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Why multilingualism is good for economic growth

If your strategy is to trade only with people that speak English that’s going to be a poor strategy.

Top US economist Larry Summers recently tweeted this in relation to America’s focus on its so-called special relationship with the UK. And he’s right. The economic impact on the US – or any other country – that closes off its trade barriers with countries that are different to it would be enormous.

Language matters on a large-scale national level and at the level of smaller businesses. One famous cheese steak shop in Philadelphia, Geno’s, used to refuse sales to customers placing their orders in languages other than English. Its sign announcing this to customers was only taken down in 2011.

The sign on Geno’s shop window, which was taken down in 2011. Brian Zambrano / flickr, CC BY-NC-SA

When just one small business decides to take this closed approach, the effect on the wider economy is negligible. With the election of Donald Trump to the presidency, however, there now is a resounding protectionist sentiment in the US – which could have a much bigger effect on the economy. Trump’s emphasis on an “America First” trade policy is in stark contrast with decades of the US being the biggest promoter of free trade. This isolationist rhetoric seems to be closing the door to exchange, innovation and growth. And yet, free trade has made us all prosperous.

The rise of ancient civilisations, China, Egypt, Greece and Rome, came down to success in trade across cultures. Early traders already knew that they needed to understand their clients to produce a good economic return across language divides. Among them was Marco Polo, the successful multilingual merchant doing business from the Mediterranean to China.

Similarly today, clued up entrepreneurs will have multiple languages on their radar. I found numerous examples when researching my book Linguanomics. What is the Market Potential of Multilingualism?. Take Facebook’s founder, Mark Zuckerberg, who is learning Mandarin. His wife’s family is Chinese, so you might say he is personally motivated to do so. But he also has a huge market-driven incentive, as his company has long been trying to penetrate China’s market.

In this, he follows an old mantra that was most famously expressed by Willy Brandt, the former chancellor of the Federal Republic of Germany: “If I’m selling to you, I speak your language. But if I’m buying, dann müssen Sie Deutsch sprechen [then you have to speak German]”. This shows that now too, the customer is king.

The economic power of language

Britain’s push for fresh markets outside the European Union is likely to lead to new language needs. Companies responding to this challenge will depend on a multilingual skills pool for cross-border trade. This needs free movement since many British people claim that they are bad at speaking languages other than English. Alas, current government statistics show that the UK already loses about 3.5% of its GDP every year as a result of a lack of language skills in the workforce.

By contrast, the US with its historically rooted cultural mix has a vast language pool that lies hidden beneath its apparent veneer of monolingualism. In fact, despite Geno’s insistence, English is not the official language of the US. This is in recognition of the country’s diverse cultural make up. But if language monochrony is strategically promoted in the US at the expense of the dormant heterogeneity, the economy will suffer. Indeed, recent studies have shown that one in six US businesses is losing out due to lack of language skills and cultural awareness in their workforce.

Other countries display how it’s possible to exploit their multilingualism as a resource with exchange value in the globalised economy. In Switzerland, for example, the economic value of multilingualism is estimated to be 10% of its GDP. This is because people in many businesses and organisations can easily operate in several languages.

If America’s recent protectionist tendencies catch on in the UK and EU, countries like China and India, as well as Mexico, Indonesia and Turkey are likely to gain. In this more diversified world economy English may in due course well become less prominent. Its diminishing position would be ironic if it happened as a result of trying to “make America great again”.

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