THE FORUM FOR EUROPE'S LANGUAGE TECHNOLOGY INDUSTRY THE LT-INNOVATE INNOVATION AGENDA UNLEASHING THE PROMISE OF THE LANGUAGE TECHNOLOGY INDUSTRY FOR A LANGUAGE-NEUTRAL DIGITAL SINGLE MARKET www.lt-innovate.eu - [email protected]Breaking an old business model is always going to require leaders to follow their instinct. There will always be persuasive reasons not to take a risk. But if you only do what worked in the past, you will wake up one day and fid that you’ve been passed by. Clayton Christensen Professor of Business Administration the Harvard Business School “ ”
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THE FORUM FOR EUROPE'S LANGUAGE TECHNOLOGY INDUSTRY
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UNLEASHING THE PROMISE OFTHE LANGUAGE TECHNOLOGY INDUSTRY
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Breaking an old business model is always going to require leaders to followtheir instinct. There will always be persuasive reasons not to take a risk. But if youonly do what worked in the past, you will wake up one day and fid that you’ve beenpassed by.
Clayton ChristensenProfessor of Business Administrationthe Harvard Business School
Innovation Roadmap: assessing the industry’s next steps.......................................................................4Introduction..............................................................................................................................................51. The Innovation Roadmap for the LT Industry.......................................................................................6
1.1. Get identified with the LT Industry vision and mission...........................................................81.2. Turn LT Industry into a network of economic advantage ......................................................101.3. Enabling the LT value chain for establishing LT as a transversal key technology ...................111.4. Horizontal integration ............................................................................................................141.5. Integrate into a LT ecosystem through collaborative innovation...........................................151.6. Move towards a business-oriented Pan-European LT Industry..............................................181.7. Define a Go-to-market strategy for the third platform and the smart industries .................201.8. Define a new strategy for talent generation and retention...................................................231.9. Push new ventures and funding options ...............................................................................241.10. Enable a sustainable and competitive LT Industry...............................................................26
2. Where are the short term opportunities for LT?.................................................................................272.1. Our view of vertical industry markets for LT..........................................................................282.2. Selection of vertical industries ...............................................................................................292.3. Publishing / Media .................................................................................................................302.4. Retail / e-Commerce ..............................................................................................................312.5. Tourism ..................................................................................................................................322.6. Manufacturing........................................................................................................................332.7. Security ..................................................................................................................................342.8. Short term recommendations for market opportunities.......................................................352.9. Horizontal Industry Segments ................................................................................................38
3. How the Innovation Roadmap can be implemented ..........................................................................413.1. Growing the grassroots for LT innovation ..............................................................................413.2. There is a clear definition of the LT Industry and Products ...................................................423.3. Positive Market Trends underpin LT growth 8 .......................................................................423.4. There is a maturing LT product/service offering to fulfil the LT demand ..............................453.5. Characterization of the LT industry ........................................................................................463.6. What is the current state of the supply offering?..................................................................483.7. How Mature is the LT industry? .............................................................................................483.8. The LT Market Size .................................................................................................................49
4. Recommendations to align future LT Industry R&D activities with the market..................................524.1. Tactical Measures: fostering demand side innovation policy instruments............................524.2. Strategic Measures: strategic instruments and research agenda ..........................................55
Annexes ...................................................................................................................................................57I. The LT Industry Maturity Model ................................................................................................57II. Vertical industries for larger players .........................................................................................59
Figure 1: 10 Main challenges / gaps of the LT industry ..........................................................................7Figure 2: How the LT Innovation Value Chain needs to work?...............................................................12Figure 3: Flow of ideas in the LT Innovation Value Chain.......................................................................12Figure 4: European LT vendors’ cooperation paths................................................................................14Figure 5: Innovation scenarios model ....................................................................................................16Figure 6: New ICT Ecosystem affecting Europe’s ability to compete ......................................................17Figure 7: The LT needs to respond to a go to market strategy ...............................................................17Figure 9: Stages of investment capital 5 .................................................................................................25Figure 10: Impact of LT on horizontal segments .....................................................................................38Figure 11: Social Disruption due to technology .....................................................................................43Figure 12: Economic Disruption ............................................................................................................44Figure 13: IDC’s Four Pillars and Third Platform .....................................................................................45Figure 14: The European LT industry: proportion of companies active in each technology segment....46Figure 15: The European LT industry: size of company, by size of company. .........................................46Figure 16: The European LT industry: size of company, by size of company ..........................................47Figure 17: European LT industry maturity ..............................................................................................48Figure 18: Worldwide Language Technology Software & Services Market ...........................................49
Innovation Roadmap: assessing the industry’s next steps
The global language technology (LT) market is likely to be worth some €30B in 20151. How can Europe’s LTindustry gain a larger share of this market and develop into a more effective business instrument to serveunified multilingual communication requirements within the European Single Market?
LT-Innovate believes that much of the next technology wave - what IDC calls the third platform (driven bymobile devices, cloud services, social technologies, and Big Data). – will revolve around automating the pro-duction and understanding of content meaning and relevance (and not simply its technical/hardware acces-sibility and curation) for every sector of business and society. There are already signs that language technol-ogy will emerge from its current niche status and play a much greater economic role across a very wide rangeof social and entrepreneurial touch points.
This document sets the Innovation Roadmap to assess the next steps for the LT industry and also it is pro-viding the bases for the Innovation Agenda; which will also guide LT-Innovate’s overall planning for the yearsahead. The Innovation Roadmap aims at providing a vehicle for strategic planning and decision making forLT Vendors to consolidate as an integrated industry ecosystem. Thus, it yields the strategic vision to servenew and detected challenging market opportunities under an integrated scalable LT industry approach,instead of a collection of scattered companies; and thus support accelerating the process toward a matureand scalable industry stage, which will allow the LT Industry to expand, develop new products and maintainthat competitive edge in its new business environment.
This roadmap is the result of two years of discussion, research, experimentation and collaboration within theLT industry and has been developed, numerous bilateral and multilateral discussions, a number of specificLT Observatory Surveys (see D3.2, D3.3, D3.4 and D3.5) and LT vendors interviews (gathered as LT companyprofiles, see D2.1, D2.2, D2.3 and D2.4). During this period, a set of gaps from the structural, conduct andperformance points of views were identified. A gap analysis was performed and actions have been proposedto overcome them; and constitute the core of the Innovation Roadmap.
The Roadmap comprises 10 main actions that directly tackle the 10 main industry challenges, some recom-mendations of market opportunities and innovation scenarios in specific vertical activity segments and a setof strategic and tactical recommendations for the LT industry.
“Breaking an old business model is always going to require leaders to follow their instinct. Therewill always be persuasive reasons not to take a risk. But if you only do what worked in the past, youwill wake up one day and find that you’ve been passed by.”
Clayton Christensen
1 LT 2013 Report: Status and Potential of the European Language Technology Markets
A new generation of ICT markets is emerging, with digital products and services built on myriad types ofinformation and content delivered on increasingly various mobile platforms, highly integrated with public,private, and socially linked applications and data. Communication is at the heart of next-generation ICT, andinnovation is its hallmark. Connecting people and companies through the maze of Europe's languages istherefore a key pending barrier to make the Single Digital Market a reality, is connecting people and compa-nies through the huge tangle of languages alive in Europe. Overcoming these barriers is critical to Europe’sfuture competitiveness.
The sequence of financial crises and instability of the global markets suffered during last five year have putmany companies from all industries and related services in the eye of a storm. To be able to survive themounting global competitive pressure as well as to face the challenge to unleash the added-value and impactof Language Technology on Europe’s industrial, commercial and social tissues, the LT industry must under-take a consolidation process, lead under a strong and coordinated process of change.
LT Innovate believes that the combination of macroeconomic events provide a good situation to steer to bet-ter waters if the LT industry vendors properly use the LT Industry strengths to position themselves in the mar-ket and take a realistic or practical approach for seizing current opportunities from niche vertical or horizon-tal markets. Moreover, LT Innovate considers that the EU based Language Technology enabled servicesindustry can provide a solution to this huge challenge, tackle an estimated global language technology (LT)market likely to be worth some €30B in 2015 and deliver the missing block in the construction of the SingleDigital Market.
The LT Innovation Roadmap is a vehicle to accelerate large scale deployment of LT current developmentsachieved by European LT vendors as well as to draw upon the current and further R&D activities under astrategic and market centric view.
This roadmap proposes a LT Industry cluster based innovation approach, aiming to provide the basis forstrategic planning and decision making for consolidating the LT value chain, creating the transition to go“from a growing to a mature industry stage” in LT and enabling the EU to have a LT world-class technologyand innovation sector that can cope with the challenges up to 2020 and beyond.
Notwithstanding, progress needs to be driven by LT industry leaders acting jointly to construct the future oftheir own industry and consolidate as an integrated industry ecosystem. This integrated scalable LT industryapproach is needed to serve new and detected challenging market opportunities, and thus, to support accel-erating the process toward a mature and scalable industry stage, which will allow the LT Industry to expand,develop new products and maintain that competitive edge in its new business environment. This document is structured in 4 chapters, as follows: the first chapter provides the roadmap actions for theLT industry to overcome 10 main identified gaps. The second chapter provides a set of opportunities in dif-ferent vertical markets that could be approached in the short-mid-term; the third chapter provides anupdate of the LT 2013 report on trends and the LT industry and the last chapter provides the recommenda-tions to align the future R&D activities with the market.
The Innovation Roadmap comprises 10 main actions that serve as a basis for strategic planning and decisionmaking; each action of this roadmap directly tackles a challenge to be overcome by the LT Industry in orderto reach the needed convergence effect, the presence of complementary economic activities, enhancedincentives, reduce barriers for higher growth, innovation, start-up survival, new business creation and high-er employment.
The following table comprises the 10 gaps that represent the non-technological challenges where efforts areneeded to support the harmonisation and consolidation of the LT Industry. Hence, each challenge has beentailored to a required action, bringing together a set of 10 activities that constitute the LT InnovationRoadmap.
Overcoming these challenges is not an easy task; it will probably take four to five of years and establish theproper scenario for collaboration and cooperation that get LT Vendors on the road of Europe becoming apredominant player in LT industry. In the following image shows the 10 gaps over which LT Innovate havesupported the roadmap, based in the relationship of the level of impact in a short-long run (timeframe)
10 gaps / challenges 10 Roadmap Actions
Lack of common vision and clustering umbrella Get identified with the LT Industry vision and mission
Fragmentation of the LT Industry Turn LT Industry into a network of economic advan-tage
The value chain is broken or inexistent Enabling the LT value chain for establishing LT as atransversal key technology
Lack of collaboration among LT Vendors Horizontal integration
Deficit of technological and linguistic resources stan-dardisation
Integrate into a LT ecosystem through collaborativeinnovation
European LT focus on technology / product Heading towards a business oriented Pan-EuropeanLT Industry
Inadequacy of the proper marketing strategy Define a Go-to-marketing strategy for the third plat-form and the smart industries
Talent scarcity Define a new strategy for talent generation andretention
The lack of funded seed Increase new ventures and entrepreneurs (seedfunds)
Lack of European Competitiveness Enable a sustainable and competitive LT Industry
Figure 1: 10 Main challenges / gaps of the LT industry
The LT Innovate roadmap resulted from continuous discussions, workshops, multilateral meetings and qual-itative as well as quantitative surveys performed at different industries and consumer level during last twoyears. This information has been detailed in previous reports (LT 2013 Report) and project deliverables2, andupdated as well as summarised in the chapters that explain the opportunities for LT and why LT innovate canbe implemented.
In addition the LT Innovate roadmap takes in account and links to the structure, conduct and performance(SCP) paradigm, used as an analytical framework, to make relations amongst analysing markets and the LTindustry. Taking also in account the trends analysed in the LT2013, we have identified that the following gapscould be classified according to their nature as structural as follows:
• Structural: the market structure of the LT industry provides the indicative degree of competition andreflects the efficiency, as well as the way LT vendors reach the market. Thus having the view of largescale data interaction, will allow data integration, scalability and standardisation in the industry. Thesestructural factors also include the view of the long term information life cycle that supports large scaleintegration and standardisation (from acquisition and management to visualisation and provision andlocalisation in different languages to be used), so structure of suppliers, product differentiation anddiversification can be done over technical standards with network or coalition externalities. Thus, LTVendors not only will head towards the same objectives under a set of that will need to coexist, but alsoare free to choose their degree of technical compatibility with competitors based on standards, and theintensity of competition will depend on the strength of the network. Structural gaps comprise:
o Lack of common vision and clustering umbrellao Fragmentation of the LT Industry
• Conduct: the nature of this facture deals at organisational level of the organisations and preparationfor competing in Europe based in a behavioural twofold: interdependence and scalability of organisa-tions within the LT industry. According to ongoing trends such as Big Data or Future Internet the amountof data scopes industry users are already going through organisational issues, as they need to expandtheir system's capacity and make up-front commitments. Correspondingly, at the LT industry side theorganisational issue is derived from the need of providing greater availability and scalability for theirhigh-end market applications, as well as a need of systems with leading technology vendors. Throughscalability of products in the LT industry their end users/customers will be able to incrementally addsmaller, standard systems as needed, for meeting their needs, while greater interdepended will leadtowards a more strategically behaviour. The Conduct depends and affects the structure of the industry.The conduct oriented gaps comprise:
o The value chain is broken or inexistento Lack of collaboration among LT Vendorso Deficit of technological and linguistic resources standardisationo European LT focus on technology / product
• Performance: the nature of these gaps is given by the need of rising efficient outcomes in the industry.The performance is based on the capabilities of LT Vendors and its potential of generating value-basedoutputs, e.g. powerful algorithms for knowledge handling and processing, as well as technology com-binations (e.g. speech and translation). The actual performance of LT Vendors in the market affectsmarket structure – e.g. rising dominance of best performing vendors. Performance gaps comprise:
o Inadequacy of the proper marketing strategyo Talent scarcityo The lack of funded seedo Lack of European Competitiveness
Notwithstanding, taking in account the nature of the gaps, we can see that they could happen in parallel andthus the following steps of the roadmap could be also approached in parallel. However, in the following sec-tions we firstly present structural gaps, followed by the scalability and performance ones; as we believe thisis how they naturally present in a timeline; from short to long term.
1.1. Get identified with the LT Industry vision and mission
The gap: Lack of common vision and clustering umbrella
Currently many LT companies not yet see themselves part of the LT Industry; they only see themselves posi-tioned in the marketing segment where their products, tools or services compete (outcome based segmen-tation; e.g. voice enabled, CRM, business intelligence, automatic translation, etc.). There is a lack of critical mass towards a clearly recognisable industrial identity as well as deficit of a cluster-based strategy and vision, and thus a shortfall of a networked industry which also generates:
• Lack of vision of technological convergence of LT technologies, common goals and strategy alignmentas an industry
“Connecting people and companies through the maze of Europe's languages is one ofthe most challenging barriers to achieving the Single Digital Market. Overcomingthese barriers is critical to secure Europe’s future competitiveness”.
• Lack of information about the sector and collaboration between and with European LT regional leaders,decision-makers, and stakeholders for reaching a mutually beneficial path for LT growth and develop-ment in Europe.
• Lack of technological investment protection• Potential loss of competitive advantage• Loss in resources to create communication and collaboration bridges• A fuzzy LT Technology map that comprises the significant steps for required research, development and
demonstration activitiesIn such way, while LT-innovate has made the first step to define and promote a common vision, many com-panies are yet to adhere to this vision.
The roadmap action: Get identified with the LT Industry vision and mission
The connection of LT companies within the LT Industry umbrella, the innovation cluster based segment con-cept and common vision approach, needs to be stimulated. By creating an active connection and belongingsentiment towards a linked LT Industry cluster, we will be generating a convergence effect on complemen-tary technologies and economic activities (vertical and horizontal LT industry convergence) that will fosterthe growth rate of the LT industry within Europe by increasing it in the size and “strength”.
During the consolidation of the LT Innovate Forum, the concept and scope of LT emerged and was definedfrom three markets with common scientific and technological roots: Intelligent Content which enables infor-mation access and analytics, Translation Technology which enables multi- and cross-language content pro-cessing, and Speech Technology which enables natural human interaction. The consolidation of these “seg-ments” brought together the synergies and potential of these technologies as an industry with an estimat-ed global market for LT software and services by nearly €20B in 2011, and predicted to grow to nearly €30Bby 2015 with CAGR of 11.4%; one of the fastest growing software markets3.
Now the necessary combination and coordination of the range of these LT technologies in the market needto take the form of common actions to really meet in a competitive way the current and future needs of thedifferent industries and make that European LT Vendors can take a large piece of this €30B (2015) market.In addition, the coordination and consolidation of LT Vendors can support the booming of a new and soundecosystem in the LT industry, comprising a group medium-sized, world-class EU-based companies that act asdriving forces of cooperation clusters integrated in a demand-driven value chains.
In Europe we do not have a Silicon Valley; but by creating a European LT Industry cluster of LT companies,we believe that Europe could drive the direction and pace of innovation in LT, generating a regional compet-itive advantage for this industry. Under this thinking, the LT vision for the LT industry currently participatingin LT-Innovate is that “The European LT industry will build the foundation for a language-neutral EuropeanDigital Single Market before the end of the decade, creating added value with significant impact on indus-trial, commercial and social issues in the EU”.
The LT strategy should cover the main areas of collective effort: market development, innovation in LT indus-try offerings and business models, new forms of partnering to develop European-scale products and servic-es, enabling government policies and support programmes, and the information and communication sup-port resources to be deployed; which are suggested in this roadmap and aim at articulating a set of collec-tive actions related to/aimed at:
• Promoting the industry as a whole in the most promising target markets;• Building the case in favour of a language-neutral single digital content and communication market in
3 LT 2013 Report by LT Innovate (http://www.lt-innovate.eu/resources/document/infographic-lt2013-report-status-and-potential-european-language-technology-marke )
Europe;• Developing strategic and tactical alliances within the industry, based on language and/or technology
domain, customer type/market segment (as appropriate) to address the most compelling marketopportunities;
• Supporting portfolio pooling and productization to allow European LT companies to stand a betterchance in global markets;
• Sharing knowledge, leveraging the usage of key resources/infrastructures/tools, and pooling comple-mentary skills/capacities for market development;
• Supporting the public policy-making process and influencing all relevant high-level policy documents,regulations and support programmes that affect the LT sector and its markets;
• Monitoring the LT industry progress towards The Vision using appropriate indicators.
1.2. Turn LT Industry into a network of economic advantage
The gap: Fragmentation
LT industry is a deeply fragmented industry that has significantly independent companies providing productsand services in translation, speech and intelligent content. LT does not work as a collective endeavour basedon industry proposals, but as independent nodes with no common industry goals, actors that do not knoweach other in many cases, focused on survival and on the R&D and technological side of the products.
LT-Innovate have taken the first steps for cooperation creating not only a consistent, homogenous vision andunderstanding of this market, but also an umbrella that gathers more than 500 LT European vendors, pro-viding ways to communicate and share interests. These 500 LT European vendors are a large part of the soft-ware vendors’ suppliers in Europe, as they represent 2% of the software producers. However, as they do notplay as an industry they are a very fragmented industry with small size players and insular culture.
Many talks get “bogged down” (at stand still) to the following platitudes: "We have to move forward", "Weall want the same thing" or "This has been a useful discussion"; however, yet remains a long way to reallycreate the scenario where the all these LT Vendors, which are mainly SMEs, consolidate, integrate and coop-erate in technology initiatives or co-creation of language resources.
The action: Turn LT Industry into a network of economic advantage
The collaboration among EU based LT vendors is one of the cornerstones. To address the global challengesof building up a Single Digital Market, LT vendors have to operate on global basis, exceeding in most casesthe capabilities of single players.
Active connections in LT industry are seen as the ability to turn the power of the network into economicadvantage. Perhaps the most significant, and potentially far reaching, trend in the LT industry is the conver-gence of language technologies themselves (Intelligent Content, Speech and Translation technologies) asone. The “segments” dealt with in this market forecast are an artefact of the history of the technologies andtheir deployment in the restricted environments of earlier years. The LT industry found a shape “before itstime” and now is challenged to restructure and innovate on many fronts, not just technological.
Thus, collaborate under a cluster-based umbrella can be seen as an active and participatory collaborativestrategy that relies on a well-connected network. The level of connectedness / collaboration, within a clus-ter is higher as the collaborative links on the network between LT Vendors grows; and as a consequence theproductive capacity and interaction also increases.
In this regard LT Innovate vendors and LT industry leaders need to act jointly to construct the future of theirown industry, while focus and align the efforts of the LT Vendor cluster community and industry in order toachieve common goals and to create a critical mass of activities and actors, thereby strengthening LTIndustry and innovation on a mix of technologies that will add most value to the targeted industries.
Furthermore, strategic collaboration in a cluster (strong and coordinated collaboration as part of a processof change and path to industry maturity) must extend beyond the boundaries of the LT vendor communityso that cooperative links can be forged with other stakeholders. These include four scenarios among keyallies:
• Collaboration with other LT Vendors (e.g. collaboration among vendors from different LT areas, such ascollaboration among speech, intelligent content and translation vendors).
• Collaboration among LT Vendors and other ICT products/services suppliers (e.g. collaboration betweenan LT Vendor and hardware supplier or between an LT Vendor and large integrators).
• Collaboration among LT Vendors and Applied Research Centres.• Industry players (buyers).Examples of benefits from above collaborative schemes are: • LT buyers in the most promising market segments to explore future innovation scenarios together.• Specialised clusters of SMEs, by advocating public and private incentives for the “Europeanisation” of
mature national SMEs and support for innovative forms of trans-European cooperation between SMEsto overcome the fragmented market.
• The LT applied research community to drive coordinated lobbying actions regarding issues such as infra-structure, technology transfer or intellectual property rights; while identifying existing technologybuilding blocks and research results to be transferred to market actors.
To implement innovation within the LT industry, diverse “avenues” need to be addressed and assessed, as“one size DOES NOT fit all”. Some example learned from discussing these subjects with LT players include:
• Work on separate by complementary components of a large-scale, vertical or horizontal market real-world problem.
• Approach different innovation focus that enrich LT: Marketing, Technology, Business model(s), HRresourcing or any other.
• Extend on each other capabilities vertical and horizontal segments, geographic languages orhybrid/cross
1.3. Enabling the LT value chain for establishing LT as a transversal key technology
“For every action there is an equal and opposite reaction.”
Isaac Newton
The gap: Broken value chain
Usually, the value chain follows a similar principle than the exposed above from Isaac Newton. An enabledvalue chain is about cultivating ideas and allowing a flow of ideas through all the stakeholders of the valuechain in order to respond to driving needs, hence there is a flow of cooperation at its various chain stages.
In the software value chain, usually partners are slow to adopt new solutions, thus companies offering soft-ware products and service usually should look for collaborating with those that offer complimentary servic-es and development environments. In the LT value chain we usually find the four main types of stakeholdersthat interact in a bidirectional path research to market and market to research:
• R&D at public/private level, and spin offs from Universities with very specialised products, good tech-nology and lots of very good ideas
• SME Software Vendors with core technologies and applications looking to gain competitive advantagebreak in to new markets and grow revenues
• Consultancies/Integrators, Independent Software Vendors and partner channels, who usually have spe-cific customer business requirements to address
• Medium and large software and IT vendors that approach the different industries (vertical market trad-ing communities) which implement next-generation and large solutions, brokering and/or embeddingcore technologies in enterprise or departmental solutions; and which are looking to drive significantfinancial returns and deliver business benefits at enterprise level
Figure 2: How the LT Innovation Value Chain needs to work?
For the LT value chain to be enabled the ideas and requirements need to flow back and forth as shown in theimage below, placing the customer or trading partner at the core of the value chain to add value through itand generate an industry vertical integration.
Figure 3: Flow of ideas in the LT Innovation Value Chain
As the LT value chain is broken there is no “interlinked” flow of ideas and information in the Innovation ValueChain; and thus:
• No communication between Academic (no business research oriented), LT vendors, integrators (igno-rance of LT) and consumers (lack of awareness of value)
• No real technology transfer • Research is being symbiotic and evolutionary in an “insular way” for a long time• No serendipity, no problem oriented or targeted (challenged) research LT Vendors are the key fig-
ure to align R&D initiatives with business challenges
Thus the real problem is the “Ability to deliver through the value chain.” The industry enjoys a profusion ofspinoffs from European university research, many based on technology developments with specialised LTtechnologies that continues to flow into the industry but with little or no-escalation and maturity, as well aswith a single focus on one segment of LT (not yet moving to converged and combined LT). So acquisition ofsmall companies by major (mostly but not exclusively US) companies is a notable feature of the Europeanmarket, but not globalisation, matureness and market escalation.
Europe stands out for generating high quality R&D and innovative LT with much specialised products, goodtechnology and lots of very good ideas. We can find many market leaders and pioneers in the LanguageTechnology industry with deep European roots. Among which we can find: a) SAP (DE) as the market leaderin the analytics applications and Exalead (FR) as leader in search and analytics; b) Nuance which is a globalplayer in speech technologies and grew out of the L&H Belgian company and has acquired many Europeanspeech companies (e.g. Loquendo –IT- and SVOX –CH-); c) SDL (UK) that is market leader in translation andSystran (FR) that is pioneer in machine translation.
However, the fact of no-escalation and scarcity of LT convergence (lack of upstream, downstream and bal-anced vertical integration in the value chain) generates a lack of “business objectives” and requests fromdemand side for the developed R&D; and in consequence:
• Many companies without marketing vision for delivering R&D to the industry, and many LT Vendors inR&D developed LT functionalities/tools/solutions or new services, with no strategic fit on the market.
• There is lack of awareness and of image through the value chain (lack of awareness of innovative LT inintegrators or partner channels).
• There is a research agenda “mainly” led by universities for a long time, with many innovative conceptsand technologies that never are uptaken by LT stakeholders, but never die as they become a push tech-nology concept for R&D but not to pull value chain interaction.
• There is an inadequate screening of funding and low integration of venturing schemes
The action: Enabling the LT value chain for establishing LT as a transversal key technology
Far from being niche technologies, LT is as strategically relevant and important for Europe as Cloud. One ofits key roles will be in enriching and leveraging Big Data. The Digital Single Market for content, the FutureInternet, and trans-European services will all depend on the translation technology component of LT to helpovercome language barriers, which is why LT is currently being reappraised as key enabling technology for amultilingual continent like Europe.
By stimulating a strong and coordinated collaboration within a cluster-based approach, and in consequenceharmonised cooperation among LT vendors (links of the cluster) as well as with other stakeholders, the LTindustry will be creating “real bridges” across the entire LT generic value change.; i.e. from applied researchon the one extreme of the value chain, to the industry buyers/consumers on the other extreme of the chain.Notwithstanding, different levels of cooperation among value chain stakeholders, will generate develop-ments and demand within the innovation generation cycle of the value chain:
• Approaching functional gaps between customers’ needs and existing LT offerings.• Closing these gaps by developing innovation projects led by LT vendors.• Dramatically improve awareness of LT among targeted market segments.• Develop new initiatives integrating complementary technologies.• Guide applied researchers by translating market demands into new research challenges.
Figure 4: European LT vendors’ cooperation paths
1.4. Horizontal integration
The gap: Deficit of technological and linguistic resources standardisation
Horizontal integration strategies should be pursued by a LT Vendors in order to strengthen its position in theindustry as well as to gain scalability. The vendors that implement this type of strategy usually collaborate,merge or acquire another company that is in the same production stage.
Lack of collaboration among LT Vendors derives on no strategic moving at the same level of the value chain(i.e. no horizontal integration, alliances or organic growth among LT Vendors). This lack of collaborationbrings:
• Fragmentation, lack of economies of scale and scope, defence against substitutes (e.g. coming bigdata), fulfilling customers` expectations, synergies or increased negotiation power with big IT players.
• Players in other levels of the value chain, such as integrators have expectations on the LT potential. • Lack of creation of common resources • Lack of identify shared problems
The action: Horizontal Integration
Horizontal integration in LT will not only make easier to experiment with mixed LT technologies (e.g. speechand translation), but also smother transitions with rollouts or test environments, centrally managed andautomated integration capabilities, orchestration processes in the cloud, economies of scope (sharingresources) or economies of scale to compete at European or international level.
By establishing horizontal integration, LT Vendors can best:• Organise co-operative projects to develop common language resources for the Cloud (enticing resource
owners to pool them and fill in the gaps);• Build generic services/middleware, language resources, content management & aggregation tools into
links to broadband networks through the Connect Europe Facility;• Promote common standards and open-source resources and software as the basis for value-added
products and services;• Forge strong negotiating power to set partnerships between telecom operators, innovators and con-
tent/data owners.• Increasing a cross service offering • Consolidating complementary technologies (semantic, voice/speech and translation). The demand side
thinks that services provided altogether are the future and respond better to their needs.
The European Language Cloud (ELC) and boosting standardisation in LT as building block for innovation• “The European Language Cloud (ELC) can be seen as a catalyser on the fragmented language technol-
ogy landscape and result in greater Europe-wide standardisation of LT resources, products and servic-es. European-scale projects delivering industry specific “customer-centric knowledge platforms” couldthen plug into the ELC and contribute to further standardisation. Finally, efforts currently under way instandardisation bodies could benefit from these developments and be further encouraged by publicprocurement requiring solutions based on international or European standards.
• Standards are required at various levels in the global hardware and software environment to ensuresmooth connectivity and interoperability in a complex world of competing IT products. In this regardELC will focus its energies on ensuring interoperability for all players between all systems involved inproviding resources, services, and products. The ELC will deploy and apply the most practical andadvantageous standards used in various IT industries, covering networks, platforms, content exchange,translation resources, speech interfacing and more. It will also engage in continual dialogue with allstandards-setting bodies to ensure the simplest pathway to applying useful standards in real-world set-tings.
1.5. Integrate into a LT ecosystem through collaborative innovation
The gap: Lack of vertical collaboration
LT vendors still function as independent units, without a perspective of seen themselves as part of a networkor ecosystem, i.e., software vendors are depending on service and software suppliers, value-added-resellers,pro-active customers who build and share customisations, and many others. Software vendors now have toconsider their strategic role in the software ecosystem and introduce many new research challenges on botha technical and a business level; for example they need to go over the challenge of opening up their prod-uct interfaces, the exchange of information, resources, and/or artefacts.
The action: Adopt innovative collaborative schemas
In order to adopt better vertical integration, new collaborative schemas that set an ecosystem as a set ofvendors functioning as a unit and interacting with a shared market for software and services, together withthe relationships underpinned by a common LT market.There are four innovative cooperation schemas: Open Alliances, Open Ecosystems, Proprietary Alliances andProprietary Ecosystems which can be defined as in the hereunder image.
Figure 5: Innovation scenarios model
In addition the innovation scenarios change according to the type and size of collaborators:
According to the type of collaborators we have scenarios of innovation: • Among Researchers (Academia + Academia): to increase serendipity, break through and targeted
research and time to market• Among LT Vendors and other stakeholders of the LT value chain: this collaboration aims at:
o Increasing control over suppliers and/or distribution channelso Reducing costs and improving efficiency o Reducing turnaround time
According to the size of collaborators we have: • Asymmetric Innovation: among peers or organisation with large differences in size and capabilities• Symmetric Innovation: among peers or organisations with similar size and capabilities
New generation of products in the cloud
The new generation products and services look for engagement by adding intelligence to the ICT infrastruc-ture, employing Language Technology as a core piece of the puzzle. Through intelligent interactivity usingspeech technology, managing Big Data with analytics, new paradigms for linking users and information withsemantics, and crossing the boundaries of language to do all these things, LT is baked into the future of ICTin the mobile/social/global world of computing.
Figure 6: New ICT Ecosystem affecting Europe’s ability to compete
The impact of Cloud, Mobile, Big Data and Social Business on the LT value chain is still far to be completelyunderstood and well-defined as applications and services in the new ecosystem are emerging, many still atthe consumer “long tail” stage of development, and the age of on-site IT using licensed Enterprise softwareis far from over.
What is clear is that all major global software vendors are developing cloud strategies and being directlychallenged by new entrants. These are the conditions in which LT companies operate and they will influencethe future direction of the industry.
Figure 7: The LT needs to respond to a go to market strategy
1.6. Move towards a business-oriented Pan-European LT Industry
The gap: European LT focus on technology / product
LT offers many possibilities, but European LT marketers should focus on people and business applicationsrather than technology.
The virtues of LT are well established as noted in the LT Report 2012. From biometrics to social media ana-lytics, the possibilities are exciting and endless. The impact of LT on industries is clear: it will help them tobecome smarter.
While from LT-Innovate point of view, LT is the enabling technology behind the IDC's third platform, there aremany steps to be taken before that happens as the existence of this roadmap is highlighting. There is animportant principle that LT marketers have to apply as soon as possible. Forget technology: focus on peopleand business applications with the advent of unstructured data from smartphones, tablets, social media andsensors.
Up to now, the wider group of SMEs companies that are part of the European LT industry has focus on tech-nology and R&D. As it has already been noticed, the LT industry has traditionally been characterised as aresearch and development intensive industry.
There is a lack of integrators evangelisation: From focus groups, it mainly follows that (1) firms know tradi-tional language technologies such as voice recognition, data mining and social network and semantic analy-sis, and (2) they are far from knowing specific applications (both vertical and horizontal) that can generate ahigher value, for example, the application of machine translation for content security. In this direction, morework is needed not only to forge closer ties with leading technology integrators but also to create compellinghigh-valued business cases for companies. The latter will not only provide support to the integrator in its roleas an evangelist and as sponsor but it will also facilitate go-to-market strategies to specific industries havinga clear message.
In the particular case of machine translation, the entrance of new players such as Google or Microsoft thatoffers linguistic APIs to third parties is not helping the market as diminishes the value of this technologybeing a free service. As a result no only the customer is not able to perceive all the potential benefits of LTneither the integrators a key piece in the value chain.
Therefore, the increasingly informed customers and users play against the LT industry creating a culturalbacklash when the “wrong message” about “not ready” technology and its “right potential usage” gets tothem. Examples such as Google and its translation mistakes provides an image that the technology is notready for prime time; the broken promises from intelligent content technologies are deeply rooted in theenterprise market; or speech services that sounds still unnatural. Only real success examples could changethe trend among the new more savvy consumers and enterprises.
LT-Innovate has found that the concentration on technology has created significant barriers to the creationof the right European LT ecosystem. Some of the effects are broken or inexistent value chain; low under-standing of customer needs; incoordination between research, LT vendors and integrators; lack of customerorientation; integrators don’t know the value of LT and can’t educate the customer; or LT perception as frag-mented industry by integrators (translation is not speech is not intelligent content).
Hence many LT vendors still have the need of finding particular use cases for specific business processes andindustries. Since the benefits of language technologies are optimised when combined with other technolo-gies (e.g. personal virtual assistant are a combination of speech, mobile and cloud technologies) and specif-ically applied, LT vendors should identify precise market needs and determine how language technology can
help these segments. Once built the right message, they can work on the next step: increase awareness bycompanies and consumers of how LT can help transform their processes and cope with these disruptivetimes.
Hence, the big problem becomes the lack of customer needs knowledge, creating a gap between the supplyand the demand. LT-Innovate in this document provides crucial information to LT vendors to know which thekey needs for a certain industries are.
Therefore LT-Innovates thinks that is extremely urgent to address the deficiency of customer orientation.
The action: Head toward a customer / business centric Pan-European LT industry
If the European LT industry wants to be more competitive, it is required to define a new strategy for captur-ing the customer mind-set and attention, which means to create a customer centric business-oriented strat-egy.
Being customer centric is different from being customer focused. Customer centric means to use customerdata for better understand and segment your current and potential customer base, identifying your bestcustomers, focusing your products and services for the best customers and using customer life cycle to pro-vide foreseen changes/updates of your products/services. Being customer focus means to provide a consis-tently and great customer experience.
LT innovate recommends to the industry:• Back to the basics: every company must get the four Ps (product, price, promotion and place) under a
demand driven approach, centring and be able to answer questions like this:o Which type of potential customer do we want to appeal to?o What do we hope to get from our potential customers?o What are our potential customers’ needs?o Can we meet the needs through our products and services?o Who are our competitors? Does it make sense to join up with partnership?o Can we provide a quality product/service to meet the needs cost effectively?o What are the best ways to let our markets know what we can offer them?
• Identify which vertical / horizontal business solutions could be provided: Use the market knowledgethat this document provides as the backbone to redefine your marketing strategy and customer orient-ed strategy. The early involvement of marketing is essential in order to support product differentiation,build-up competitive advantage, position the brand, product and services. The LT industry must shiftthe technological focus towards to a business-oriented approach. The sooner the LT vendors identifyspecific vertical and horizontal needs to be solved by LT, the easier to create a compelling message andwork for developing a sustainable and competitive European industry.
• Educate the value chain: From focus groups, it mainly follows that (1) firms know the traditional lan-guage technologies such as voice recognition, data mining and social network and semantic analysis,and (2) they far from knowing the specific applications (both vertical and horizontal) that can generatehigher value; for example, the application of machine translation for content security. In this direction,more work is needed not only to forge closer ties with leading technology integrators but also creatingcompelling high-valued business cases for companies. The latter will not only provide support to theintegrator in its role as an evangelist but it will also facilitate go-to-market strategies to specific indus-tries having a clear message. LT vendors must educate integrators, managers and even themselvesabout LT and learn how LT will be a strategic driver for competitive advantage in organisations in manyindustries. This means to be familiar with the fact that the real potential of (big) data only can beachieved through LT. Therefore, business leaders and CIOs must develop and continue to nurture abroad perspective, become comfortable with the complexity that is inherent in data and become adeptat making the complex easier to understand.
1.7. Define a Go-to-market strategy for the third platform and the smart industries
The gap: Inadequacy of the marketing strategy
European LT industry is characterised by having a marketing strategy focused on the product technicalaspects, failing to create awareness about the potential business applications. This is a general statement forthe industry, but product and brand marketing failures occur on an ongoing basis to varying degrees withinmost product-based organisations. While the marketing could be a complex process, the use of metrics tomeasure success rate can help to learn from product and brand failures so that future product development,design, strategy and implementation will be more successful.
In some situations a marketing approach based on technical features could make sense, but to a certainextent. Many LT vendors provide a rich and accurate technical product portfolio description describing algo-rithms; theorems and academic articles considered for product development that it is far beyond thanexpected for potential business customers.
Although the major problem LT companies are facing is awareness due to a lack of marketing strategy, it isjust one of a long list of product and brand failures. Each failure can be investigated from the perspective ofwhat, if anything might have been done differently to produce and market a successful product rather thanone that failed. In fact, LT Innovate has observed during the last two years that many LT products could beconsidered a failure, or just a partial success, when its presence in the market has led to:
• To fail realising the required market share to sustain its presence in the market;• To achieve the anticipated life cycle as defined by the organisation due to any reason; or,• To obtain profitability.
The lack of marketing strategy is in the end the ultimate reason for these failures. LT innovate has discoveredthat:
• Many European LT companies don’t have a marketing department / specific role. • They rely many times in internal knowledge, and just some of them work with an external PR agency.• They don’t have market data and most of times it’s not clear which is their addressable market.• Few companies provide public success stories to support product success.• On top of that, most of LT vendors use social media just for presence rather than creating a conversa-
tion or engaging the customer. Having presence in the main social networks such as Facebook, Twitteror LinkedIn without the right social media strategy won’t produce any potential benefits rather thatspend time and resources.
What is true is that failures are not always the result of substandard marketing strategies. Product could bebecause of analysts’ opinions or competitive actions to just name a few.
In our particular case, many European LT companies have little engagement with press and analysts andcompetitors in other areas, such United States, have better marketing strategies.
The action: Define a Go-to-marketing strategy for the third platform and the smart industries
LT companies need to define marketing strategies to find exactly their product niche and adjust this strate-gy to the maturity level of the industry. The European LT industry needs to reclaim the right marketing strat-egy by defining a marketing strategy for the third platform and the smart industries.
Defining a go-to-market strategy requires a mix of art and science and it is not exempt of potential failures.The following image illustrates steps for a go-to-market strategy. In this sense, LT vendors should be able todefine their design and delivery capabilities (as shown in the image below) for the new information age; inparticular, the starting points are identification of potential markets (provided by LT-Innovate during the last
two years by reviewing trend data, industry groups and segments, conducting workshops and focus groups,etc.), share the LT vision and based build a value proposition (work to be done by LT vendors) to approachthe market.
Figure 8: Structure of a go-to-market strategy.
Source: LT Innovate4
For defining design capabilities (based in the market research insights), LT vendors need to focus in issuessuch as:
• How will the service be delivered?• Why do clients need this service?• Why will clients buy the service from you?• How will activities such as hiring, marketing, and training affect the ability to deliver during the start-
up phase of the new service?• How will the strategy evolve after the start-up/next phase?
For defining the delivery capabilities the LT vendors need to focus in issues such as:• Define how the organizational structure needs to be changed to accommodate the new service.• Identify the new skill sets that need to be developed to sell and implement the service.• Outline the marketing activities needed to generate awareness in and to create leads from the target-
ed market/client base.• Determine the tools and systems required to support operations.
As part of the go-to-market strategy, LT innovate recommends to the industry:• Recognise marketing importance and create marketing roles: Having the best LT product is not enough
if LT companies are not able sell it. In that sense, it is not enough having a sales force and it’s requiredto define properly a marketing plan for the product identifying clearly the customers, the message, thechannel or the price. So, the initial steps are recognising the importance of marketing in the salesprocess, defining specific roles and allocating the proper budget.
4 Based in report from Bain and Company. Mark Kovac, Dianne Ledingham and Lewis Weinger. Creating anadaptive go-to-market system
• Define a marketing strategy for the product and measure the success rate for every action: The abil-ity to identify key signs in the product development process can be critical. If the product should makeit this far, assessing risk before the product is marketed can save an organisation’s budget, and avoidthe intangible costs of exposing their failure to the market. A proper strategy will help to reduce someof the following pitfalls:
o High-level executive push of an idea that does not fit the targeted market.o Overestimated market size.o Incorrectly positioned product.o Ineffective promotion, including packaging message, which may have used misleading or con-
fusing marketing message about the product, its features, or its use.o Not understanding the target market segment and the branding process that would provide the
most value for that segment.o Incorrectly priced—too high and too low.o Excessive research and/or product development costs.o Underestimating or not correctly understanding competitive activity or retaliatory response.o Poor timing of distribution.o Misleading market research that did not accurately reflect the actual consumer’s behaviour for
the targeted segment.o Conducted marketing research and ignored those findings.o Key channel partners were not involved, informed, or both.o Lower than anticipated margins.
• To create business-oriented content related with how LT product solve a specific business problem:in the third platform, the four pillars are combined in a unique and specific way to solve business issues.LT innovate believes that LT, as an enabling technology, should follow the same approach to the mar-ket. The current situation requires not only to identify who are our customers but to approach themwith a clear and specific business solution and case providing information about ROI and time-to-mar-ket.
• To establish a content marketing strategy: Content marketing is becoming a primary strategy to solvethe challenges of massively scaling and diversifying marketing channels. As content does not naturallyscale but data does, data marketing is the next step as the core strategy for modern marketing. LTInnovate believes that LT industry is in the perfect place to use data marketing, as it requires from intel-ligent content technologies. Data marketing means to use interactive data to directly influence or addvalue to your prospects, customers, and partners and can help to improve to link marketing and salesstrategies:
o Customer engagement – who's interested on what (product) and how often from the websiteo Customer transactions – deal registration, order submission, billing update, MDF reconciliation.o Execution– the number of leads their marketing has produced, how leads are progressing
through their pipelineo Social interactions - groups they join, how they participate, what SMEs they interact with.o Performance data – closed deals, order value.
1.8. Define a new strategy for talent generation and retention
The gap: Talent scarcity
While LT talent shortage has not been measured, it follows a similar pattern and it is linked to the talentproblem for Big Data. The LT expert requires knowledge in several domains such as linguistics, computing sci-ence and statistics, which are hard to find combined and it takes time to acquire them. This has been just amajor problem, but Europe with many doctoral programs as a result of a continuous public funding strategyin the LT industry have solve this issue. However, some of these domains intersect with the ones needed fora data scientist, a crucial role for Big Data Industry. So it's probable that many LT experts will shift to Big Datacompanies or start-ups, industry that is living its momentum. Therefore it is expected that talent scarcity willbecome an important drawback.
The action: Define a new strategy for talent generation and retention
If the European LT industry wants to retain talent, it is required to define a new strategy for talent genera-tion and retention. Moreover, this strategy has to be deeply linked to a communication and business-orient-ed strategy.
LT innovate recommends to the industry:• To create a compelling message to help the market to understand why LT is as important as Big Data:
LT vendors need to help organisations realise the full potential of LT. HR and talent management pro-fessionals must understand the fundamentals of LT, why it matters, and what skills organisations willneed to analyse and interpret the large amounts of unstructured data they collect.
• To embrace Big Data: Many of the problems that LT can solve require combining LT and Big Data tech-nologies and most of the times to extract real value from data it can only be achieve using LT. Real datafrom the real world tends to be messy, unstructured and difficult to represent as it can be locked in aphone call, a video, or an email. Embracing the technology convergence can help to raise the value ofthe LT industry and retain talent.
• To focus on business solutions: The LT industry must shift the technological focus towards to a busi-ness-oriented approach. The sooner the LT vendors identify specific vertical and horizontal needs to besolved by LT, the easier to create a compelling message and work for developing a sustainable and com-petitive European industry.
• To educate the value chain: LT vendors must educate integrators, managers and even themselvesabout LT and learn how LT will be a strategic driver for competitive advantage in organisations in manyindustries. This means to be familiar with the fact that the real potential of (big) data only can beachieved through LT. Therefore, business leaders and CIOs must develop and continue to nurture abroad perspective, become comfortable with the complexity that is inherent in data and become adeptat making the complex easier to understand.
• To develop creative talent retention strategies: As big data analysts and business leaders who under-stand big data will be in high-demand and ripe for poaching, LT vendors should anticipate this talentshortage and adopt a more aggressive recruitment strategies. They should think outside the box andbecome more creative in recruiting for the skill set that LT requires. Retaining the talent will become achallenge, so LT vendors should consider compensation, incentive, and recognition systems designed tokeep this talent within the organisation.
Europe keeps on losing its position in the IT industry. Since many years, Europe has become a focal point forentrepreneurship and research and consulting. However, it lacks of the mechanism to transform start-upsand SMEs into global companies. Step by step all the remaining global European IT companies are acquiredby American companies. The last to add to a really long list is Nokia, recently acquired by Microsoft.
The action: Push new ventures and funding options
The need of financially sustainable LT companies
One of the crucial steps for Europe to become a leader in LT is to have a financially sustainable LT industry;which means the ongoing ability of the LT companies to generate enough resources to work towards theirvision.
To be more precise, being financially sustainable, means in most cases for an organisation:• To have more than one source of income.• To have more than one-way of generating income.• To do strategic, action and financial planning regularly.• To have adequate financial systems.• To have a good public image.• To be clear about its values (value clarity).• To have financial independence.
Taking into consideration what is a financially sustainable organisation; several key points characteriseEuropean LT industry:
• There is an extensive network of computing linguistic academic and research programs aroundEuropean universities supported by public funding. A fact that makes Europe a pole for new enterprisecreation, R&D and continuous talent generation.
• The creation of LT companies and on-going product research is based primarily on public funds and cap-ital/benefits reinvestment. Therefore European, national and local governments and public institutionsplay a fundamental role in the creation of companies in this industry.
• However, there is a heavy reliance on public funds by some companies and not only for the researchprocess but also for their financial sustainability. Some of them won’t survive without the funds. Thatmeans that many LT companies are not financially independent.
• According to LT Innovate research, in many of the LT industry companies, there is no clear strategy forfuture funding beyond the use of public funds or of self-financing or they have not developed a finan-cial strategy. The reasons could have different nature but in the initial stages some organisations areable to survive without a proper strategy.
Addressing the LT funding strategy
If the European LT industry wants to become financially sustainable, it is required to address a financial strat-egy, which comprises a long term view of funding for growth and scalability. LT Innovate believes that a sys-tematic approach to a funding strategy will help LT industry towards gaining financial sustainability; this com-prises the following steps:
• Measure the current sustainability situation: as not all LT companies are in the same situation, it is
important to determine the current funding strategy and your sustainability status. This includes hav-ing a SWOT analysis as well some useful indicators such as: total number of funders, ratio of large fun-ders, earned income, % overhead costs, or cash in reserve.
• Improve marketing and sales strategies: while there are many aspects considered by investors, thosecompanies that are profitable, have a good marketing (go-to-market) strategy and the right sales strate-gies have better chances to access to alternative funding. So, an important step before the fundingstrategy is improve the value chain in order to increase sales and to implement
• Define a funding strategy according to your company goals and the stage of the industry: As noted inthe maturity model, the investors and the types of investments available for an industry differs fromearly stage to late stages, according to the growth and organisational strategy. For example, if the com-pany is planning to expand operations or go international, the funding strategy must seek to supportthis initiative.
The following image shows the typical pattern of financial evolution in high tech start-ups.
FFF: Founders, Family and Friends; VC: Venture Capitalist; Mezzanine financing: subordinate debt or pre-ferred equity instrument that represents a claim on a company's assets.Figure 9: Stages of investment capital 5
This image shows that as an LT company looks for scalability and market share, the company should diversi-fy the funding base. For LT vendors in start-up and growth face seed capital coming from FFF (family, friendsand founders) might be enough as the stage mainly concerns with the development of a new product, from
5 Source: Scolay. High Tech Business Development. http://scolay.co.uk/services/high-tech-business-devel-opment/
the time it is initially conceptualized to the point it is introduced in the market or entering into growth stage,where sales will start to grow slowly eroding the market share; thus cash is needed to promote the products.Also at these stages there are risks associated with technical problems, insufficient production capacity,inability to meet demand, obstacles in distribution, etc.; so strategic alliances and mergers need to be per-formed. When entering to growth stage sales will start to grow slowly eroding the market share.
During growth and mature stage in the market the LT vendors need to diversify the funding base, and leavethe conservative funding strategy. Currently we can see that many LT companies may want to be self-reliantfinancially or continue being supported by public funding, which does not allow scalability. Thus, if growthis pursued, new strategies such as private financing and funding (debt) or mezzanine instruments are need-ed. As LT vendors grow they will need to go towards a 2nd or 3rd round of funding capital (find for newinvestors).
1.10. Enable a sustainable and competitive LT Industry
The gap: Lack of European Competitiveness
The worldwide LT market is becoming more and more competitive because of several reasons. The emer-gence of some very large and powerful players such as IBM or Nuance is threatening the sustainability ofmany small players (especially in Europe). Big Data industry is engaging the global software companies to payattention on semantics and analytics as real enabling technologies to generate value from Big Data. Newentrants in the software and services translation market such as Google and Microsoft with free servicesbased on machine translation are eroding revenue margins. After an initial consolidation wave led by UScompanies, US is leading the LT market in terms of revenue.
As noted in the LT Report 2012, European LT companies, with a strong focus on R&D, have gained access tomarkets by being acquired by larger companies. As a result, the LT market is unbalanced. On the one hand,Europe is composed primarily of multiple small companies whose ability to scale business activities is yet tobe seen. On the other hand, the United States has strengthened its positioning because of the presence ofthe major players of the industry. And to further complicate the situation, Asia is emerging as a result of eco-nomic interest aroused by this area.
LT-Innovate believes that Europe is missing the train if it is not able to regain competitiveness and ensuresustainability for its companies.
The action: Enabling a sustainable and competitive LT industry
For Europe to regain competitiveness and ensure sustainability for its companies, it is required a politicalframework that supports the European LT companies.
LT innovate recommends to the industry to look forward:• Create a favourable political, legal and technological landscape• Boosting standardisation as building block for innovation• Making a success of Horizon 2020• Coordinating public procurement and making it more accessible for SMEs• Launching a ‘Europe Co-Investment Fund for Innovation’• Encouraging the “Europeanisation” of mature SMEs:
The recommendations are discussed in detail in Chapter 4.
As we look to 2013, the economy is still a potential wild card, but downside risks have receded. WorldwideIT spending will grow at 5.9% in 2013 compared with 6.3% growth in 2012. Much of the 2012 and projected2013 and 2014 growth rates are fuelled by the adoption of intelligent software, services and devices.Software is gaining momentum driving more IT services spending. Packaged software is expected to grow ata healthy rate of 6.4%. And worldwide IT services will follow suit with a growth rate of 4.1% in 2013.
Software momentum will continue, also driving more IT services spending in 2013. Packaged software isexpected to grow at a healthy rate of 6.4%. And worldwide IT services will follow suit with a growth rate of4.1% in 2013. Cloud penetration continues to increase with double-digit growth for cloud services through-out the 2012–2016 forecast periods.
Much of the value of products and services in the new ecosystem will be high-value vertically focused solu-tions. The build out of those solutions — for example in healthcare, energy, government, financial services,and retail — is accelerating in 2012, leaving IT providers without vertical competency on the side-lines.
A group of industries/economic sectors which due to their global leadership and/or their own heavyweightin European terms, are clear targets for the LT industry, as they show multiple needs for solutions to lan-guage related business challenges. The following section includes our view of the opportunities in the ver-tical industry markets for LT, based on current market challenges and needs of the sector.
2.1. Our view of vertical industry markets for LT
While every industry has specific challenges and needs, what it derives from LT-Innovate Focus Groups andon-going research is that some of the factors are shared and impact many industries at the same time. As aresult, the following cross-industry challenges and needs are a good starting point to understand industryrequirements from a LT point of view.
DATA APPLICATION PLATFORM
Automotive Service Information Technical Translation Embedded Systems
Within the LT2013 report LT Innovate recommended verticalization, however we would like to drive theattention that is explained as “specialisation” in niche market within vertical industries.
LT Innovate sees market opportunities for LT Vendors at vertical markets that are still thriving and adaptingnew business process, setting a path towards new capacities and/or innovate in their B2B processes, in orderto provide a broader offering reaching consumers. In this regard LT Innovate recommends 4 vertical markets:Media, e-Retail, Tourism and Manufacturing.
Wide approach in vertical sectors is risky for LT Vendors with no scalability or a strategy of horizontal inte-gration. Sectors such as Government, Finance or Healthcare have high competition, faster technologicalchange and new emerging integration of Web 2.0 wide solutions as industries (e-Government, e-Health,etc.). Customers are spreading the same dollars over a greater number of products and services in a cen-tralised and integrated manner and as such, there is a trend towards a reducing customer spends “per solu-tion”. Hence these vertical markets are themselves shrinking. So the way to compete here is with scalabili-ty, size, volume and providing wide support.
Challenges Needs
Risk, threats and regulations increase in a con-strained-budged and resources situation
Customers demand personalised and customisedservices
Tacking the organisation towards the omnichannelcustomer
Providing automated personalised and customisedservices
Create dynamic, emotional and interactive experi-ences based on existent content Securing processes, assets and people
Managing the brand is becoming complex Transforming the company into a customer-centricorganisation
Speech is perceived as the next big thing Embedding contextual technologies into marketing,communication and R&D processes
Company related-data, including external and inter-nal silos, is growing
Publishing and media industry is living a profound redefinition due to several factors. Digital content is rap-idly replacing print content. Digital content should be available in multiple devices and platforms and pro-vide value-added features to overcome piracy. Social media is becoming the de-facto channel to contact con-sumers. In addition, the tradition publishing industry was slow to include and implement all technology-based improvements that are transforming its industry (from P2P technologies to content generation plat-forms), opening the door to new entrants who are digital natives with immense platforms capable of pub-lishing content in the all-digital sense without direct links to the traditional players. In addition, brands areincreasingly embracing content marketing, behaving like publishers for their owned and earned media intoday’s digital world to be able to create direct engagement with customers.
Under this scenario, publishers are reinventing their business models. For example, paid media includesnative ad formats, where the ad is programmatically connected to the underlying publisher platform.Nevertheless, many questions remain open. How to reach more countries? How to produce better multilin-gual content? How to broadcast more effectively the potential customers while competing with the newentrants?
Challenges and Needs
As publishing and media industry is facing a deep redefinition, it has many challenges and needs to be ful-filled. Increased understanding of the forthcoming challenges and needs for publishing / media will help LTindustry and stakeholders to improve planning and optimise their strategic IT planning and spending in fol-lowing years.
Challenges Needs
Transition to the digital content era Find innovative ways to deliver content to usersbased on their preferences
Capture, engage and retain the consumer that isshifting from traditional media to new entrants
Support multi-output and multi-device digital publi-cation processes
Extract, combine and manage external and internaldata
Develop the right sourcing / collaboration strategyand select the right partners
Manage a complex cooperation / collaboration envi-ronment with new entrants and social media
Intelligent raw content curation for internal digitalenterprise repository
How to provide value-added services to potentialcustomers
Identify which LT and Big Data technologies can helpto retrieve information in a very easy and practicalway
Driving experimentation to approach new pay mod-els (business models) Identify the right approach to copyright protection
While since the advent of Internet the consumer behaviour has gradually changed, the economic crisis start-ing in 2008 and the consequent recession has grown them more resourceful and motivated. This resource-fulness includes shopping online and the use of mobile devices as in-store price research tools. As a result,companies not only required of precision retailing based on data visibility and advanced algorithms butomnichannel retailing. This concept describes not just independent channels — store, catalogue, Web, andmobile — but the fact that these channels had to operate simultaneously for the modern consumer andcarry a consistent brand message.
The retail industry is living the perfect storm. On one side, omnichannel retail means a profound orchestrat-ed and optimised transformation of processes, people and systems along the supply chain. On the otherside, this industry finds itself dealing with a newly overlaid consumer persona — the value-savvy Five-I shop-pers who are Instrumented with mobile devices, Informed with access to the Internet on their devices,Interconnected in social communities, In-place always in stores or wherever else the shoppers might be and,finally, Immediate in their ability to take action.
As shorter-term economic conditions — some positive and some negative — roll over the retail industry,increasingly intelligent business applications are required in retail to continue engaging the new consumer.In addition, omnichannel requires strong internal partnerships between line-of-business functions (adminis-trative, merchandising, marketing, supply chain, and store operations) and technology management.
Challenges and Needs
Increased understanding of the forthcoming challenges and needs for retail / e-commerce will help LT indus-try and retail / e-commerce organisations to improve planning and optimise their strategic IT planning andspending in following years.
Challenges Needs
Adapting to a more competitive and fast changingmarket conditions
Deploying smart operations based on processes withembedded intelligence to drive new levels of pro-ductivity and customer service
Emergence of new customer interaction channelssuch as mobile devices and social media Expanding commerce across all channels
Product and brand opinion happens outside the tra-ditional marketing scope
Establishing curated merchandising based on sociallistening and participation
Internet, Mobile and Social Business have trans-formed the consumer Dealing and engaging the new wiser consumer
Consumers demand brand and values consistencyand transparency Establishing engagement marketing and services
Personal data will be the next big thing Generate new services based on personal data
Buying experience should be multichannel friendly Replicate rich search-and-finding capabilities ofonline for mobile, social media, catalogue and store
2.5. Tourism“I expect that machine translation would be able to interpret intercultural diversity in the future“
Carlos Romero DexeuDirector of Tourism Research, Development & Innovation, SEGITTUR
Tourism is a transversal sector interacting with many other industries and services. According to UNWTO,tourism maintained moment in 2011. International tourist arrivals reached 983 million worldwide growing4.6%. Europe, which accounts for over half of all international tourist arrivals worldwide, was the fastest-growing region. In addition, according OECD tourism directly contributes, on average, 4.2% of GDP and 5.4%of employment (4.4% and 5.7% for EU members) in 2010.
As of retail industry, consumer behaviour is defined as resourceful and motivated. The consumer requirespersonalised intelligent services including travel search sites that provide the best fares, location-based serv-ices include in mobile devices, translation-aware applications that pushes the current boundaries.
Challenges and Needs
Increased understanding of the forthcoming challenges and needs for Tourism will help LT industry andstakeholders to improve planning and optimise their strategic IT planning and spending in following 5-10years.
Challenges Needs
To engage customers in their native lan-guages
Interact with visitors and tourists in their own language, under-stand their needs, offer customised services adapted to theirculture in their language
Capture specific market characteristic andpreferences in a localised language with alocalised marketing strategy
Provide the right message and communication in differentcountries, taking in account language and cultural differences
Deliver translated marketing content
Create and sell customised and personalised experiencesbased on visitors and tourists preferences, cultural backgroundand customer segmentation.Customise advertising, online marketing strategies, webs, andperform brand tracking in the required languages
Provide machine interaction (e.g. usinghuman-machine interfaces) in an “invisi-ble” way, so the industry get an easy atti-tude of humans towards computingmachines. For example using voice servic-es using customer's native language withvoices that really are perceived as human,with kind, warm and emotional interac-tion; or deploying solutions that allow tobuild with voice a real conversation withthe tourist
Analyse tourism trends in social media and transform theminto insights to be used in marketing campaigns and user inter-faces
Reach any European market Automate cost-efficient, high quality, timely (real-time), locallyadapted, multiplatform solutions for translation
Better customer understanding
Dispose of detailed analytics, coming from their multi-lingualchannels (web, social), enabling tourism product and servicesuppliers to understand customer needs better and engagecustomers in their native languages
Manufacturers are in the process of evolving to a productive enterprise. A major trend to consider is thegrowing influence of the line-of-business (LOB) leadership in technology decisions, which will shape howthese companies think about and invest in information technology (IT). While the economic environment isuncertain, the long-term profitable growth seems to be linked to globally integrated value chains that areable to adjust to a highly dynamic market.
However, there are a number of factors to be optimism in the short term such as capital good showed arecovery in 2011 - 2012 period, new labour cost balancing strategies are defining the global sourcing strate-gies and innovation is leading the supply chain transformation.
Supply chain requirements and concerns have remained consistent over the past couple of years and push-ing its transformation to be able to cope with uncertainty demand. Complex and extended global supplynetworks are being deployed because of globalisation and the chase for "low cost" manufacturing. Volatiledemand is increasing, as consumers are less brand-loyal, and far more selective, than ever before. The accel-erating pace of business requires manufacturers to be more "agile" and run the clock speed of their supplychains. And inflation and direct input cost is increasing the pressure as margin declines and manufacturesoften lack the ability to make price increases.
Challenges and Needs
Increased understanding of the forthcoming challenges and needs for manufacturing companies will help LTindustry and manufacturing stakeholders to improve planning and optimise their strategic IT planning andspending in following 5-10 years.
Challenges Needs
Create globally integrated value chains that are ableto adjust to an often-brittle market Integrate and optimise of analytics in supply chains
Move beyond automation, transform labour forceinto knowledge worker
Enable people to deal with increasing market com-plexity and demand variability
Shift of Asian manufacturers to domestic demandsand intra-emerging markets
Redefine the "made in China, sold everywhere"strategy
Decoupling of manufacturing and managementfunctions in geographically dispersed manufacturingcompanies
Improve analytics and video technologies for com-munication, monitoring and collaboration
Enablement of connected operations Adopt mobility, remote sensing and monitoring inplants to create connected operations
Support precision retailingTo help precision retailing for retailers, manufactur-ers need to rethought "the batch size of one" supplychain strategy
Move beyond automation, transform labour forceinto knowledge worker
Enable people to deal with increasing market com-plexity and demand variability
Shift of Asian manufacturers to domestic demandsand intra-emerging markets
Redefine the "made in China, sold everywhere"strategy
Slow economic growth and overall uncertainty have been taxing companies of all sizes and locales. However,security continues to be something organisations cannot do without, as it is becoming one of the major con-cerns. All companies are besieged by an increasing number of financial, operational, technological or geopo-litical risks. Security must be more flexible to deal with cybercriminals, sophisticated threats, mobility, con-sumerisation, cloud computing, and regulations.
While the role of the human element, policy, and business processes for managing risk and security cannever be overlooked, information technology (IT) and related decisions are becoming increasingly importantto the chief risk officer and the chief security officer in helping an enterprise make the best risk-informeddecisions. Increased cost pressures on enterprise security groups will continue to drive the adoption of secu-rity SaaS technologies, which can provide lower deployment and operational costs than on-premise securi-ty software or hardware solutions.
Challenges and Needs
An increased understanding of the forthcoming challenges and needs in security will help LT industry andmulti-industry organisations to improve planning and optimise their strategic IT planning and spending in fol-lowing 5-10 years.
Challenges Needs
Increasing number of threats, including physical orbranding threats originating in social networks,which allow that groups organize against institutionsBoundaries of IT security department expanding toother areas (more than perimeter security)
Moving from a reactive strategy to a predictive andproactive strategyMonitor social media consumer congregations toavoid physical or digital attacks, as consumers“organise and act” to claim and act against institu-tions or organisations
Growth of national, trans-national and industry-spe-cific security regulations Deploy an holistic approach to security and risk
Proliferation of risks (financial, operational, techno-logical, operational or geopolitical)
Deal with specific risk such as: enterprise risk man-agement and infrastructure, liquidity and asset liabil-ity management, market risk and trading, compli-ance and control, credit risk, financial crimes, infor-mation security or finance compliance and fraud
Budget constrains Do-more-with-less
Lack of security expertise and dedicated IT resources Generation of new skills and new outsourcinghuman specialized resources services
Deficiency of security culture Protect the new most important corporate asset:information; Compliance adoption
Identify sophisticated spam email Reduce identity thief and control data leaks
2.8. Short term recommendations for market opportunities
We suggest LT vendors to include the following sectorial needs or recommendations which were during LT-Innovate workshops and were reported as important for the demand in the next 5 -10 years.
2.8.1. Tourism
Buyers from tourism sector see that LT can support the following needs in the following 5-10 years:• Adding “human” value to automated technologies by integrating voice and video/image technologies.
The industry believes that travellers and tourists feel that speech and video are much more natural thanreading when interacting with content. Voice is seen as the future link with travellers (e.g. using spokenvoices to read out written content in any language).
• The tourism industry commented that the convergence of voice, image/video (e.g. avatars, digital ani-mation) and data solutions will make it easier for automated technology to attract and retain customersand promote profitability. Dealing with people despite automation will be necessary.
• The industry sees MT as a technology that enables the capacity to interact. MT needs to go further thanautomatic question answering, and should provide opinions, analyse preferences and interact withtravellers and tourists. They expect to see MT-driven multilingual chat in customer support as well asmultilingual applications in site management (semantics + multilingual) including massive multilingualwebsite localization, real time updates will be needed.
• Communicate better with tourists and travellers from the cultural point of view. this will enable real-time voice and text translation and localization at any site through mobile devices (tablets, cell phones,etc.) with support of cultural behaviour to better serve new and large tourism groups (e.g. Arabs,Russians, Chinese, etc.)
• Translation should be able to support non-verbal communication, including the increasing use ofimages or emoticons, taking in account the communication channel. Part of the trust and credibility ofa conversation is embedded in how it communicates.
• Intelligent content technologies should be able to:o Provide content that could be automatically used for positioning, recommendation and auto-
matically enriching CRM solutions.o Generate a “dictionary” for each client where specific meaning of words and emotions could be
used to segment and anticipate selling approaches.o Communicate between two devices to suggest a touristic destination based on preferences
saved in the devices (e.g. taking in account the preferences of mobiles held by a couple, suggesta destination or a restaurant).
o Summarizing (automatic rewriting in “plain language” or within a defined “style edition”) con-tent from different sources, including tourists comments and experiences in social networks.
o Multilingual searching and social media analytics, sentiment analysiso Searchable video voice tracks/ searchable transcribed videos will be needed in the future. Mix
language/speech search with face recognition, and other advanced image searching (CRM usingspeech and/or text and/or multilingual chat) could strongly support the physical security ofplaces and art works. New technologies that predict vandalism are needed.
2.8.2. Manufacturing
Buyers from manufacturing sector see that LT can support the following needs in the following 5-10 years:• Cost savings for human translations• Improving data management / finding documents better, language technology being part of the whole
• Integrated document and language search, especially for big companies• Keeping confidential information in the company with an in-house system• They would invest in LT if:
o if it was a reliable instrument for accurate translation, for which it would have to be customizedfor the specific company,
o if it was able to handle the challenges of varying confidentiality levels and access rights• Main areas of interest in short term include:
o Using language technology (all speech-to-text, text-to-text- text-to-speech) for meetings (webconferences) in order to avoid huge time losses
o Using text-to-text technology for the automated translation of documents within a whole mul-tilingual company-wide access-to-data system, in order to avoid huge translation costs andinformation losses
2.8.3. e-Retail
Mainly e-retailers that in the following 5-10 years they will need LT to support:• Increasing bargaining power from consumers: Bi-directionality of the web is making consumers to gain
bargaining power and independent behaviour (not easy to maintain loyalty) as consumers: write, shareand network as well as organize into cohesive groups and act (e.g. groupon) to get best bargainingpower; thus e-retailers organise around shared consumer needs. Omnichanel strategy: mix of retailingchannels, stores, online, mobile and social
• Globalization of the demand: currently increase in shipping traffic bring manufactured goods fromdeveloping to developed nations or from countries with lower prices/costs to the ones with higherprices (including sometimes the effect of currency exchange). Increased international sales and ship-ping traffic also has increased not only for the fact of reaching distant markets but also for local sourc-ing agility.
• The changing nature of money, currency and finance: current trends online, especially in e-retail, lookat what gets exchanged in a transaction, this means not only new forms of payment, but new forms ofcurrency (e.g. cash, finance, credit, micro-payments, mobile Payments, etc.). The need of analysing con-sumers’ behaviour and patters is needed not only for purchasing habits but due to the fact that is con-sidered “money”. Shopping an online store results in cookies being deployed to track your movementsthrough the site and a sign up to pay tracks that behaviour plus your actual purchase history - andrecords that against whatever personal details people provide. Customers' data is now a form of cur-rency to be exchanged for points for merchandise.
In addition Social Media is funded via advertising (Facebook's 2011 global advertising revenues will be$4B ), in Social Gaming players earn points or purchase points for real money (virtual currencies withreal value) or social workplaces that value workers tasks in an amount per minute (e.g. 1 cent perminute). Thus e-retailing is participating in an online unregulated economy and without borders. LTvendors need to provide solutions that take in account the evolution where retailers will grant virtualcash in return for data and then accept virtual currencies in return for goods.
• Increasing need LT and convergence with intelligent content technologies: during next 5-10 years e-retail decisions will be made based on accurate and up-to-date information from around the business,from competitors, vendors and consumers, but that is not really the problem at hand. Thus the chal-lenge for retailers is to evolve their processes, information systems and performance measures to bemore information-driven, mixing asynchronous ”lifecycles” processes: customer, customer order,replenishment order and product lifecycles.
e-Retailers will need to combine sales transaction data from stores and every other channel, with socialdata, which is expected to deliver unique benefits as soon as the datasets become available and usable.
Buyers from publishing and media see that LT can support the following needs in the following 5-10 years:• Building platforms that address an overall (not niche) publishing problem that will also enable collabo-
rative contributions going forward. • Providing solutions that address a specific domain problem in publishing/media workflow. This could
be a highly-focused translation solution, for example, that is closely tuned to the needs of specific pub-lisher/linguistic or knowledge domain/media. There were no real examples of this possibility, eventhough many general translation solutions exist in the marketplace.
• Language technology is currently best suited to solving specific tasks in the publishing workflow, suchas: semantic enrichment of digital content to provide better content products, and language correctionand proofing to ensure quality text inside digital databases, so that search engines can find accuratecontent.
• Publishers are not responsible for content before it reaches them as a raw material for a potential prod-uct, not for what happens to that content once it has been sold to a user downstream. This means thatthey do not engage with speech interaction technology (e.g. text to speech capabilities in e-readers) inthe context of their product development, even though speech technology might be used at other lev-els of a company as a work optimisation tool as in any other industry.
• Translation is a constant but hard to clarify problem in any publishing/media context. Translation is nec-essary for extending market reach, but large publishers sell translation rights rather than engage in theactual translation processes. In the STM marketplace, the focus is mainly on publishing in English. It isimportant therefore to understand exactly at which point in the value chain automated translationcould be carried out in the publishing and media context.
• Finding innovative ways to deliver digital content with much more natural interaction. Consumers feelthat speech and video is much more natural interaction than “reading electronically”; read a book is ok,but read electronically does not provide the same feeling than reading a book; consumers prefer to seefaces, people or animations, as well as listening voices that sound like “human”
• Voice as the future connection with the consumers; thus spoken voices to vocalise appropriately anywritten content in any language and Speech tracking in multilingual spoken content in real time will beneeded.
• Summarising (automatic rewriting in “plain language” or within a defined “style edition”)• Multilingual searching, multilingual social media analytics, sentiment analysis, MT-driven multilingual
chat in customer support, multilingual application site management (semantics + multilingual), massivemultilingual website localisation (real time updates), multilingual summarisation, mobile app (speech)translations for any content.
• Searchable video voice tracks/ searchable transcribed videos. Mix language/speech search with facerecognition, and other advanced image searching (CRM using speech and/or text and/or multilingualchat)
2.8.5. Security
• Privacy and security: The latest cases about espionage of citizen based on data from Facebook,Microsoft and others by some governments have showed the dark side of data. While data is unethi-cal, the use of Big Data and intelligent content technologies may be not. These technologies can letcompanies to overcome security, privacy, regulations and consumer confidence. LT can help to detectdata and information leaks, in data masking process, to enable secure procedures. For example, ensur-ing that confidential documents are not open for third parties.
• Brand protection: using social media monitoring and sentiment analysis, companies can deploy theright brand management strategies to capture the real needs and demands of customer and detectpotential damages to the company’s brand.
• Biometric security: it is expected that biometric applications will gain consumer attention. It is expect-ed to growth the interest for secure commercial transactions and services. LT is the enabling technolo-gy behind finger scanning and Apple competitors are already behind to provide this technology too.
• Data munging: Data munging is the deliberate alteration of an e-mail address on a Web page to hidethe address from spambot programs that scour the Internet for e-mail addresses. Under certain regu-lations this practice (that is becoming usual for e-commerce) can be not legal. LT can help to detect thispractice.
• Data scraping: Competitors are scraping data from your company website to compare products, prices,detect customers… Log analysis based on semantic patterns can detect data scraping and help to definestrategies to reduce competitors’ abuses.
2.9. Horizontal Industry Segments
At the time of entering the market, LT vendors have different options. We have already analysed the verti-cal point of view. Let's focus now on horizontal applications.
When we consider horizontal segments, many times is less clear the fundamental role of LT as it plays eithera feature or leverage role on the final product. LT companies focusing on horizontal segments are niche play-ers and offer many times quite specific solutions solving complex needs.
In particular, applications in horizontal segments provide value, complement the value chain, maximise andoptimise business process and strategies and have a specialist approach; this means provide LT breed solu-tions targeting core “business processes”. This approach view is based on the direction of surviving comingchanges in the software industry by staying generic, adaptable, responsive and lightweight. In this case usingSaaS or “embedding” models are recommended to simplify delivery and focusing on “business process”
The following table presents horizontal segments where LT Innovate foresees opportunities as LT currentlycan provide value added.
• Business Intelligence: Enterprise search has focused initially on knowledge management and enhancecollaboration of people. In recent years, with the inclusion of more semantic capabilities, it is living asecond youth and expanding its horizons. As more and more companies are maturing their businessintelligence systems, they are generating large amounts of information relevant to the organisation(knowledge) and ask for integration between the enterprise search and BI systems. This is pushing lit-tle by little a technology convergence trend. This is not the only point of convergence between this seg-ment and language technologies. BI platforms increasingly include preconfigured analysis of unstruc-tured information (e.g. social networks) based on LT. What we are living in the BI market is a conver-gence of technologies to facilitate the decision-making of all kinds. We already have examples of LTcompanies that provide services and solutions in the form of unified information access platforms suchas Sinequa , Attivio or Playence.
• Content: LT Innovates is observing a similar trend for content management. It is not enough to storeand provide access. It is require providing intelligence access and flexible output capabilities. The tradi-tional content management model and static publishing framework in intranets or extranets is evolvingto a fully dynamic semantic content and publishing architecture. For example, semantic technologiescan provide the infrastructure for pulling together information from voice-response systems, billing andpayment systems, support systems, sales and marketing systems, and more to provide the full contextof a customer's interactions with a company as its needed. Moreover, the expressivity of Semantic Webontologies can help automate the tagging process by taking advantage of taxonomy structures and nat-ural semantic relationships between concepts. We already have examples of LT companies that provideservices and solutions such as HP (Autonomy), Open Text, or Ontotext.
• Customer experience: When we speak about customer experience, we should remember that is thesum of all experiences a customer has with a supplier of goods and/or services, over the duration oftheir relationship with that supplier. It is clear that we are not speaking about technology but ratherstrategy and the concept includes awareness, discovery, attraction, interaction, purchase, use, cultiva-tion and advocacy. In the process of delivering a better customer experience, technology and in partic-ular LT plays a significant role. Using technology, companies can capture data about all the customerinteractions and using analytics and LT transform the data into information and actionable insights. Forexample, Sinequa is helping SFR to deepen its knowledge of customers and increase retention rates.
• Sales / Marketing: LT Technologies can be successfully applied to sales and marketing to improve themanagement of current and potential customers, and optimise and enhance marketing activities. Forexample, Kwaga enables semantically enhanced contact management in both traditional email (Gmail,outlook) and CRM. By capturing and automatic completing contact information reduces the sales forceeffort in these tasks. Another example worthy of comment is the case of Inbenta that provides to Iberiacross-selling capabilities through semantically contextualised commercial banners allowing it toincrease organic traffic on the company website naturally. Bitext provides semantic analysis toSalesforce’s Marketing cloud insights and, as a result, companies have access to real-time insights aboutcustomer reactions on social media campaigns, enabling companies to then act swiftly and engage withtheir customers in the most effective manner.
• Human Resources: The last decade has brought a transformation of employee recruiting using internetand social media sites such as Linkedin or Facebook. Companies are trying to use job board like mon-ster and sites such as LinkedIn, Facebook, Twitter, and Ecademy to find people for jobs and networking.This new scenario brings challenges for HR. How to find candidates, to validate profile match, to checkcandidate backgrounds or to review vast amount of candidates at the same time among a long list.Human resources can benefit from LT to automated many tedious tasks. For example, parsing CV,detecting main skills in candidates and employees or matching the most plausible candidates. Internalapplications for LT include succession planning, talent management and retention strategies.Companies such as Textkernel are already providing these services.
• Supply Chain: LT can help to manage supply chain. For example, Biogen uses Semantic technologies tomanage data and KPIs that change constantly. In particular, the pharmaceutics industry requires beingable to adjust to multiple regulations and rules. Semantic makes the data transparent to any type ofchange in terms of regulation, materials, providers to subject matter experts and not only IT depart-
ment. On top of that, the globalisation of supply chain requires working with suppliers in different loca-tions and languages and translation technologies can play a fundamental role to smooth operations.
• Legal / Risk: The legal department, and by extension the legal industry, can profoundly benefit from LT.We have already seen some applications (from HP / Autonomy or LexisNexus) in the context of legaldiscovery including e-discovery, asset subrogation and recovery and legal text classification.Applications can be found in decision support, legal procurement or legal analytics as well from judicialdecisions prediction, patent portfolio analytics, fraud detection and mitigation and risk assessmentmanagement.
• Finance: While finance has benefit from mathematics and statistics, LT open new potential benefitsusing machine learning, semantics o natural language processing. From finding faster financial informa-tion to correlating related reports and identifying and reducing legal risk. Beyond the traditional use todetect fraud, the use of financial information ontologies can help to understand the behaviour of cus-tomers and providers. New uses such as market intelligence for investment analyses will emergence tocover the need of finding interesting companies to invest. Companies such as Cambridge Semantics arealready offering services such as insider trading surveillance and investigation.
Among all horizontal segments, security can be considered one of the most important as LT Innovate hasnoticed in our focus groups. We will discuss in detail this segment in the following section.
The leaders of the European LT industry have already started joining forces through LT-Innovate (www.lt-innovate.eu), under cluster-based strategy and vision. LT-Innovate is a European Network that strives tostrengthen and foster a European LT industry that must come together to collaborate and to co-operate, takestrategic risks together in order to overcome common roadblocks to growth and perform as a global com-petitor.
LT-Innovate is poised to step up and provide solutions to the new communication challenges, and deliver thecritical missing layer in the Digital Single Market under the following vision:
“The European LT industry will build the foundation for a language-neutral European Digital Single Marketbefore the end of the decade, creating added value with significant impact on industrial, commercial andsocial issues in the EU.”
This vision embodies the following strategic features of Europe’s digital future:• Mastering human language is the next big opportunity for ICT; LT is a key technology of the future.• LT is a maturing industry; there is strong global demand for LT in mainstream products and services.• European companies could command a larger share of the global LT industry, but need to overcome
fragmentation and market barriers.• There is no lack of innovation in Europe; the main stumbling block is that European SMEs do not grow
beyond their national or regional linguistic islands to address European and global markets. • Europe needs a shared language infrastructure to preserve its languages, give people and organisations
access to the Single Digital Market using their own languages, and underpin innovation in the LT indus-try itself.
LT-Innovate builds, nurtures, and supports LT industry initiatives maximising the value of LT industry as wellas aligned R&D LT segments with market segments in order to link market needs and capabilities with R&Dlines. LT-Innovate strategy aims at supporting:
• A sound ecosystem where a few world-class medium-size EU based companies act as driving forces forco-operation clusters, or demand-driven value chains, populated by competitive SMEs.
• An industry systematically rolling out a competitive and profitable offering of innovative products andservices, answering well identified needs of key customer groups and sectors.
• An industry delivering LT Services on a business-wide common infrastructure; the European LanguageCloud will be recognised as the backbone of the European answer to the challenges of the global mar-ket for language-based products and services.
• An industry whose voice and proposals are taken into account by policymakers and institutional stake-holders.
• An industry healthy enough to attract investors, skilled labour and commercial allies.• An industry closely co-ordinated and aligned with leading research institutions, to enable the creation
of synergy, and ultimately to deliver innovative products and services to the markets.
Up to now, LT-Innovate has acted as a “grass roots” initiative in a twofold for the LT Industry:• Providing a definition and characterisation of the LT industry, market research for measuring existing
and estimated demand growth and recommendations for improving the industry’s competitiveness• Fostering strong productive partnerships and network within the LT industry untapping further collab-
oration, generation of value and increase awareness of LT and its potential.
3.2. There is a clear definition of the LT Industry and Products
Language Technologies are about more than crossing language barriers through translation, though they ofcourse serve that purpose; LT will provide many of the basic computing and interface features for next-gen-eration ICT, and languages, products and services without Language Technology will be highly disadvan-taged. We believe the EU-based Language Technology industry can step up and provide solutions to thiscommunication challenge, and deliver critical missing elements of the Single Digital Market. We furtherbelieve that the role of language in the global digital economy is so significant that the challenge willinevitably be met by an emerging set of language technologies, if not from the European LT industry, thenfrom global competitors located elsewhere.
Under the LT-Innovate view, the LT Industry has been defined by addressing three related technology mar-kets that share common historical roots: a) the Intelligent Content market that provides linguistic and knowl-edge tools to add business value to data and content of all kinds; b)the translation Technology segment thataccelerates and simplifies multilingual content transfer and processing.; and c) the Speech Technology,which supports spoken input and output for all digital devices and processes. These three segments of theLanguage Technology industry are intrinsically interlinked, making digital life and work more responsive tothe power, meaning and diversity of human language.
Thus, the LT Industry concept as defined by LT Innovate, is an umbrella segment for innovation that can fos-ter high levels of productivity and innovation, and lays out the implications for competitive strategy and eco-nomic policy for LT companies.
In order to create the bases for closely co-ordinated industry and aligned with leading research institutions,to enable the creation of synergy, and ultimately to deliver innovative products and services to the markets,LT-Innovate have linked the LT research categories with LT market categories 7.
3.3. Positive Market Trends underpin LT growth 8
Currently the world is living a continuous and accelerated process of change that is profoundly transformingand impacting business and society alike. What makes different these turbulent times from other periods isthat many of the changes that are happening at the same time can be considered as disrupting innovation.As introduced by Clayton, a disrupting innovation creates a new market by applying a different set of values,which ultimately (and unexpectedly) overtakes an existing market. This concentration of overwhelming dis-rupting innovation is leading to disrupting times.
Companies have a chance to integrate and embrace these disrupting changes to their products, services andbusiness by creating new value. But they need new systems, processes, and intentions in place to recognisedisruption as it happens, assess new opportunities, and quickly test new ideas.
7 LT Innovate followed the taxonomy of IDC market categories. Clear matching of Research and market cat-egories is provided in the D1.3 Industry Taxonomy
8 The LT market and underpinning trends have been deeply analysed in the LT2013 Report (D2.5). This sec-tion will summarize key trends and additional findings from new generated reports
The challenge is that the current disruption has at least three dimensions: technological, social and econom-ic.
• Technologic disruption: While disruptive technology has been widely used as a synonym of "disruptiveinnovation", the latter is now preferred because market disruption has been found to be a function usu-ally not of technology itself but rather of its changing application. However, the volume of emergencetechnologies considered as disrupting innovation is nowadays overwhelming. Just to name a few:smartphones, tablets, gamification, geolocalization, internet of things, social collaboration and media,apps, etc. From all the emerging trends four of them are highlighted as the biggest technological dis-ruptors: Mobile, Social, Cloud and Big Data.
• Social disruption: Society is experiencing a shift from an analogical era to a digital era characterised bytechnology which increases the speed and breadth of knowledge turnover within the economy andsociety. At the same time, the number of people who was born during or after the general introductionof digital technologies and through interacting with digital technology from an early age, known as dig-ital natives is starting to rapidly increase. While it is clear that a digital native is a person who under-stands the value of digital technology and uses this to seek out opportunities for implementing it witha view to make an impact, the differences a far greater. Some of the new personality traits, values, atti-tudes, interests, or lifestyles include:
o The interest of content creation and “mashing”o The tendency to create active communities o A gravitation toward social media sites where they can participate in discussions, share experi-
ences and get involved in cultural conversationso A desire to be in control of their own lives, and a contentedness with complexityo A desire to work in more creative industries and be less restricted by rigid social structures.
Figure 11: Social Disruption due to technology
• Economic disruption: Over the last 250 years, we've seen several technological waves of change: o Industrial Revolution o Age of Steam and Railways o Age of Steel, Electricity and Heavy Engineering o Age of Oil, Automobiles and Mass Production o Age of Information and Telecommunication
All this eras have similar characteristics of each change. They fundamentally transform some industries interms of materials, focus and organisational structure. From an economic point of view, the current situa-tion is characterised by a new economic order: the intellectual capitalism.
The intellectual capitalism emerges from two streams of world events: the transition to a more knowledge-based society where product and services have become increasingly information-intensive and actualstrengthening of capitalist economic systems due to the fall of other competing economic ideology at thepresent. In this new order, organisational structures are becoming open, innovation is the major driver of themarket and all industries are trying to centre products and services on people.
Figure 12: Economic Disruption
The Four Pillars and the Third Platform
As of 2011, IDC introduced the third platform: a larger transformation of the IT industry and other industriesusing IT to reshape themselves. Four core ingredients define this transformation: Cloud Computing, Mobile,Social Business and Big Data. New generation of high-value intelligent industry solutions for companies andconsumers will be based on top of them and companies embracing the third platform will play leading rolesin much of the next eight years' growth. By 2020, 40% of the industry's revenue and 98% of its growth willbe driven by 3rd Platform technologies that today represent just 22% of ICT spending.
Other pillars are enabled by cloud and in turn accelerating cloud adoption. By 2015, one of every seven dol-lars spent on packaged software, server, and storage offerings will be through the public cloud model.Worldwide spending on public IT cloud services was more than $40 billion in 2012 and is expected toapproach $100 billion in 2016. Big Data technology and services market will grow at a 31.7% compoundannual growth rate (CAGR) – about seven times the rate of the overall information and communication tech-nology (ICT) market – with revenues reaching $23.8 billion in 2016. The multifaceted mobile ecosystem con-tinues to evolve -- reshaping and redefining the roles and relationships of a wide range of industry stakehold-ers and there is an overwhelming acceleration in the number of companies that have deployed enterprisesocial software, as well as the maturity of use cases.
3.4. There is a maturing LT product/service offering to fulfil the LT demand
LT-Innovate estimates that there are 435 companies in Europe either actively developing LanguageTechnology, or embedding its features in their products and services in an innovative way.
These companies are distributed as in shown in the following figure according to the three LT market seg-ments: Intelligent Content, Speech and Translation technologies.
Figure 14: The European LT industry: proportion of companies active in each technology segment
Source: LT-Innovate, LTi Directory; N=435 (495 with double-counted)
Is the LT industry big or small?
Having 435 companies in Europe selling LT related software is a very large number as it represents the 2% ofthe software industry.
3.5. Characterization of the LT industry
After reviewing 435 companies so far, it is clear that the LT industry comprises mostly SMEs. A quarter ofcompanies are micro-enterprises with fewer than 10 employees, while only 6% have more than 200 employ-ees.
Figure 15: The European LT industry: size of company, by size of company.
Source: LT-Innovate, LTi Directory: N= 262 Micro (1-10 employees; small 11-50 employees, medium 51-200 employees; more than 200 employees)
Overall, companies are concentrated in the north and west of the EU 10; distributed through Europe with asignificant weight of Great Britain, Denmark, Spain and France; 56% of the current constituency is concentrated in this four countries.
The European LT industry: number of companies by country
Figure 16: The European LT industry: size of company, by size of company
Source: LT-Innovate, LTi Directory; N=435
The European LT industry is a mix of start-ups and companies that have been active in the field for a verylong time, some for 20 years or more. This fact provides an insight of the double nature of LT technologiesin Europe: old technology due to the presence in the market since decades, new technology for the innova-tion, technology improvements and the new boost derived from the four pillars. However the data so farshows a relatively low concentration of new/start-up (less than 5 years) companies reaches 1/3 of the cur-rent constituency.
The list and contact data of the 435 LT Vendors detected in Europe is provided in the D1.4.2 Directory andContact data base. There is an online version of the directory is available in LT Innovate web site; also addi-tional information for the LT Vendors profiles and news about these companies are available in LangTechMarket News.
3.6. What is the current state of the supply offering?
Europe has a strong scientific base in Language Technology, and no shortage of innovative new entrantscoming from that base.
Many market leaders in the Language Technology industry have deep European roots (SAP is market leaderin analytics applications, Autonomy - UK, acquired by HP- pioneers the Enterprise search segment using LT,the UK-based SDL is the market leader in translation software, Systran (FR) is one of the most establishedpioneers in Machine Translation and significant proportion of all speech-based solutions being implement-ed today are based on technology developed in Europe, although owned by Nuance - US-based-).
However, although half the industry has been active for more than 10 years, many companies remain smalland failed to scale, which makes the LT European industry a fragmented industry reliant on larger, more pow-erful players for market access. Being local/national companies with expertise in local languages serve localmarkets with services based on their own languages is not enough anymore as cloud-based language-enableservices are emerging on a large scale. As a result, larger companies acquired many European LT companiesand nowadays the most visible innovation in LT industry is largely driven from outside Europe. For example,Nuance grew out of a Belgian company and has acquired literally dozens of companies around the world tobuild its market-leading portfolio of speech and natural language offerings. IBM focused on the acquisitionof small intelligent content companies.
New entrants (companies less than five years old) predictably include a number of apps and products formobile devices (smart mail, translators, voice and music search), as well as new companies in the speechsegment with customised recognition applications and a batch of new speech output platforms, novel usesof LT in language learning, intelligent robotics, virtual assistants.
3.7. How Mature is the LT industry?
As commented in the LT 2013 Report and in the current state of the LT industry above, the European LTindustry is an old industry if we take into consideration the moment in time when technologies appear.
However from matureness point of view, in terms of market, technology and structure, the LT industry canbe considered an industry in transition to the growth stage still from a mature stage.
The level of maturity has been measured based on the LT Maturity Model generated by LT-Innovate (seeAnnex I). The matureness of the LT Industry has been calculated by providing a perceptive measure to thedifferent behaviours, practices and processes that LT companies are expected to reliably and sustainably per-form through the industry development stages (development, growth, stability and decline), in terms ofmarket, technology and structures.
Also, the following factors have been taken into account: • The existence of many and small firms in Europe: more than 500 according LT-Innovate.• A fragmented supply chain: a lack of vertical collaboration when technology and services are converg-
ing diminishes the value of the LT industry.• The initial stages of technology and linguistic resources: while some efforts have been made mainly in
English and within the companies, it’s clear that a common effort is required.• Innovation-based competition: companies in the LT industry compete on innovation and technology
rather in customer service.• The initial consolidation of the industry: A first wave of industry consolidation allowed the rise of a
strong American LT industry on behalf Europe.Understanding the level of matureness in the LT Industry, has provided us with a better understanding of
the current state of the industry as well as supported the bases of the LT market sizing and defining the10 steps for the LT Innovation roadmap.
3.8. The LT Market Size
Based on the LTi market model and maturity model for the LT industry, LT Innovate estimated the 2011 glob-al market for Language Technology software and services by nearly €20B, and predicted to grow to nearly€30B by 2015 with CAGR of 11.4%, making it one of the fastest growing software markets. In 2011, softwaresales represented about 25% of the LT market (€4.5B) while services took the rest of the market (€14.7B).
Translation Technology is the largest segment of the LT sector, growing to half the total industry (€15B) by2015. Two-thirds of the top 100 vendors in the “globalisation industry” (which encompasses human transla-tion as well as technology) are European, and half of global Translation Technology revenues are currentlyearned in Europe. There are several thousand companies offering Translation Technology services (manag-ing terminology, translation memories, machine translation) combined with human translation, many ofthem micro-enterprises but including a significant number with revenues over €50M.
America plays in important role in the development of LT industry. In 2011, the software revenue in Americaaccounted 48,4% of total software revenue and Europe 25.8%. Americas' LT software market was 1.9 timesbigger than European market in 2011. By 2015, the situation will remain similar. Americas' LT software mar-ket is foreseen to be 1.8 times bigger than European market and the markets will weight 40.3% and 25.2%respectively. Thus America is expected to capitalise on software revenues and continue dominating the LTsoftware market.
Opposite to the software, the LT services market is expected to be capitalised in Europe and situation tendsto benefit this continent. In 2011, the LT services market revenue accounted for 41,9% of total software rev-enue in America, while 40.6% in Europe. Thus, in 2011 the Americas' LT services market was 1.03 times big-ger than European market. Nevertheless, by 2015, the situation will be different. Americas' LT services mar-ket will be 0.97 times bigger than European market, as European market will grow at higher pace. The mar-kets will weight 40.3% and 41.7% respectively. The demand for LT services is expected to growth in Europe.
Currently, the European market is competitive with respect to American suppliers, with a stronger academ-ic base, however business adoption is faster in America, lowering differences in market in a 4-5 years’ time.
Speech Technology Market
LT Innovate estimated the 2011 global speech technology market, including software and services to reach€5.9B, of which one-third of the revenues were estimated to be generated by the software; also this marketwas predicted to grow to €8.6B by 2015, with software as the lion`s share.
Speech Technology, longest established in the market, is emerging on new platforms, notably mobile, givingthis segment a new lease of life. Strong dominance of speech recognition will eventually be balanced withother applications including speaker recognition and speech generation.
Translation Technology Market
LT Innovate estimated the 2011 global translation technology market, including software and services in8.6B, with the vast majority spent on technology-based services while direct software revenue was onlyabout 7% of the market; this market was predicted to grow to €14.9B by 2015, with CAGR of 14.6%.
Translation technology was expected to be least susceptible to full-scale commoditisation, at least for the
Markets Application Gaps and Opportunities
• Call Centre is a core global market• Telecom• Medical reporting and transcription• Large and stable government customer base
(including specialised defence applications• Speedy growth in consumer markets on devices
and social platforms
• Language coverage, need to develop a compet-itive market for languages beyond English
• Asian markets, high digital growth and low pen-etration outside Japan
foreseeable future; thus the software share of the market is expected to rapidly increase as new translationplatforms mature, and technology is expected to be the primarily driver of this market expansion. Servicesare expected to continuously grow, but at a slower pace. Technology drives primarily the expansion of themarket.
Translation Technology is emerging from its niche status as principally tools for professional translators, intomainstream multilingual application environments. Cloud platforms for sharing of linguistic resources havethe potential to transform this segment of the industry. Translation vendors are creating a new generationof hybrid engines that combine different techniques, appropriate to different translation requirementsincluding machine translation. Other major trends include automatic translation in Enterprise applicationsand services and the emergence of consumer translator tools (including spoken translation) on mobiledevices or in online applications.
Intelligent Content Technology Market
LT Innovate estimated the 2011 global intelligent content technology market, including software and servic-es in €4.8B, where 40% of revenues came from software; this market was predicted to grow to €6.2B by2015, with CAGR of 7%; where growth of software is expected to grow slightly faster than services.
Intelligent Content (IC) technology is currently mainly adopted by enterprise, consumer demand for person-alised, highly integrated and industrialised services packaged into smart services and devices in pushing theIC adoption.
The raising customer demand in marketing, finance, operations and R&D departments for faster and moreactionable insight based on structured and unstructured data mixing all type of content resources is drivingthe adoption of intelligent applications for search, analytics and content. Intelligent content applications aregenerally built on existing mainstream applications such as business Intelligence, social analytics, decisionsupport, business-process outsourcing, and predictive modelling.
Markets Application Gaps and Opportunities
• Language Service Providers• Large, global Enterprises with substantial inter-
• Embedded in Enterprise systems• Embedded in social software• Consumer devices
• Coverage for languages that are either poorlyhandled by current technology, or for whichdigital resources are poor
• Custom, adapted engines for specific domains(e.g. verticals, comparable to work at theEuropean Publications Office)
• Translation data on open platforms (data serv-ices), to continue to reduce cost and handlegrowing volumes in professional environments
• Open translation platforms (translation servic-es) for the not-for-profit/NGO sector.
Main Markets Application Gaps and Opportunities
• All industries, but some markets leading• Banking and Financial Services• Communications, Media and Services• Government• Manufacturing• Natural Resources
• Large-scale development ofindustry/domain/vertical specific solutions insearch and analytics
• Intelligent mobile search using location andlanguage specific data
• Cloud-based multilingual search platforms• Multilingual authoring platforms for bloggers
4. Recommendations to align future LT Industry R&D activities with the market
External macroeconomic conditions are currently foreseen to positively affect the LT industry. However, stilla favourable political, legal and technological landscape in Europe based on Innovation driven Research ofexisting research results supporting larger take-up and productification, needs to be covered by both:
• Tactical measures, supporting a favourable political and legal agenda with major initiatives for support-ing a better environment for the LT industry, aiming at creating more opportunities for the industry,employment to grow, as well as to become more productive and competitive in the European and glob-al marketplace.
• Strategic measures based on a favourable technological landscape with a scientific based researchagenda, able to shape technology transfer to fit innovators ‘needs and constraints.
4.1. Tactical Measures: fostering demand side innovation policy instruments
Based upon findings of the project, below we provide below some tactical measures that could be imple-mented within in the framework of EU efforts, aimed at improving its market economic relevance and futuresustainability.
LT Innovate believes that a combined use of supply and demand-side instruments is important for creatinga favourable framework. However, we believe that demand side policy instruments are less by policy-mak-ers as these tools are difficult to prove that are necessary tool in the development of a future market; how-ever we believe demand side policies are key to stimulate industrial competitiveness.
In the foreseeable future, the LT industry, represented by LT-Innovate, will collaborate with policymakers,particularly at EU level, in pursuance of the following measures.
4.1.1. Actionable programmes aimed at awareness raising, knowledge dissemination and use centredinnovation.
These program awareness raising actions supporting demand have the role to bridge the information gapconsumers of innovation have about the security and the quality of a novelty. These actions should target atsenior levels of the different functional units (e.g. IT, marketing, human resources, R&D and innovationdepartments, etc.) in the different industry segments. Also, this programs should target opinion leaders suchas catalysers (e.g. IT market intelligence consulting firms – IDC, Gartner, etc.-), and different channels suchas: IT consulting firms (e.g. McKinsey, AT Kearney, Boston Consulting, etc.) and IT integrators, capable ofstimulate the final demand, promoting opportunities of exploiting STE.
By linking the actionable awareness and knowledge dissemination with user-centred innovation, LT Innovatebelieves that innovation will be driven by targeted end- or intermediate users of the value chain.
4.1.2. Measures contributing to the cooperation among stakeholders in the public and private sectors
Measures contributing to the cooperation among stakeholders in the public and private sectors will aim atstimulating the creation of cross-sector for a finding natural cross border alliances aimed at finding commonproblems, support for standardisation efforts, and e-frameworks in non-traded markets or public goods mar-kets such as e-health, energy or intelligent public transportation and infrastructures.
Public procurement of innovative goods and services relies on inducing innovation by specifying levels ofperformance or functionality that are not achievable with ‘off-the-shelf’ solutions. This approach needs tobe supported by pre-commercial procurement by procuring R&D services, which enables public procurers to
share the risks and benefits of designing, prototyping and testing new products and services with the sup-pliers.
In this regard, LT-Innovate would support and collaborate with efforts to make public procurement moreeffectively accessible for SMEs. This may entail a change in the prevailing mentalities (rather than inapplica-ble regulations), when it comes to assessing the “risk” involved in sourcing procurement from SMEs. TheEuropean Commission may, for example, want to consider coordinating the procurement of Europe-widepublic services for a variety of institutions by opening a one-stop-shop for pooled European procurement.This could create a considerable incentive for market players to develop solutions on a European scale thatmight in the longer run have a positive impact on standardisation.
4.1.3. Measures aiming at promoting the access of small and medium size enterprises (SME) to technolo-gies
SMEs were found to have much high proclivity to adopt LT, thus measures are needed to seed and promoteLT best practices, training and eventually co funding, to avoid further “post- crisis divide” due to stakehold-ers’ size and financial crunch.
Notwithstanding, the convergence of efforts with other EU policies, such as Industry / Manufacturing,Health, and e-Business, aimed at cross-fertilisation and mutually reinforcing initiatives, is needed.
In this regard, formulation of new regulations for broadly collaboration of industry and non-governmentorganisations and encouraging innovative behaviour are needed. So a framework that supports conditionsfor potential economies of scale in LT products and services is needed; there is need for a positive environ-ment that incentive strategic alliance aimed at reducing fragmentation, increase level of specialisation andminimising avoidable overlapping.
4.1.4. Measures aiming at reinforcing skills
These measures should aim at reinforcement/wide spreading of LT skills improvement actions for technicaland non-technical users, mainly in terms of matching educational offering to sectoral industry demands.Skills shortage and gaps could become an issue for the LT industry.
On one hand technical LT skills need to be increased and generated, as technological trends driven by bigdata handling will demand current skilled people that are common to the LT environment. The big data ana-lytics report shows that IT employment grows by 2.5% a year over the next five years, and that demand forbig data staff will rise with the growth rate forecast at 18% per annum; the reports forecasts that by 2017there will be at least 28,000 openings for big data staff in the UK each year.
On the other hand, narrow skill sets in large parts of the sector may hinder it in becoming more competitiveand in meeting new demands for high performance LT products and services in the market. Generic skills,such as: comprise problem orientation, problem solving, communication, design and entrepreneurial skillsneed to be promoted and increased. These skills are associated with 21st century jobs and occupations andare critical for cross-occupational collaboration in work teams and for exploiting value added creation inSMEs and large enterprises.
4.1.5. Measures aiming at standardisation and harmonisation in LT
This measures target the establishment of common policy agendas with the Member States in order to har-monise legal frameworks and enterprise wide standards, enabling operational alliances addressing specificLT issues, such as standardisation of LT resources. In this regard, voluntary cooperation among industry, con-sumers, public authorities and other interested parties for the development of technical specifications basedon consensus need to be stimulated as an important enabler of innovation.
Standards are required at various levels in the global hardware and software environment to ensure smoothconnectivity and interoperability in a complex world of competing IT products.
LT Innovate supports the initiative of the European Language Cloud (ELC); which aims at catalysing effect onthe fragmented language technology landscape and result in greater Europe-wide standardisation of LTresources, products and services. European-scale projects delivering industry specific “customer-centricknowledge platforms” could then plug into the ELC and contribute to further standardisation. Finally, effortscurrently under way in standardisation bodies could benefit from these developments and be furtherencouraged by public procurement requiring solutions based on international or European standards.
Rather than paying the role of a standards body, ELC will focus its energies on ensuring interoperability forall players between all systems involved in providing resources, services, and products. It will deploy andapply the most practical and advantageous standards used in various IT industries, covering networks, plat-forms, content exchange, translation resources, speech interfacing and more. It will also engage in continu-al dialogue with all standards-setting bodies to ensure the simplest pathway to applying useful standards inreal-world settings.”
4.1.6. Measures aiming at supporting scalability of mature European SMEs
There are many mature SMEs in most European countries that have the capacity to expand internationally,but hesitate for a variety of reasons, the most important being that there is no real incentive to seek adven-ture in our risk-averse continent. While recognising the important steps forward in this direction already ini-tiated by DG Enterprise (e.g. DG Enterprise, Promoting international activities of SME), LT-Innovate believesthat the European Commission, as the main driver of European integration, could be much more pro-activein encouraging the “Europeanisation” of such mature SMEs, and help them overcome the psychological, cul-tural, economic, regulatory and fiscal hurdles that come with cross-border expansion.
In this regard, LT-Innovate would encourage the European Commission to consider:• Increasing Access to finance. The financial crisis, delayed payments by clients, ineffective financial man-
agement and limited profitability of the European industrial and services sector have put strains on theaccess to finance for the sector. For this purpose LT Innovate supports the idea of creating a ‘EuropeFund for Innovation’, inspired by existing mechanisms (such as the European Investment Bank loans forSMEs) to support co-investments in technology deployment projects. This Fund could be directly acces-sible by SMEs that have previously been engaged in successful European innovation projects. It wouldoffer subsidised, insured loans to (groups of) SMEs prepared to (jointly) launch and market (portfoliosof) products and services on a European scale and willing to invest in these projects themselves or withthe participation of external investors. This could have a highly positive effect on helping innovativeSMEs to overcome the psychological, cultural and regulatory barriers of collaborating (with potential“competitors”!) and “going abroad”. The LT industry could serve as a pilot target group for experimen-tation by such a co-investment Fund.
• Tax incentives can increase the demand for novelties and innovation by offering reductions on specificpurchases.
• Lead market initiatives programme to highlight successful cases of Europeanisation” and provide toolkits, “recipes”, matchmaking services and practical advice in support of “Europeanisation”. These initia-tives support the emergence of lead markets where the diffusion process of an internationally success-ful innovation (technological or non-technological) first takes off and is sustained and expandedthrough a wide range of different services.
• More systematic and sustained support for SME organisations that act as key catalysts at Europeanlevel. SMEs have to get organised collectively so as to acquire critical mass and make a difference. Theirsupport organisations therefore play a critical role in this regard. Yet, most European SME organisationsare chronically underfunded.
The European Commission’s Communication on Small Business, Big World — a new partnership to helpSMEs seize global opportunities is a good starting point and should be implemented as a matter of priority.
4.2. Strategic Measures: strategic instruments and research agenda
New LT developments call for productising, adoption of standards and addressing reliable, cost-efficient andscalable technological solutions, under an interlinked value chain and LT ecosystem. Usually these develop-ments respond to societal challenges such as resource efficiency, health and ICT, which are key drivers ofresearch and innovation strategies in many industries and companies.
LT strategic offer attempt to maximise business intelligence in enterprises in a language neutral environment(with translation technologies overcoming language barriers) and heading towards a more natural commu-nication interfaces, using a more human communication approach using speech technologies. Intelligentcontent technologies are foreseen not only to provide intelligence in enterprises but also as exponentialquantity of data is foreseen to be stored in both structured and unstructured formats, within the organisa-tion and externally, thus business strategies have to incorporate LT to generate increasing impact on busi-ness performance and awareness, increasing operational intelligence and knowledge sharing and enablingbetter decision-making.
Positive experiences and challenges on LT transfer strategies vary considerably among RTD endeavours.Addressing LT challenges requires a portfolio of research lines and collaboration schemes among LT techno-logical areas as well as with other technological ones; hence building on top of the achievements of ongoingefforts while creating more effective links with industry segments and state-of-the-art LT Vendors.
Instruments
As strategic instruments we see the reinforcement of complementary supply and demand side instrumentssuch as:
• Public-private partnerships and supporting generation of industry ecosystems: focusing on solvingsocietal challenges and enhancing the communication and coordination between private sector andpolicy-makers on the innovation policy needs; this includes the generation and support of Europeantechnology platforms and LT industry ecosystems. The public sector needs to be triggered as test bed and a lead-market as well as led-user centred initia-tive to not only serve as an example of social innovation but also enhance its cost efficiency, improveits services around populations and have state of the art technology.
• Prototyping and pilot projects: Support user centred innovation, having innovations tested by usersand development of user requirements. There is a need of increasing the integration of demand-sideand user-centred aspects in pilot initiatives to also enhance building innovation eco-systems aroundinnovations.
Research Agenda
The META-NET Strategic Research Agenda (META-NET Strategic Research Agenda for Multilingual Europe2020) provides a valuable set of indications with regard to medium- to long-term technology breakthroughsin the field of LT. LT-Innovate seeks to contribute to META-NET’s vision by providing a complementarydemand-driven vision, based on LT industry customers’ needs and expectations. From these demand-drivenscenarios, LT-Innovate will derive innovation opportunities, which in-turn will require research input. Thus,by converging from opposite ends, LT-Innovate and META-NET will identify the key LT R&D&I challenges andopportunities for the next decade.
The proposed Council Decision establishing the Specific Programme Implementing Horizon 2020 (see Annex
1, Section II - Industrial Technologies 1.1.4) identifies LT as key enabler for innovation. LT-Innovate stronglysupports this view, as expressed in our March 2012 Position Paper on “The State and Evolution of theLanguage Industries to 2020 and their Role in Horizon 2020”. Furthermore, calls for LT to be recognised asplaying a key transversal role in supporting many European policy objectives - Future Internet, Digital SingleMarket for content, trans-European services, etc.. LT-Innovate also emphasises that LT can help addressSocietal Challenges by safeguarding multilingualism and removing obstacles to inclusion.
In LT-Innovate’s view, Horizon 2020 is a major opportunity for Europe to boost its innovation potential andregain its global competitiveness. But to be successful, future R&D&I should be funded within realistic valuechain based innovation scenarios driven by commercial players and the implementation of future fundingprogrammes should focus more on achieving results (i.e. solutions) rather than generating paper-baseddeliverables and enforcing the observance of a set of relatively inflexible rules.
All industries pass through various stages of development, growth, stability and decline. These phases canbe measured in terms of market, technology and structures, which include growth, earnings and profitabili-ty. In the development phase, an industry emerges. Several companies are created with an idea and startoperations. As time goes by, those companies are able to growth its market share and expanding its capaci-ty and the industry enters a growth phase. When some companies are established and mature, the industrybecomes mature, gradually slowing its growth, but continuing to improve its profitability. In the last stage,the industry will begin to decline, losing market, sales and profits.
Indeed, each phase requires a different type of approach as the industry faces different opportunities.Companies participating in a specific phase of an industry should behave according industry maturity interms of R&D, marketing or sales strategies. Investors must have different expectations of risk and returns inevery stage. For example: early stages companies provide a high return on investment, as risks are usuallyvery high. Development stage attracts investments through business angels and venture capitals, while thegrowth phases usually attracts equity investors through established funds (typically equity and debtinvestors) who expect a slow and low risk for return on investment. Finally, declining industries attractinvestors focused on mergers, acquisitions and any highly buyouts.
The LT industry maturity model
While maturity models have been defined and applied for many IT industries and concepts such as IT imple-mentation or data quality, LT innovate has performed the first attempt to apply it to the LT industry. In thatsense, the novelty of the LT industry maturity model is not the creation of it as it follows the traditional ITindustry model, but the fact of applying it to deeply understand this industry.
The LT industry maturity model has considered four phases:• Development phase: the industry is in its infancy. A new product is being develop and companies
require a significant amount of cash to develop and promote their products. There are many risks atthis stage: technical problems, inability to meet demand or customer resistance to new products justto name a few.
• Growth phase: if the product is successful, sales will grow and the industry will attract competitors.Substantial efforts are made to improve distribution channels, although competition takes place on thebasis of product innovations rather than price. Companies seek to differentiate themselves and earnmarket share. The effort is focused on marketing efforts and expansion.
• Maturity phase: With product and distribution standardisation and availability, completion shift to costand price. Growth will start to slow to the rate of overall economic growth meaning stable stock invest-ments and income through dividends to investors.
• Decline phase: products and technology begins to become obsolete and eventually will be retired mark-ing the end of its cycle. A decline is inevitable as technological innovations and changing consumertastes adversely affect sales.
The following table describes in detail the industry maturity model considered by LT Innovate for theInnovation Roadmap.
Under a horizontal integration scenario, LT Innovate sees opportunities in the following sectors:
II.a. Government
Over the last five years, government sector has faced the impact of a profound economic crisis. This impacthas been different from one country to another. The European Government market segment has been asteady performer, typically with less volatility than other industries as well as an early adopter of emergingtechnologies.
In Western Europe, most of national governments have been following cut spending policies and profoundeconomic changes under European Central Bank recommendations. In addition, in many countries the finan-cial debt has shift to a public debt as governments tried to avoid systematic failures in the financial sector.While this situation is against IT investment, the crucial need to be more efficient and do-more-with-less ispushing a significant growth in virtualisation and shared infrastructure, outsourcing services and intelligentservices for citizens under innovative partnerships between central and local governments and IT compa-nies.
On top of that, cities around the world are facing increasing populations and the challenges urbanisationbrings — traffic, pollution, resource constraints, water scarcity and sanitation concerns, public safety issues,and more demands on education, healthcare, and social services institutions. The smart city concept arisesfrom the cities need to tackle these urban challenges through coordinated and focused investment. SmartCity project is one that uses smart devices, ICT, and instrumentation technologies to achieve the explicitgoals of improving the quality of life of citizens and sustainable economic development. These goals areachieved via improved service delivery, more efficient use of resources (human, infrastructure, and natural),and financially and environmentally sustainable practices.
Therefore, central and local governments are facing the enormous task of becoming more economically effi-cient and sustainable while they help to improve the fragile financial sector without eroding their develop-ment plans and need for change.
Challenges and Needs driven opportunities
Increasing understanding of the forthcoming challenges and needs for government will help LT industry toidentify sectorial opportunities.
Challenges NeedsThe persistent economic crisis require a redefinitionof government services
Deploying shared services is one of the pieces for theredefined government services
Citizen/consumer transformation pushes public serv-ices transformation Implementing effective digital services
Citizen and Civil servants need getting easy access todata when needed
Digital Government Strategy requires be able toaccess and manipulate open data, machine-readableinformation, mobile information and metadata tag-ging.
Fraud, waste and abuse of public resources are anincreasing concern for public institutions
Governments require to automatically detectingfraud, waste and abuse of resources.
Increasing number of regulations affecting publicservices
Reduce cost of supporting business and regulatorycompliance
The Internet of Things (IoT) is reaching a tipping point Create integrated services that exploit the intelli-gence of IoT
Transforming cities into Smart CitiesPlan and deploy the right and specific strategy to gen-erate smart cities based using technology as the maindriver
Financial and banking industry worldwide continues to be challenged by a significant number of factors thatare impacting financial institutions, including regulatory changes, revenue replacement, customer confi-dence crisis, market consolidation, channel reconfiguration, efficiency reassessment, new entrants and con-stant cost pressure. The industry is no longer as wealthy as it had been, and it needs to make dramatic adjust-ments in business models and cost structures to get back on solid footing. But disrupting current processesis not an easy task given its conservative nature.
For large universal banks in Europe, these issues have been compounded by the various sovereign debtcrises that continued in 2012 and will remain into 2013. In Asia, slowing economic growth, especially withinChina, is causing institutions to re-think the pace of their modernisation plans. In North America, cost reduc-tion (especially in light of new and increasing regulations) still holds sway over many decisions in contrast toLatin America where plans to upgrade core infrastructure continues
Against this new scenario, financial institutions are in a great need for innovation to address new drivers/dis-rupters for both technology and the evolving business model. While most banks are testing initiatives likemobile payments, social media, or cloud services, all these innovations will pay off great value only if theyare properly integrated into the bank processes which will required a cultural shift.
Challenges and Needs driven opportunities
Increasing understanding of the forthcoming challenges and needs for finance / banking will help LT indus-try and companies in these industries to improve planning and optimise their strategic IT planning andspending in following years.
Challenges NeedsRegulation for finance / banking industry continues togrowth to improve industry health
Increasing analytics capabilities to maximise risk-adjusted returns on capital
Banks and financial institutions' reputation is highlycompromised after many scandals
Controlling, reviewing and managing operationalrisks
Internal and external threats continue under con-strained IT budget scenario Improve security and data loss prevention
Social is becoming the new channel Banks and financial institutions need to tackle itssocial strategy
Smartphone adoption tops the 50% mark in EuropeAmong other opportunities, banks must define itspositioning in the mobile payment where outsidershave already brightened the path to follow
Big Data in Finance: credit cards, ATMs, transactions… How to develop strategies for addressing the chal-lenge of Big Data
Customer confidence in the banking industry is thelowest in all story
Gaining customer confidence again with innovationto meet service expectations
Utilities and energy industry is facing a challenging situation. It should transform itself into a greener andmore efficient industry while maintaining high-quality secure services. This is change is driven by the eco-nomic situation as well new regulations and frameworks. In 1Q13, the European Commission unveiled itsGreen Paper on a 2030 framework for climate and energy policies and the EU unveiled a new package of car-bon emissions and renewable energy targets for 2030, which could see the bloc imposing a 40% carbon-reduction target accompanied by a renewable energy goal, which should also be set for 2030. In addition,the EU and Russia signed the Roadmap EU-Russia Energy Cooperation until 2050. The energy partnershipwithin the EU-Russia Energy Dialogue aims at improving the investment opportunities in the energy sectorto ensure continued energy production, secure and expand transportation infrastructure, and reduce theenvironmental impact.
It is clear that the move to a low-carbon economy by 2050 requires smart grids and metering deployment asnoted by European Electricity Grid Initiative (EEGI). However, the existence of legacy energy ecosystems, theon-going standardisation process and the high-cost investment required is delaying its deployment. In theU.K., the government concluded that, for the nation's smart metering rollout, ZigBee Smart Energy Profilev1 and device language message specification (DLMS)/companion specification for energy metering(COSEM) will be the home area network (HAN) application layer standards. Several initiatives have been putin place across Europe to start deploying renewal energy plants, partial smart grids, increasing the numberof energy plants and pipelines to secure and transport infrastructure.
Challenges and Needs driven opportunities
Increased understanding of the forthcoming challenges and needs for energy companies will help LT indus-try and energy stakeholders to improve planning and optimise their strategic IT planning and spending in fol-lowing years.
Challenges Needs
Regulation for utilities / energy industry continues togrowth to improve industry security and reduce risks
Controlling, reviewing and managing operationalrisks
Customer and regulators are looking for ways toreduce energy costs
Find alternative revenue streams and increase ratesto raise revenue
Outage Prevention, Readiness, and Response is amajor priority From reactive to predictive company
IoT (Internet of Things) is a promise but the businessvalue is yet to be seen
Find significant business cases for the use of sensorsand machine data exploitation
Capture the opportunity that represents HEM(Home Energy Management) before other competi-tors
Find the killer application for HEM
Pervasive integration of device-level informationprocessing capability and networking/communica-tions is rapidly increasing
Identify the integration evolution for the utility net-works
Sustainability is major concern for cities and citizens Incorporate sustainability into products
Oil & Gas industry behaviour is shaped by political, economic, social/environmental, and technological fac-tors. While some of them remain constant during long periods (such as some regulations), other factors arequite volatile and produce dynamic changes to this industry.
During the late months, the industry is facing increasing tensions and unrest in the Middle East, especiallyassociated with Iran and Syria and growing influence and competitiveness of state- owned/controlled oilcompanies in China, Russia, and Brazil. At the same time, new security regulations, reporting requirementsand EH&S and EAM applications are required due to recent major incidents around the word combined (e.g.,Macondo [in the Gulf of Mexico] and San Bruno, California) with tighter regulation of commodities tradingin the United States and the European Union (Dodd- Frank, EMIR, REMIT, MiFID II).
On top of that, the industry is living some profound changes not only due to the four pillars but also due tothe dividing line between engineering technologies and IT continues to blur.
Advancements in seismic imaging technologies, increased access to high- performance computing (HPC)resources, price/performance improvements in sensor technologies allow to invest and manage a larger andmore complex portfolio of capital projects required to develop unconventional liquids (tight oil, oil sands),deep-water offshore and arctic resources.
Challenges and Needs
Increased understanding of the forthcoming challenges and needs for Oil & Gas companies will help LT indus-try and Oil & Gas stakeholders to improve planning and optimise their strategic IT planning and spending infollowing years.
Challenges Needs
Increase number of threats in IT, assets and regula-tion
Focus on HSSE (Heath Safety Security Environment)and IT Security
Customer and regulators are looking for ways toreduce oil & gas costs
Find alternative revenue streams and increase ratesto raise revenue
Create enhanced decision-making & operation work-flow Shortage of IT and analytical talent
IoT is a promise but the business value is yet to beseen
Find significant business cases for the use of sensorsand machine data exploitation
Optimise production due to maturing reservoirs andthe fact that public opinion is against hydraulic frac-turing (fracking) and offshore / artic development
Continue the use of analytics to exploit the currentresources more efficiently
Changes to governance, risk, and complianceprocesses related to tighter regulation of commodi-ties trading in the United States and the EuropeanUnion
Upgrading Energy Trading and�Risk Management(ETRM) Applications
The need to manage a larger and more complexportfolio of projects as capital spending continues togrow, with over $19 trillion forecast worldwide for2011–2035
Companies need to put more emphasis on earlystage planning, use more sophisticated risk manage-ment, adopt enterprise project portfolio manage-ment (PPM) frameworks, and improve collaborationamong stakeholders
National healthcare systems are in transition around the world. While some countries face structuralchanges triggered by an unbalance between the demand and the supply; others are discussing the concernssuch as the cost and quality of care, healthcare reform, Medicare and Medicaid, issues surrounding privateinsurance, and the continuing struggle to care for the uninsured population in the United States to the fore-front of national discussion.
As patients' expectations on care quality, longer life expectancy, and the increasing incidence of non-com-municable diseases such as chronic heart failure, chronic obstructive pulmonary disease (COPD), diabetes,and mental illnesses increase, healthcare systems, many times poorly equipped, need to expand the bound-aries of the healthcare service delivery model.
In addition, cost pressure for European healthcare services is increasing as health spending falls largely with-in the government budgets, which are now under severe scrutiny because of the burden of public debt.
As a result, the transition derives not only in transforming services but also in mergers and group services,as the industry requires to:
• Achieving efficiency targets. For example, the NHS in England is mandated to save £20 billion by 2015. • Transforming the care delivery model: to cope with the increasing complexity of conditions and greater
comorbidities experienced by chronic disease patients are impacting the ability of care providers todeliver person-centred care that meets individuals' needs.
• Aligning IT infrastructure with the ever-changing business needs: Compliance requirements, organisa-tional changes, and the immediate need for patient information at the point of care many times clashwith the capabilities of legacy systems to adapt.
• Defining new sourcing models and technology selection metrics: The procurement process is no longerfocused only on the pricing-functionality pair — agility of deployment and organisational and financialrisk mitigation aspects are becoming increasingly important.
Challenges and Needs
Increased understanding of the forthcoming challenges and needs for healthcare will help LT vendors opti-mising their strategic approach to the market.
Challenges Needs
Dealing with cost pressures Achieving efficiency targets
Cope with more regulationsServing an aging population with/and increasingnumber of chronic conditions
Transforming the care delivery model
Providing services under staff shortages Aligning IT infrastructure with the ever-changingbusiness needs
Maintaining safety and quality of service Defining new sourcing models and technology selec-tion metrics
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