Study identifies the importance of fiscal incentives in production to attract a first-rate workforce
Skills gaps and shortages are prevalent across the UK’s digital content production sectors, particularly at the mid and senior levels, a BFI report has identified.
Recruitment and retention challenges at these levels are considered the most critical for providing key leadership, according to the study, titled ’Skills Scoping Study for the UK’s Digital Content Production Sectors’, which includes animation, video games, visual effects (VFX) and post-production. At these levels, valuable skilled talent is most readily hired or poached by other companies, sectors, and countries.
The study identifies the importance of fiscal incentives in production to attract a first-rate workforce. The government’s publication last week of the detail behind the UK’s new increased expenditure credits for animation and the proposal to introduce additional tax relief for VFX go some way to helping secure the UK’s competitiveness as a hub for production overall. However, recruitment and retention of staff from Europe has become more complicated and expensive for UK companies because of the need for work permits and visas and other logistical issues in the wake of the UK’s exit from the European Union.
“The UK’s digital content production sectors are a major international success story and a crucible for R&D [research and development],” said Rishi Coupland, BFI director of research and industry innovation. “Investing in skills for these high-potential creative companies is not only about supporting and driving economic success, it is also about improving routes into the industry, driving more inclusion, boosting the UK’s R&D capabilities both for the screen sector and for the wider UK high-tech sectors, and sharing the benefits of growth.”
According to the study, the workforce was ill-equipped to meet the surge in demand after the Covid-19 pandemic for UK digital screen content, especially in the video games and VFX sectors. There is insufficient and inconsistent training investment, especially in smaller companies and for workers who were rapidly promoted and/or took on more responsibility to meet increased demand.
The research was undertaken by specialist consultants Olsberg SPI and commissioned to better understand the range of pressures faced by the sectors.
It demonstrates that digital content production sectors deliver considerable economic value. Based on the latest calculations for the respective UK sectors within the domestic market, immersive content generated £660m in sales in 2018; animation was valued at £1.5bn in direct gross value added (GVA) in 2019; VFX content generated £1.68bn in GVA in 2019; the video games consumer market was valued at £7bn in 2022; and post-production generated £2.2bn in revenue in 2022.
The report identifies that the sectors are experiencing a period of increased uncertainty as a result of factors which include fluctuating commissioning production spend, exacerbated by recent US actors’ and writers’ strike action pausing projects; increased international competition offering sizeable tax reliefs and beneficial working conditions; rapid technological advances requiring new skills, particularly in the field of artificial intelligence (AI); and difficulties establishing effective and sustainable training budgets alongside other development and production costs.
A further key area of deficit is among recent graduates, particularly in people skills and their ability to work effectively across industry workflows and teams. This is in part owing to a lack of investment in industry research and trend tracking at Further Education Institutions (FEIs) and Higher Education Institutions (HEIs).
There are also still persistent barriers to creating a more inclusive workforce, owing to recruitment practices, an emphasis on degree-level training and a lack of consistent, comprehensive and intersectional data collection hindering the sectors’ ability to respond to challenges.
The scope of research for the study has included the review of 53 existing sector research and policy reports, articles, and datasets; 22 individual consultations with stakeholders across industry, research, and policymaking; five focus groups; and attendance at trade body/ skills group meetings. In addition, six case studies were undertaken, with Aardman Academy, BAME in Games (BiG), Escape Studios, Gorilla Group, NextGen Skills Academy and StoryFutures Academy.
Recommendations for areas of research for future growth include quantifying employer investment in skills training and recruitment to show where the gaps are; assessing the current impact and short-term sectoral changes caused by AI technology; aligning effective models that bridge training programmes with industry in order to directly link to, and capitalise on, the work of the BFI Skills Clusters, ScreenSkills, as well as the Skills Task Force’s industry proposals; and identifying international best practice, including the role and effect of fiscal incentives.
“Making the right investments in skills and workforce development and designing programmes to ensure workers gain valuable skills for required roles will help to grow companies and ensure their competitiveness, and at the same time ensure individuals can build sustainable careers in these fast-moving sectors,” said Sara Whybrew, BFI director of skills and workforce development. “We must also ensure our investment in and commitment to training are coupled with support that aids businesses to deploy best practice approaches in good work, so talent is also retained.”
”We welcome the release of the study and the insight it gives us into digital production skills in the UK,” added Georgia Brown, chair of the Screen Skills Task Force. “The study will support the Task Force in delivering on its promise to find ways to join up sector skills strategy across physical and digital production.”