Page 54 - Horizon Han22

Speaking the Language of International Trade
The importance of language when trading internationally.
company trades with those countries, your commercial partners most likely would prefer to communicate in their own language.
Yes, formal meetings, negotiations and contracts must be in English, but what about when you go out for dinner? Or play a round of golf, or go to a football match, or
54. Speak the Language
The language of international trade is English.
English is, by a huge margin, the preferred language of international business communication. If a Spanish or Italian company wants to do business with a German client or a Chinese supplier, it is almost certain that all parties will reach for their English to get the job done. The dominance of English contract law, even between parties that have no connection with the UK, reinforces the position of English as our global lingua franca.
Which is great for us, being native English speakers! You might expect the UK to use this huge in-built advantage to develop industries that lead the region in international trade.
Unfortunately, that is not the case. Our trade-to-GDP ratio is dead last among western European countries: the other major economies of France, Germany, Spain and Italy are all better at international trade than we are. These countries also lead us in a key related metric: in every single other western European country, more of the population can speak a foreign language than in the UK.
A mere 34.6% of us are able to hold a conversation in any language other than English. In Switzerland, at the other end of the scale (91.7% of the population being able to speak a foreign language), it has been calculated that linguistic competencies contribute up to 10% of GNP. Even in English-speaking Ireland, 50.9% have a reasonable foreign language capability.
This lack of language skills among the UK workforce is well recognised as a structural
issue which needs urgent government attention. However, there is no reason why individual businesses cannot reap the benefits of improved linguistic competencies, even while the nation as a whole lags behind.
Where’s the ROI?
If your business trades internationally, the chances are that the vast majority of your international clients and suppliers do speak English (and probably much better than you speak their language!)
This leads many UK businesses to see corporate language training as not having a good potential ROI (return on investment). This perception could not be further from the truth:
Corporate language training delivers an average ROI of 100%.
Tactical Benefits
Even if your clients can speak English, do they want to?
The primary tactical benefit of speaking a foreign language does not lie in communicating with international partners who can’t speak English, but those who prefer not to speak English.
Among major UK trading partners, this first language preference is strongest in China, Japan, Korea, France, Spain and Italy. If your
discuss the weather with them around the water cooler? It’s in such social contexts that familiarity and trust are established and deepened: where the wheels of commerce are greased. If your team doesn’t speak Japanese, and your competitor does, who is going to have the better client relations?
UK companies’ weak language skills have been calculated to cost a massive 3.5% of GDP in lost trade and investment potential – and most of this is due to the lack of first- language socialisation.
Horizon - Taking your international trade further.
Horizon issue 2.indd 54 14/12/2022 14:50:28