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

IntroductionDespite 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 ProximityIt 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’ PlacesDespite 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

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