Report: EU ‘losing business’ due to lack of language skills

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European business risks losing competitiveness as other countries start outperforming the EU in terms of language skills, concludes a report presented by business leaders last week (11 July).

Emerging economies, primarily in Asia and Latin America, are quickly acquiring the solid language skills necessary for successful competition and Europe will have to promote formal and informal language learning more effectively if it wants to compete, concludes the Business Forum for Multilingualism’s final report, entitled ‘Languages mean business: companies work better with languages’.

A competitive advantage

Indeed, according to the report, presented by EU Multilingualism Commissioner Leonard Orban and Business Forum chair Viscount Etienne Davignon, as much as 11% of European SMEs lose business every year as a direct result of linguistic and intercultural weaknesses, while they could considerably improve their export performance if languages are used “strategically”.

“Languages are not only needed to boost sales and marketing. Upstream supply chains cross borders to the same extent as international services and finished goods for export. Labour markets are just as global. Integration of multilingual and multicultural workers is crucial,” underlines the report, stressing that multilingualism could also help to integrate millions of immigrants in Europe in labour markets.

As for succeeding in international business, the report notes that SMEs should focus on improving proficiency in English, but that German, French and Russian are also highly in demand, as well as Mandarin and other Chinese languages.  

According to Commissioner Orban, the report will feed into the Commission Communication on Multilingualism due in September, reflecting his “firm belief that languages give EU businesses a competitive advantage”. Indeed, the text recommends a raft of measures to be taken at company, regional, national and European level to help “turn its linguistic diversity into a competitive advantage”.

‘Language strategies’ for business

The report notably stresses the importance of having language strategies endorsed at the highest management level in European companies. Such strategies should include investing in training, employing native speakers and ensuring good multilingual communication via ICT, with particular focus on the Internet (such as web-based translation) and new media.  

At national level, it specifically calls on governments to widen the choice of languages available in school curricula. It further stresses the importance of awarding proper recognition for language skills – acquired at all stages of life – to improve the linguistic competence of job candidates. “Official recognition of informal learning is unusual and such language skills are seldom taken into account as true personal merits,” it laments. 

At EU level, it calls on the Commission to establish a European platform for permanent best-practice exchange regarding languages for business. 

Funding improvements required

The report further requests that the EU executive “gather all relevant information about Community programmes supporting languages for business” on one website to work as a “one-stop shop providing practical guidelines for companies on how to apply for funding”. 

It says awareness among EU business of Community funding opportunities and how to apply for them is limited, while the application procedures are widely regarded as “cumbersome” and “time-consuming”. Moreover, the funding available is minimal and thus it should be made clearer that governments and regional administrations will need to provide most of the money, it stresses. 

Viscount Davignon said “the success of these programmes has been lower than expected”. Orban admitted that “unfortunately many companies are not aware of Commission initiatives” and promised to “investigate how this can be addressed as soon as possible”. 

English ‘a basic skill’

The report concludes that “in general, research and experience show that there is a degree of complacency, as English is perceived as the only necessary language for international business”.  

Conceding that “you cannot deny the role of English,” Orban told a separate event on 9 July that its use in the global business environment has nevertheless evolved into “a basic skill that you naturally have to possess” and thus it is knowledge of other languages that benefits EU companies. 

Similarly, Davignon said the Business Forum had been “sufficiently realistic to understand” that English is essential but stressed that “it is no longer enough to respond to business challenges” and warned that “the need for multilingualism is not being adequately taken care of” in Europe. 

‘Monolingual trend’ 

Urging the EU executive, national governments and business itself to take the conclusions of the report on board, Davignon observed that he has “witnessed the business environment gradually becoming more uniform and monolingual” over the course of his working life, warning that “it will not be possible to reverse this trend overnight”. 

While Commissioner Orban “cannot say” how many of the report’s recommendations will be in its new multilingualism strategy, he nevertheless said “we would like to see a follow-up,” expressing hope that EU economy ministers would take the recommendations into account. 

Multilingualism Commissioner Leonard Orban said the report "proves how linguistic diversity and investing in language and intercultural skills can be turned into a real asset for prosperity," describing its recommendations as "an excellent contribution" to the upcoming Communication on multilingualism and "clearly in tune" with the Lisbon Strategy objectives. 

Language skills are crucial for "jobs and mobility in a competitive Europe," Orban added, describing lack of them as "the main barrier to mobility" in Europe. Lamenting the fact that almost half of EU citizens are monolingual, he said "the recipe [for Europe] is not a common language". "Europe can never be reduced to a monochrome order," and although language learning can "initially be overwhelming, it soon becomes easy," he said. 

Commission Vice President Günter Verheugen, responsible for enterprise and industry, said "investing in language skills and managing diversity will be crucial for European society to fully benefit from the globalised world". "Diverse language skills allow for communication, understanding and finding new solutions," he added. 

Business Forum chair Viscount Etienne Davignon said "languages are an essential element of any business strategy" because "a lingua franca can never be enough to satisfy every communication need," stressing that "multilingualism opens doors to new markets and new business opportunities". 

Claiming that there is a mismatch between what business is seeing and what it believes is necessary, Davignon said the report draws attention to what needs to be done by actors at all levels, stressing that implementing its recommendations will be "an ongoing process". 

He expressed hope that the report "will fuel the Commission's current debates on the development of multilingualism policy" and "hopefully contribute towards a shift in awareness and behaviour" regarding the business sector’s attitude to languages. 

Outlining the programme of his government's EU Presidency, French President Nicolas Sarkozy told MEPs that "the world cannot be reduced to a single language and culture". 

Asked why the report was not available in all the official languages of the European Union on launch day, Commissioner Orban responded: "We have several language versions available today and will have all the versions available next week". The issue "concerns the capacity of our service to deliver within a certain period," he explained. 

The Business Forum for Multilingualism brings together prominent business leaders and human resources managers from across Europe to discuss investment in language skills and identify how companies can use language skills to maximise economic performance. 

Chaired by former EU commissioner Viscount Etienne Davignon of Suez-Tractabel, the forum was established by the European Commission in September 2007 on the occasion of a conference on business, languages and intercultural skills. 

The report complements an earlier one from the High Level Group on Multilingualism chaired by Lebanese author Amin Maalouf, which urged EU citizens to learn a second, 'personal adoptive', foreign language alongside one acquired for professional reasons (EURACTIV 31/01/08). 

  • Sept. 2008: Commission to publish new multilingualism strategy. 

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