Day: April 21, 2009

Economic Power Of Language

What language/s should you or your children learn to position yourselves best for global success in the future or to minimise impact of downturns?

The ability to back a winner perhaps different to your native tongue or to connect between languages (speaking two or more languages well) becomes even more import because of the associated network effect benefits and the economic power of the home country/countries e.g. Gross Domestic Product (GDP) or more strategic measures like politics, technology or more brute force influence like their ‘defense’ force.

The most important languages today (an over simplified list with some flaws no doubt) are (in millions) –

< 1,500m English

< 1,300m Mandarin

< 700m Hindi/Urdu

< 500m Bengali, Spanish, Arabic

< 300m Russian, Portuguese, Japanese

< 100m The Rest

This list is rough but effective in ranking those that speak a language as their primary or secondary language. It may change a little in the < 100m range once we consider those who speak three or more languages but overall it is largely a good picture.

I am a great believer of the network effect. The first telephone was not very useful by itself but now we have billions around the world it starts to get pretty useful. The cost of the ability to talk to the second telephone was pretty much the same as the first, plus of course the interconnection cost between households.

The most recent telephone in the world now (perhaps a grandmother in the UK or a teenager in China) now has a very powerful tool in their hand for a fraction of the absolute cost of the original one, most importantly the incremental cost of having the ability to communicate with others on the network is NOT the same again per person/household, it is something like ten orders of magnitude less.


The same can be said for email, traditional mail, TV, iPods, Mobile Phone SMS/Text, iPhone Appstore, SWIFT (the main interbank system for moving money) and lots more technology or services or user experiences.

It can even apply to subtle quirky things like the ability for millions of Mumbai residents to get a hot lunch delivered from home each day for a very low cost using the Tiffin Box network or the ability for Nokia users to pick up hundreds of millions of other Nokia handsets and start using it very efficiently instantly.

Now that the world is in a global financial crisis without any doubt (it was obvious to most it was coming from October last year), the role of language and the associated network effect becomes worth considering.

So which languages have more economic power?

Clearly Mandarin is powerful but the GDP per capita is low in China so it is probably lower than English but maybe not that much lower over the coming years if China continues to grow and English speaking nations like the US and UK decline a little.

English is exploding as second or third languages in China so joining the two top languages will help cement China’s success if they stay the course.

India and the sub-continent generally has relatively low per capita GDP too so while they have good growth it is unlikely Hindi/Urdu speakers will move out of their unique second tier position in the next twenty years. However there are over 65m English speakers in that group so their network effect is large indeed as a bridge.

Meanwhile English is now the defacto language across more international commerce and international law entities so it will probably remain the most economically powerful (not least because the top 3 or 4 share markets are also conducted English language).

The top three will be highly resilient too because of their strong network effect (non-resident Indians and Chinese globally are a major force in their own right).

The next band is the most interesting, Arabic and Spanish have substantial numbers and very large network effect to English and a majority of the <100m languages so they are in a unique position for breadth of connection across the smaller pools. Their influence is also typically lower GDP per capita but has some huge outliers in the very wealthy (e.g. middle east natural resources) and also as a result provided those wealthy and powerful don't make bad investment and political decisions will probably be the most resilient of groups for the next twenty years and possibly thousands of years.

Bengali is also in this third band but with low GDP, volatile growth, health and political challenges it will probably remain in a similar tier for the foreseeable future.

The next band is < 300m and there is no doubt Russian is the most powerful here in the long term because of natural resources but isolation in geographic, legal and commercial ways will hold them back from moving up substantially. Meanwhile Japanese is very strong and remains an economic powerhouse but growth will be low in economic terms so they are unlikely to move out of their band unless the continue to developer bridges to the major tiers particularly Chinese and return to the earlier post war progress made with English.

The final band has many traditionally powerful groups including French, German, Pujabi, Wu, Cantonese (Yue Yu), Marathi and more. Most of these will continue to grow in influence but mainly as a result of the network effect generated by learning other languages, particularly English.

Of special note is Cantonese, they have been the primary source of Chinese immigration to the Anglosphere for 150 years plus have a very high percentage of speakers of English and Mandarin. Cantonese speakers are uniquely positioned to be the bridge language and culture globally between the two very different leaders English and Mandarin.

It will be an interesting future for the next generation regardless of these views. My winner predictions are English followed by daylight, then Chinese and thereafter the top 9 will remain largely unchanged with Cantonese possibly sneaking into tenth place ahead of traditional European, African and Asian challengers.