Brussels, 23 February 2007
Each year, thousands of European companies lose business and miss out on contracts as a result of their lack of language skills, according to a study carried out for the European Commission during 2006 by CILT, the UK National Centre for Languages, published today. The findings suggest that there is enormous potential for small businesses in Europe to increase their total exports if they invest more in languages and develop coherent language strategies. Recent research shows that companies that enhance their language skills can exploit better the business opportunities in the EU’s internal market, which, with nearly half a billion people, is the world’s largest.
“Far from being an unwelcome cost to doing business", European Commissioner for Multilingualism, Leonard Orban, said, "investing in language skills can dramatically improve a company’s business opportunities. I plan to place multilingualism at the heart of the Lisbon strategy for more growth and jobs.”
The study, entitled “Effects on the European Economy of Shortages of Foreign Language Skills in Enterprise“, is the first attempt at European level to estimate the cost to EU business of not having foreign language skills. The data in the study is based on a sample of 2000 small and medium-sized enterprises (SMEs) across Europe, correlated with information from 30 multinational companies and a group of experts from the countries involved, and supplemented by a set of case studies.
Nearly half of the exporting SMEs surveyed are planning to expand into new foreign markets in the next three years. Consequently they predict an increase in their demand for language skills to meet this expansion. However, instead of investing in language training themselves, they prefer to look to the Member States’ education and training systems to provide them with people with the right language skills. Or they simply look on the labour market for geographically mobile people who have the required language skills.
The research shows that these responses are increasingly inadequate. A significant proportion of European companies are losing export business through lack of language skills and intercultural skills. The study suggests that increasing investment to develop language skills across the EU would produce far-reaching economic benefits, especially in terms of a positive impact on SME productivity and export performance.
While the report confirms the importance of English as the world business language, other languages are used extensively as intermediary languages. In particular, the analysis reveals that there is a need for a range of other languages if business relationships are to be built successfully. Those cited as being the most important include the main European languages, such as German, French and Spanish, but increasingly also other world languages like Mandarin, Arabic and Russian.
The study will form the basis for the forthcoming work of the Business Forum, which Commissioner Orban intends to launch this year in partnership with European business, to understand better how language skills impact on EU trade and jobs.
The executive summary of the study is available as MEMO/07/79.