Production incentives are powerful tools for economic growth, enabling governments to attract substantial production activity. A report on global film and television production incentives by Olsberg SPI provided an in-depth analysis of the impact of the incentives on local economies, government investments, and broader cultural outcomes.
For instance, incentives can stimulate direct production expenditure, which supports job creation and infrastructure development. In the Czech Republic, international productions spent CZK9.2 billion (approximately $401.5 million) in 2023, generating significant economic benefits. Spain saw €1.3 billion ($1.4 billion) in local spending from international productions between 2019 and 2022, demonstrating the scale of economic impact that such incentives can attract.
The concept of additionality, or the percentage of activity that would not have occurred without the incentive, is central to assessing the effectiveness of these programs. Notably, in Georgia, 82% of production expenditure between 2018 and 2022 was attributed to the incentive, showing that the program significantly influences production decisions. ROI is another critical measure, with several jurisdictions achieving high economic returns. For instance, in Australia, the Producer Offset incentive had an ROI of 5.89, meaning every dollar invested returned A$5.89 in economic value.
Incentives not only create jobs directly within the film industry but also support employment across various sectors. In Australia, for example, film and television production incentives supported a total of 20,600 full-time equivalent (FTE) jobs in 2022, up from 18,200 FTE jobs in 2021 and 9,000 FTE jobs in 2020. In Georgia, 63% of total production expenditure went towards payroll across 21 community productions, demonstrating the significant employment impact of the incentives in the region.
A stable incentive program can also encourage private investment in studio infrastructure. Georgia exemplifies this, with its competitive incentive program spurring substantial private investment, increasing the number of soundstages from 4 in 2011 to 141 in 2023. Such infrastructure development not only supports current productions but also builds long-term capacity for continued industry growth.
Screen tourism, where audiences visit locations seen in films and series, has become an additional economic benefit of film incentives. The report cites Montana’s tourism boost from the series “Yellowstone,” which attracted 2.1 million visitors in 2021 who spent $730.1 million in the state. Similarly, “Bridgerton” has contributed over £5 million ($6.4 million) to the local economy in the UK’s Bath and Bristol areas, underscoring the tourism benefits tied to high-profile productions.
Overall, Olsberg SPI highlighted that well-designed production incentives are crucial economic tools, delivering direct and indirect benefits through job creation, infrastructure investment, and even tourism. The data in this report strongly supports the argument that production incentives drive economic value beyond initial production costs, making them a beneficial investment for governments globally.
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