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Effects on the European Union Economy of Shortages of Foreign Language Skills in Enterprise (ELAN)

A research study on behalf of the European Commission

CILT, along with its research partner, InterAct International, have now completed their research into the Effects on the European Economy of Shortages of Foreign Language Skills in Enterprise. The report was launched by the European Commission on 23 February 2007.

Executive summary (pdf) ¦ Full report (pdf) ¦ CILT press release (pdf) ¦ EC press release

The motivation for the study arises from the Commission's Lisbon strategy (2000) to stimulate economic growth and employment and make Europe's economy the most competitive in the world. Language skills have been identified as a key factor in achieving this goal.

The study has been contracted by the European Commission Directorate General for Education and Culture (Tender number EAC 89/04). It is intended to provide the Commission, and decision-makers in member states, with practical information and analysis upon which to base future policy proposals. It is also intended to provide practical information for European business.

The study will focus on the relationship between language skills and the economy, seeking answers to the following questions:

• What is the economic impact of language and cultural barriers on intra-European trade, and on trade outside the EU? Is this linked to the size of the company or the sector in which it operates?
• To what extent does the availability or non-availability of personnel skilled in different languages, and their level of linguistic competence, affect trade and mobility?
• What is the relative value of English compared with other languages which are useful in a business context?
• How can one measure the economic benefits of linguistic competence to trading companies and to the country's economy as a whole?
• What are the facilitating and/or inhibiting factors for companies of all sizes in trading across, and outside, Europe?
• Which communication strategies are the most effective? To what extent do SMEs differ from larger, global companies in their use of language skills?
• What measures would facilitate better communication and support the mobility of labour, goods and services both within Europe and to a wider world? What are the longer term economic implications of taking no action?
• How can intermediaries such as Chambers of Commerce help?

Limited studies so far suggest the solution for many companies is to develop a communication (or language) strategy, though few have done so. At present, we have only evaluated the presence and resulting impact of communication strategies on companies from approximately 12 countries of Europe. This new survey opportunity offers the possibility to build on the existing work and amplify the data collation to considerably more parts of Europe and thus fill the gaps in our knowledge.

Focus of the study

A survey of exporting SMEs will address and measure the following:

• lost business, or underperformance, due to deficient language skills and cultural knowledge;
• barriers to trade due to deficient language skills and cultural knowledge;
• usage of language skills by companies: range and frequency of use;
• availability of language skills to companies: levels of competence;
• the match of language skills to export markets;
• evidence of good practice in language planning and strategies (from which case studies will also be derived);
• levels of language training undertaken and intended training;
• future intentions regarding export markets both in and beyond Europe;
• recommendations for action

Methodology

• Review of previous studies (desk research)
• Quantitative survey (with pilot) of 80-200 companies in each of 29 countries, including a separate set of 30 large companies (over 250 employees).
• Qualitative survey of influencers (heads of Chambers, regional governments, business associations)
• Identification of 'best practice' company communication strategies (case studies).

Workplan (January-July 2006)

February	Create a network of researchers and Chamber contacts in each country
February-March	Review existing data
February-March	Develop and pilot questionnaire. Set up database for analysis of responses
April	Identify sample of companies
April	Send out questionnaires (e-mail)
April-May	Identify sample for telephone interviews
May	Conduct telephone interviews. Identify case studies
June	Large company survey. Complete survey
July	Analysis of data
August	Validation of preliminary results (feedback from Chambers)
September	Draft report, and further validation exercises
October	Final report to Commission

The survey sample

The main survey will comprise a four page questionnaire that will be available electronically to the exporting SMEs in the sample provided by the participating Chamber of Commerce in each country. The sample will be selected according to the following criteria to ensure the subset reflects a representative cross-section of the country's exporting community of companies:

• export profile (companies have to be engaged in export);
• destination of exports;
• sector;
• size;
• location

The final analysable sample is therefore expected to be:

1. representative of the target country's export profile (in terms of the pattern of trade destinations by country for their exported goods and services) based on official trade figures;
2. representative of the pattern of sectors engaged in export (to achieve a broad reflection of the common SIC categories engaged in export);
3. offering a cross-section of company sizes (micro-companies up to medium-sized with 250 employees); and

The final admissible sample is expected to be approximately 80-200 companies per country.

Survey of Large Companies

This stage will build on the existing work published by CILT, the National Centre for Languages (Feely and Winslow, 2005) on multi-national companies, based in Britain, France and Germany, and their use of languages for business. A representative sample of 30 large (preferably global) companies with over 500 employees operating in at least 10 countries of the world will be contacted directly by the project researcher.

Countries included in the survey

• UK
• Ireland
• Iceland
• France
• Netherlands
• Sweden
• Denmark
• Poland
• Portugal
• Bulgaria
• Belgium
• Estonia
• Latvia
• Lithuania
• Spain
• Hungary
• Czech Republic
• Finland
• Italy
• Romania
• Slovenia
• Slovakia
• Norway
• Germany
• Luxembourg
• Austria
• Greece
• Cyprus
• Turkey
• Malta

About the Researchers and Subcontractors

A local university will provide a researcher to work with the local chamber to carry out the survey using instruments developed by the subcontractors.

The Principal Investigator will be Professor Stephen Hagen, Director of Mercia Institute of Enterprise, Warwick University.

The Subcontractor engaged by CILT to carry out the research will be 'InterAct International', an international research and management company based in Newcastle upon Tyne, England, specialising in cross-border communication skills. Its major work is conducting market research and offering policy advice on the subjects of language, culture and internationalisation of business.

CILT, the National Centre for Languages is the UK government's recognised centre of expertise on languages. Its role is to support both language teaching and learning, and the effective use of language skills in business, the public services and cultural life.

Contacts

Prof. Stephen Hagen
Telephone: 07970 526569

Teresa Tinsley: Project Director
Telephone: 020 7395 0817

Derek Winslow: Project Manager
Telephone: 01527 821072