EU research indicates that one in eight UK companies believe that they have lost business through their inability to speak their customers' languages or understand their local cultures.
"We cannot assume that everyone speaks English," says Trade Minister Brian Wilson. "Our research shows that the Netherlands, Germany and France are clearly in the lead in terms of their attitudes towards encouraging the development of foreign language skills. We clearly have work to do in raising the status and value of languages if we are to compete effectively."
For starters, the DTI will announce the winners of the National Languages for Export Awards on Tuesday.
"The export market for British firms has gone through numerous changes with rapid growth in Europe and the emerging markets of China and South East Asia," says Sir Peter Parker, chairman of the National Languages for Export Campaign. "Today only 25 per cent of UK exports are to English- speaking markets.".
Among those shortlisted for the Awards is Scottish fish company Whitelink Seafoods. In the 1970s, Marie Sutherland and her husband James employed five people and were struggling to make a living from their fish processing business. Things changed when they were approached by a potential customer in Spain. "He arrived one day out of the blue at the local fish market," says Mrs Sutherland. "He asked if we would be interested in sending fish to Spain, which was almost unheard of at the time. But he said we would have to learn Spanish."
Her first reaction was disbelief. "I was almost 40 and had five children, four of them still at home and I was helping my husband run the business." However, she contacted the Language Centre at Aberdeen University which found her a tutor. "The language took over my life. While I was cooking or driving the cassette would be playing. At bed time my husband would go over my Spanish vocabulary with me. I remember the midnight hours when nothing seemed to sink in and I would burst into tears," she says.
But with tuition, the support of her Spanish contact and a two week stay in Spain, Mrs Sutherland was soon speaking the language well. "All the hard work and tears finally paid off. The business has grown from a few stones of fish for the English market to full lorry loads to Spain. We now employ over 100 people and have our own fleet of refrigerated lorries."
Having cracked the Spanish market, Mrs Sutherland set her sights on France. "This time I had company because my three sons, my daughter and son in law all joined in - although somewhat reluctantly and the French tutor had a hard job keeping us all going." The company now does business with one of France's biggest supermarkets and has opened a depot in France and another in Germany.
"Languages have been the key to opening up all these markets. Without them we would no longer be in business," she says.
As well as language skills, businesses must also understand local cultures. Dr Elisabeth Marx, a director of executive search company Norman Broadbent International and author of Breaking through Culture Shock: What you need to succeed in international business", says that companies should never underestimate the differences in business practices from country to country.
"The ability to manage culture shock in international business makes the difference between success and failure," she says. In France and parts of the Middle East there is a hierarchical approach to business, in China business is all based on personal relationships and in Germany, humour is not appropriate in a business context.
Sheffield-based Gripple UK, a manufacturer of wire products, has also been shortlisted for a DTI Award. It has recognised the importance of getting to grips with different business cultures and now exports 92 per cent of its production overseas.
Until 1993, it focused on English speaking markets such as the US and Australia. "But we knew that South America could offer us some great opportunities to boost our sales and revenues. For one thing, the burgeoning wine industry in countries like Chile presented a lucrative target market where they could use our product to assemble vine trellising," says Jo Sledger, the company's sales administration manager.
However, it was not just a matter of learning the language. "From the start we knew that we would also have to take account of cultural differences," she says. The company used an export consultant who had an understanding of South American business customs and who helped it to establish relationships with distributors in Brazil and Argentina.
"Strong, close relationships with our overseas distributors are absolutely key. They act as our ears and eyes in the field and allow us to get a better understanding of our end customers. They have helped us to build a sales and distribution network that stretches around the globe," Ms Sledger says.
`Breaking through culture shock: What you need to succeed in international business', by Dr Elisabeth Marx, published by Nicolas Brealey Publishing, pounds 18.Reuse content