Small and Medium-Sized Enterprises

Baroness Coussins Excerpts

Wednesday 26th June 2013 Lords Chamber

[Baroness Coussins]

My Lords, I want to comment specifically on Chapter 6 of the report, which deals with the topic of languages and culture. I declare interests as vice-president of the Chartered Institute of Linguists and as chair of the All-Party Parliamentary Group on Modern Languages, on whose behalf I submitted evidence to the Select Committee.

I congratulate the Select Committee on taking language skills seriously as a mainstream issue. This makes a very welcome change from the approach that we often see, which is either to overlook language skills or, at best, to mention them as a footnote. However, since the report’s publication, two new authoritative pieces of research have been published—a new report from the British Academy and another, only two weeks ago, from the British Chambers of Commerce. I think that if the committee had had the benefit of these two latest studies, its recommendations might have been even stronger and had a slightly different focus. The Government, of course, do have this advantage, so I hope that in his reply the Minister will comment on how they might update their response to the recommendations on languages in the added light of the recent findings.

It was disappointing that the committee received mixed evidence on the importance of foreign languages and that in some sections of British business there is still an outdated belief that English, vital thought it is, is enough. The latest British Academy report shows how ingrained monolingual attitudes are not only harming the export potential of current businesses but standing in the way of developing a strong supply of language skills for the next generation by preventing successful functioning of the market for language skills.

It is true that some surveys show very small numbers of firms identifying languages as a barrier to export growth. However, the British Academy points out that discrepancies in findings can be accounted for by differences in the sample and profile of respondents, whereas in Kingston University’s more focused study of SMEs’ approach to doing business overseas, The eXport Factor, issues relating to language and foreign cultures were seen as the biggest barrier of all, cited by 31% of SMEs.

The recent report from the British Chambers of Commerce showed that the proportion of non-exporters who would like to trade internationally has risen slightly even since the Select Committee’s deliberations. Its latest survey covered 4,500 businesses, more than 90% of them employing fewer than 250 people and three-quarters fewer than 50. The BCC calls the extent of the language deficit “sobering”, pointing out that 70% of respondents had no foreign language ability for the markets they served, and that the deficit is greatest in the fastest-growing markets. For example, only 0.5% had any ability in Russian or Chinese. With the importance of market growth in Latin America, it is equally shocking to me that 64% speak no Spanish, never mind Portuguese.

The impact of this on the bottom line of business, and therefore on the UK’s economy and competitiveness, is plain and was clearly recognised by the Select Committee. The UK could be missing out each year on contracts worth between £9 billion and £21 billion, whereas firms that proactively use their language skills and the cultural knowledge that goes with them achieve on average 45% extra sales.

The report acknowledges the weakness in the argument that English is enough because it is the universal language of business, pointing out that only 6% of the world’s population consists of native English speakers. Even the dominance of English on the internet is declining. In the past decade, the report tells us that web content in English has increased by 300% but that content in Chinese has gone up by 1,500%, in Russian by 1,800% and in Arabic by 2,500%.

There is also a circularity in the argument that English is enough because, as the report points out, UK companies tend to trade only or mainly with other English-speaking markets. Therefore, the lack of language skills is self-limiting and constraining. We are cutting ourselves off from opportunities for growth by being blind to the languages barrier.

A perfect example of that is the languages industry itself. This sector includes interpreting, translating, language-teaching tools such as text books, CDs and online resources, subtitling, dubbing, web localisation and much more. In 2009, the EU published the first ever study of the size of the language industry, estimating its value at €8.4 billion and on target to double to €16.5 billion by 2015. The study makes recommendations to help businesses to seize the opportunities to benefit from multilingual competence. SMEs in particular are advised, for example, against assuming that localising a website into the language of a target market is enough to generate sales, and EU member states are urged to introduce compatible statistical measures to help foreign language planning. I should like to ask the Minister whether this particular recommendation is what the Government had in mind when they said on page 9 of their response to the Select Committee report that they were developing a metric to quantify the problem. Can the Minister say what that metric might be?

I should also like the Minister to comment further on the recommendation that UKTI should make a priority of dispelling misperceptions to do with language difficulty and help SMEs to deal with the problem. I find this recommendation a little unsettling because it is not clear to me whether the committee regards the employment of native speakers and outsourced translation services as the best strategies. I would be concerned if it were or indeed if that were the opinion of the Government. The report overstates what can be done with technology and native speakers and is not quite strong enough on the importance of developing the UK’s own capacity on languages. Every native speaker employed for their language skills acts as a disincentive for UK nationals to develop their own.

The committee indicated just how bad the UK is in comparison to its EU partners. It is pretty much bottom of or worst at every type of language skill you can measure. The take-up of languages at GCSE has halved since they were made optional after the age of 14 in 2004. The boost provided by the introduction of the EBacc seems already to have run its course, with last year’s take up showing no increase over the previous year’s. Although I am in strong agreement with the Select Committee in welcoming the Government’s move to make languages compulsory in primary schools from 2014, this will certainly not be enough on its own to redress the country’s language deficit.

The languages taught in schools do not necessarily match the ones business says it most needs, nor do they build on the existing linguistic diversity of many pupils. Added to which, as the report says, we need a cultural shift in attitudes within businesses, too. The British Academy says businesses underestimate their current and future needs and do not invest enough in the training and management of language skills. In the light of such enormous opportunities for growth if only SMEs could scale up their language skills, can the Minister say why the Government will not consider introducing financial incentives for such training as proposed by the British Chambers of Commerce? I acknowledge the wide range of support services available through UKTI should companies know about them and have the good sense to choose to access them. However, it seems to me that something more proactive and innovative is needed if our SMEs are to seize their fair share of global growth in a sustainable way and not just adopt a quick fix approach to the language deficit.