prime mortgage crisis derailed the U.S. economy, the dollar recovered against the euro and the pound. European LSPs continued their search for U.S. production centers, anxious to dollar-cost-average their operational expenses and have a foothold in the American market. Crystal ball assessment: Don’t hire us to manage your hedge funds (and stay out of hedge funds, anyway); however, we did accurately call the changing polarity of the industry, with a renewed emphasis on putting production around the world.
2. “Technology from new sources breaks traditional translation molds.” We predicted that the wave of new language technology that started in 2005 would continue, productizing new approaches from East and South Asia, Eastern and Central Europe, and the Middle East. We also saw more mainstream software and open-source interest in localization, and a gmail-like translation memory software as a service. Crystal ball assessment: The supply side of the industry did all of this and more. Sure enough, gmail-like TMs are coming from Elanex, Lionbridge, and others.
3. “Terminology pushes to the forefront.” We said that terminologists will be seen as the druids of the translation process in 2008. Crystal ball assessment: Maybe “druid” in the sense of being extinct? Seriously, terminology did pop up more often than in the past, but it hasn’t taken off in earnest in the mainstream. Part of this is due to the state of the technology, which needs an overhaul. We’re in the midst of primary research on terminology management, so we’ll share some results in 2009.
4. “Language service buyers cluster at two ends of the management spectrum.” We wrote that “the high, often unknown cost of translation across the enterprise will combine with foreign exchange pains to renew efforts at centralizing purchases.” Vendor managers would be crucial to this drive, perhaps even leading to the creation of a Language Vendor Management Association. Crystal ball assessment: The struggling economy helped us out on this one, with many companies paying more attention to this critical function. To the relief of spouses and partners of top-tier frequent flyers, no new associations were created, but Common Sense Advisory did convene several vendor management colloquia on the topic, and we have seen a great deal of interest regarding this topic.
5. “Language industry standards still fall short on offering value.” We thought that increased interest in open content, collaboration, and networking would drive specifications like the Open Document Format, DITA, and XML, while language technology standards like TMX and TBX would be be hobbled by the small-mindedness of vendors. Crystal ball assessment: Software vendors are driving toward more use of XML-based tools, including TMX and XLIFF. Quality specifications from ASTM, CEN, and ISO still trail expectations.
6. “The quest for more traffic will drive machine translation.” We wrote that MT marketing buzz would continue trailing revenue reality, and that MT suppliers would look for more eyeballs, on-demand translation for user-generated content, and more focus on social networking and search sites. Crystal ball assessment: The low-revenue buzz has continued, but we have seen major MT initiatives at places like eBay, Expedia, and Intel. Increased output quality, vendor investment in marketing, and Google’s push all drove more attention to the power of MT. All the suppliers hope that revenue is next.
7. “Suppliers seek differentiation or an exit.” We predicted that several companies in the Top 20 would seek professional managers from outside the industry; other LSPs and some technology vendors would look for more internal growth, acquisition, or an exit strategy; and Wipro would begin acquiring. Crystal ball assessment: As far as we can see, most executives from outside the language industry stayed where they were. M&A by Translations.com and Welocalize proceeded apace, with many smaller LSPs grooming themselves for acquisition. Long-time partners LLCJ EEIJ (number 16 in our top 25 list) merged, and Wipro still lurks at the edges of the market

While our predictions were largely on-the-mark, we think that even Nostradamus would have had a tough time predicting what happened in 2008. Let’s see how well we do with our predictions for 2009.