Economies of Scale in Translation

ECONOMIES OF SCALE IN TRANSLATION

Economies of scale are an often-misunderstood concept as they’re deeply rooted in manufacturing rather than services. Economies of scale are the cost advantages companies enjoy based on the scale and timespan of their operations (among other things). It is usually calculated in terms of cost per unit. If a shoe factory works around the clock, it produces more than if it only operates for 8 hours each day.  And while some costs (like electricity) flow steadily with each hour of production, fixed costs, like rent for buildings or certain machines, are divided between more shoes, therefore the cost of producing each pair (cost per unit) is smaller.

This, however, cannot be a model for services. If you order a lot of a service consuming the work of a highly skilled human, you still need a person to perform the task. You can negotiate the price based on stability of income etc, but this does not involve economies of scale.

In modern translation, the workload is shared among humans and technology, and the cost advantages you can obtain results from the scale and timespan of your translation projects. This is possible thanks to translation memory. This is a proper example of economies of scale.

TRANSLATION MEMORY ENABLES ECONOMIES OF SCALE

Every translated sentence is recorded in your translation memory and can serve as a repetition (a match) that lowers the cost of your future translations. As the scale of your translation grows, the cost per unit (the actual cost per word) becomes lower, which makes translation effectively cheaper (with rates unchanged).

All you need to do is start using translation memory.

Text: Within 3 months translation costs fall by 5-10%. After a year of collaboration the costs fall by 20-30%.

Economies of scale – case study >>

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