A Risky Business? The Role of Incentives and Runaway Production in Securing a Screen Industries Production Base in Scotland





screen industries, tax incentives, Scotland, studio complex infrastructure

How to Cite

Champion, K. M. (2016). A Risky Business? The Role of Incentives and Runaway Production in Securing a Screen Industries Production Base in Scotland. M/C Journal, 19(3). https://doi.org/10.5204/mcj.1101
Vol. 19 No. 3 (2016): place
Published 2016-06-22


Despite claims that the importance of distance has been reduced due to technological and communications improvements (Cairncross; Friedman; O’Brien), the ‘power of place’ still resonates, often intensifying the role of geography (Christopherson et al.; Morgan; Pratt; Scott and Storper). Within the film industry, there has been a decentralisation of production from Hollywood, but there remains a spatial logic which has preferenced particular centres, such as Toronto, Vancouver, Sydney and Prague often led by a combination of incentives (Christopherson and Storper; Goldsmith and O’Regan; Goldsmith et al.; Miller et al.; Mould). The emergence of high end television, television programming for which the production budget is more than £1 million per television hour, has presented new opportunities for screen hubs sharing a very similar value chain to the film industry (OlsbergSPI with Nordicity).

In recent years, interventions have proliferated with the aim of capitalising on the decentralisation of certain activities in order to attract international screen industries production and embed it within local hubs. Tools for building capacity and expertise have proliferated, including support for studio complex facilities, infrastructural investments, tax breaks and other economic incentives (Cucco; Goldsmith and O’Regan; Jensen; Goldsmith et al.; McDonald; Miller et al.; Mould). Yet experience tells us that these will not succeed everywhere. There is a need for a better understanding of both the capacity for places to build a distinctive and competitive advantage within a highly globalised landscape and the relative merits of alternative interventions designed to generate a sustainable production base.

This article first sets out the rationale for the appetite identified in the screen industries for co-location, or clustering and concentration in a tightly drawn physical area, in global hubs of production. It goes on to explore the latest trends of decentralisation and examines the upturn in interventions aimed at attracting mobile screen industries capital and labour. Finally it introduces the Scottish screen industries and explores some of the ways in which Scotland has sought to position itself as a recipient of screen industries activity. The paper identifies some key gaps in infrastructure, most notably a studio, and calls for closer examination of the essential ingredients of, and possible interventions needed for, a vibrant and sustainable industry.

A Compulsion for Proximity

It has been argued that particular spatial and place-based factors are central to the development and organisation of the screen industries. The film and television sector, the particular focus of this article, exhibit an extraordinarily high degree of spatial agglomeration, especially favouring centres with global status. It is worth noting that the computer games sector, not explored in this article, slightly diverges from this trend displaying more spatial patterns of decentralisation (Vallance), although key physical hubs of activity have been identified (Champion). Creative products often possess a cachet that is directly associated with their point of origin, for example fashion from Paris, films from Hollywood and country music from Nashville – although it can also be acknowledged that these are often strategic commercial constructions (Pecknold). The place of production represents a unique component of the final product as well as an authentication of substantive and symbolic quality (Scott, “Creative cities”). Place can act as part of a brand or image for creative industries, often reinforcing the advantage of being based in particular centres of production.

Very localised historical, cultural, social and physical factors may also influence the success of creative production in particular places. Place-based factors relating to the built environment, including cheap space, public-sector support framework, connectivity, local identity, institutional environment and availability of amenities, are seen as possible influences in the locational choices of creative industry firms (see, for example, Drake; Helbrecht; Hutton; Leadbeater and Oakley; Markusen).

Employment trends are notoriously difficult to measure in the screen industries (Christopherson, “Hollywood in decline?”), but the sector does contain large numbers of very small firms and freelancers. This allows them to be flexible but poses certain problems that can be somewhat offset by co-location. The findings of Antcliff et al.’s study of workers in the audiovisual industry in the UK suggested that individuals sought to reconstruct stable employment relations through their involvement in and use of networks. The trust and reciprocity engendered by stable networks, built up over time, were used to offset the risk associated with the erosion of stable employment. These findings are echoed by a study of TV content production in two media regions in Germany by Sydow and Staber who found that, although firms come together to work on particular projects, typically their business relations extend for a much longer period than this. Commonly, firms and individuals who have worked together previously will reassemble for further project work aided by their past experiences and expectations.

Co-location allows the development of shared structures: language, technical attitudes, interpretative schemes and ‘communities of practice’ (Bathelt, et al.). Grabher describes this process as ‘hanging out’. Deep local pools of creative and skilled labour are advantageous both to firms and employees (Reimer et al.) by allowing flexibility, developing networks and offsetting risk (Banks et al.; Scott, “Global City Regions”). For example in Cook and Pandit’s study comparing the broadcasting industry in three city-regions, London was found to be hugely advantaged by its unrivalled talent pool, high financial rewards and prestigious projects. As Barnes and Hutton assert in relation to the wider creative industries, “if place matters, it matters most to them” (1251). This is certainly true for the screen industries and their spatial logic points towards a compulsion for proximity in large global hubs.

Decentralisation and ‘Sticky’ Places

Despite the attraction of global production hubs, there has been a decentralisation of screen industries from key centres, starting with the film industry and the vertical disintegration of Hollywood studios (Christopherson and Storper).  There are instances of ‘runaway production’ from the 1920s onwards with around 40 per cent of all features being accounted for by offshore production in 1960 (Miller et al., 133). This trend has been increasing significantly in the last 20 years, leading to the genesis of new hubs of screen activity such as Toronto, Vancouver, Sydney and Prague (Christopherson, “Project work in context”; Goldsmith et al.; Mould; Miller et al.; Szczepanik). This development has been prompted by a multiplicity of reasons including favourable currency value differentials and economic incentives. Subsidies and tax breaks have been offered to secure international productions with most countries demanding that, in order to qualify for tax relief, productions have to spend a certain amount of their budget within the local economy, employ local crew and use domestic creative talent (Hill). Extensive infrastructure has been developed including studio complexes to attempt to lure productions with the advantage of a full service offering (Goldsmith and O’Regan).

Internationally, Canada has been the greatest beneficiary of ‘runaway production’ with a state-led enactment of generous film incentives since the late 1990s (McDonald). Vancouver and Toronto are the busiest locations for North American Screen production after Los Angeles and New York, due to exchange rates and tax rebates on labour costs (Miller et al., 141). 80% of Vancouver’s production is attributable to runaway production (Jensen, 27) and the city is considered by some to have crossed a threshold as:

It now possesses sufficient depth and breadth of talent to undertake the full array of pre-production, production and post-production services for the delivery of major motion pictures and TV programmes. (Barnes and Coe, 19)

Similarly, Toronto is considered to have established a “comprehensive set of horizontal and vertical media capabilities” to ensure its status as a “full function media centre” (Davis, 98). These cities have successfully engaged in entrepreneurial activity to attract production (Christopherson, “Project Work in Context”) and in Vancouver the proactive role of provincial government and labour unions are, in part, credited with its success (Barnes and Coe).  Studio-complex infrastructure has also been used to lure global productions, with Toronto, Melbourne and Sydney all being seen as key examples of where such developments have been used as a strategic priority to take local production capacity to the next level (Goldsmith and O’Regan).

Studies which provide a historiography of the development of screen-industry hubs emphasise a complex interplay of social, cultural and physical conditions.  In the complex and global flows of the screen industries, ‘sticky’ hubs have emerged with the ability to attract and retain capital and skilled labour. Despite being principally organised to attract international production, most studio complexes, especially those outside of global centres need to have a strong relationship to local or national film and television production to ensure the sustainability and depth of the labour pool (Goldsmith and O’Regan, 2003). Many have a broadcaster on site as well as a range of companies with a media orientation and training facilities (Goldsmith and O’Regan, 2003; Picard, 2008). The emergence of film studio complexes in the Australian Gold Coast and Vancouver was accompanied by an increasing role for television production and this multi-purpose nature was important for the continuity of production.

Fostering a strong community of below the line workers, such as set designers, locations managers, make-up artists and props manufacturers, can also be a clear advantage in attracting international productions. For example at Cinecitta in Italy, the expertise of set designers and experienced crews in the Barrandov Studios of Prague are regarded as major selling points of the studio complexes there (Goldsmith and O’Regan; Miller et al.; Szczepanik). Natural and built environments are also considered very important for film and television firms and it is a useful advantage for capturing international production when cities can double for other locations as in the cases of Toronto, Vancouver, Prague for example (Evans; Goldsmith and O’Regan; Szczepanik). Toronto, for instance, has doubled for New York in over 100 films and with regard to television Due South’s (1994-1998) use of Toronto as Chicago was estimated to have saved 40 per cent in costs (Miller et al., 141).

The Scottish Screen Industries

Within mobile flows of capital and labour, Scotland has sought to position itself as a recipient of screen industries activity through multiple interventions, including investment in institutional frameworks, direct and indirect economic subsidies and the development of physical infrastructure. Traditionally creative industry activity in the UK has been concentrated in London and the South East which together account for 43% of the creative economy workforce (Bakhshi et al.). In order, in part to redress this imbalance and more generally to encourage the attraction and retention of international production a range of policies have been introduced focused on the screen industries. A revised Film Tax Relief was introduced in 2007 to encourage inward investment and prevent offshoring of indigenous production, and this has since been extended to high-end television, animation and children’s programming. Broadcasting has also experienced a push for decentralisation led by public funding with a responsibility to be regionally representative. The BBC (“BBC Annual Report and Accounts 2014/15”) is currently exceeding its target of 50% network spend outside London by 2016, with 17% spent in Scotland, Wales and Northern Ireland. Channel 4 has similarly committed to commission at least 9% of its original spend from the nations by 2020. Studios have been also developed across the UK including at Roath Lock (Cardiff), Titanic Studios (Belfast), MedicaCity (Salford) and The Sharp Project (Manchester).

The creative industries have been identified as one of seven growth sectors for Scotland by the government (Scottish Government). In 2010, the film and video sector employed 3,500 people and contributed £120 million GVA and £120 million adjusted GVA to the economy and the radio and TV sector employed 3,500 people and contributed £50 million GVA and £400 million adjusted GVA (The Scottish Parliament). Beyond the direct economic benefits of sectors, the on-screen representation of Scotland has been claimed to boost visitor numbers to the country (EKOS) and high profile international film productions have been attracted including Skyfall (2012) and WWZ (2013).

Scotland has historically attracted international film and TV productions due to its natural locations (VisitScotland) and on average, between 2009-2014, six big budget films a year used Scottish locations both urban and rural (BOP Consulting, 2014). In all, a total of £20 million was generated by film-making in Glasgow during 2011 (Balkind) with WWZ (2013) and Cloud Atlas (2013), representing Philadelphia and San Francisco respectively, as well as doubling for Edinburgh for the recent acclaimed Scottish films Filth (2013) and Sunshine on Leith (2013). Sanson (80) asserts that the use of the city as a site for international productions not only brings in direct revenue from production money but also promotes the city as a “fashionable place to live, work and visit. Creativity makes the city both profitable and ‘cool’”.

Nonetheless, issues persist and it has been suggested that Scotland lacks a stable and sustainable film industry, with low indigenous production levels and variable success from year to year in attracting inward investment (BOP Consulting). With regard to crew, problems with an insufficient production base have been identified as an issue in maintaining a pipeline of skills (BOP Consulting). Developing ‘talent’ is a central aspect of the Scottish Government’s Strategy for the Creative Industries, yet there remains the core challenge of retaining skills and encouraging new talent into the industry (BOP Consulting).

With regard to film, a lack of substantial funding incentives and the absence of a studio have been identified as a key concern for the sector. For example, within the film industry the majority of inward investment filming in Scotland is location work as it lacks the studio facilities that would enable it to sustain a big-budget production in its entirety (BOP Consulting). The absence of such infrastructure has been seen as contributing to a drain of Scottish talent from these industries to other areas and countries where there is a more vibrant sector (BOP Consulting). The loss of Scottish talent to Northern Ireland was attributed to the longevity of the work being provided by Games of Thrones (2011-) now having completed its six series at the Titanic Studios in Belfast (EKOS) although this may have been stemmed somewhat recently with the attraction of US high-end TV series Outlander (2014-) which has been based at Wardpark in Cumbernauld since 2013.

Television, both high-end production and local broadcasting, appears crucial to the sustainability of screen production in Scotland. Outlander has been estimated to contribute to Scotland’s production spend figures reaching a historic high of £45.8 million in 2014 (Creative Scotland ”Creative Scotland Screen Strategy Update”).  The arrival of the program has almost doubled production spend in Scotland, offering the chance for increased stability for screen industries workers. Qualifying for UK High-End Television Tax Relief, Outlander has engaged a crew of approximately 300 across props, filming and set build, and cast over 2,000 supporting artist roles from within Scotland and the UK.

Long running drama, in particular, offers key opportunities for both those cutting their teeth in the screen industries and also by providing more consistent and longer-term employment to existing workers. BBC television soap River City (2002-) has been identified as a key example of such an opportunity and the programme has been credited with providing a springboard for developing the skills of local actors, writers and production crew (Hibberd).  This kind of pipeline of production is critical given the work patterns of the sector. According to Creative Skillset, of the 4,000 people in Scotland are employed in the film and television industries, 40% of television workers are freelance and 90% of film production work in freelance (EKOS).

In an attempt to address skills gaps, the Outlander Trainee Placement Scheme has been devised in collaboration with Creative Scotland and Creative Skillset. During filming of Season One, thirty-eight trainees were supported across a range of production and craft roles, followed by a further twenty-five in Season Two.  

Encouragingly Outlander, and the books it is based on, is set in Scotland so the authenticity of place has played a strong component in the decision to locate production there. Producer David Brown began his career on Bill Forsyth films Gregory’s Girl (1981), Local Hero (1983) and Comfort and Joy (1984) and has a strong existing relationship to Scotland. He has been very vocal in his support for the trainee program, contending that “training is the future of our industry and we at Outlander see the growth of talent and opportunities as part of our mission here in Scotland” (“Outlander fast tracks next generation of skilled screen talent”).


This article has aimed to explore the relationship between place and the screen industries and, taking Scotland as its focus, has outlined a need to more closely examine the ways in which the sector can be supported. Despite the possible gains in terms of building a sustainable industry, the state-led funding of the global screen industries is contested. The use of tax breaks and incentives has been problematised and critiques range from use of public funding to attract footloose media industries to the increasingly zero sum game of competition between competing places (Morawetz; McDonald). In relation to broadcasting, there have been critiques of a ‘lift and shift’ approach to policy in the UK, with TV production companies moving to the nations and regions temporarily to meet the quota and leaving once a production has finished (House of Commons). Further to this, issues have been raised regarding how far such interventions can seed and develop a rich production ecology that offers opportunities for indigenous talent (Christopherson and Rightor).

Nonetheless recent success for the screen industries in Scotland can, at least in part, be attributed to interventions including increased decentralisation of broadcasting and the high-end television tax incentives. This article has identified gaps in infrastructure which continue to stymie growth and have led to production drain to other centres. Important gaps in knowledge can also be acknowledged that warrant further investigation and unpacking including the relationship between film, high-end television and broadcasting, especially in terms of the opportunities they offer for screen industries workers to build a career in Scotland and notable gaps in infrastructure and the impact they have on the loss of production.


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Author Biography

Katherine M Champion, The Glasgow School of Art

Katherine is a multidisciplinary researcher based in the Institute of Design Innovation at the Glasgow School of Art. She holds a PhD from the Urban Studies Department at the University of Glasgow.  Katherine's research interests include the importance of place to the creative and digital media industries; innovation and management practices in the creative economy; gender and creative labour; and knowledge exchange.