Over at hangingtogether.org Karen notes that the CPSO at Library of Congress have announced that:
The major authority record exchange partners (British Library, Library of Congress, National Library of Medicine, and OCLC, Inc., in consultation with Library and Archives Canada) have agreed to a basic outline that will allow for the addition of references with non-Latin characters to name authority records that make up the LC/NACO Authority File.
This is a great step, the LC/NACO authority files form a rich web of data that can be used to improve many things, including search as Karen mentions.
The only question is... why has it taken so long to accept non-latin characters in library land?
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