The People Factor : Media clusters and supply chains in the South East
Recent research commissioned by the South East England Development Agency (SEEDA) has confirmed the South East has a significant media industry, both in terms of size and growth potential, with established business clusters.
The report 'Media Clusters and Supply Chains in the South East' identifies three key business clusters in the region - digital corporate media in Brighton & Hove, publishing in Oxford and film and TV production at Pinewood Shepperton.
The 'people factor'
Traditionally business clusters should display four characteristics: local competition; local collaboration; local supply chains and availability of local support.
However, in the research it emerged the main advantage for media companies operating in the Brighton & Hove and Oxford clusters is access to an established pool of skilled people.
While the report found some of the classic factors were important, others were less so. The most important aspect of media clusters are all 'people factors' - the competitiveness of most media companies is based on the quality of their staff. The main cluster attribute which supports this is availability of skilled labour.
Local collaboration is important and competition can still help stimulate improvement and innovation. Local supply chains were noted as the least relevant of the classic attributes.
Media in the South East
The South East's media industry has a turnover of around £4.5 billion and employs about 35,000 people (excluding freelancers) in an estimated 2,000 media companies.
The region is stronger in newer, digital media sectors such as computer games and digital corporate media than in traditional sections such as TV and newspaper publishing. It is typically stronger in business to business sectors.
It is home of UK leaders in many media sectors. For example:
- Games Electronic Arts, Lionhead Studios
- TV and Film Pinewood Studios
- Cable operators Telewest, NTL
- Mobile operators Hutchison's 3, Vodafone
- e-learning Epic
The South East media industry's turnover has grown by about 60% between 1997/8 and 2001/2. Full time employment has grown by about 8%.
The Brighton & Hove cluster
Cluster type
There are more media companies in Brighton & Hove than in any other town in the South East, employing in total around 3,000 people. They are overwhelmingly web design companies, although other media sectors are represented. These include:
- IT software and services
- Corporate media
- Specialist support
- Digital learning
Geographically, the cluster is very focused around the City of Brighton & Hove - about 70% of companies are in or nearby to the city.
Cluster attributes
The Brighton & Hove cluster has very strong 'people factors' associated with knowledge based business clusters. Other attributes include:
- Reasonable local collaboration
- Some local competition
- Local supply chains are not critical
- Some good specialist local support
- Higher education plays a minor supporting role
Key strengths
Brighton & Hove's positive image is critical to the 'people factors' which support the digital media sector. The city offers an attractive 'lifestyle'. As a result, the city has a young, well-educated workforce.
Future growth
The future growth potential of the cluster is not yet clear. It appears sustainable but is not necessarily characterised by high-margin entrepreneurial business - its GDP per capita is lower than the South East's average.
Support
The Brighton & Hove cluster has benefited from consistent and effective external support, particularly from Wired Sussex and other local support agencies.
The Oxford cluster
Cluster type
Oxford is the best-established and one of the biggest clusters of media companies in the region. It is a cluster of specialised academic, scientific, technical and medical publishers. Of the estimated 250 publishing companies in the South East, the majority (207) are in Oxfordshire, with 103 of these in Oxford. There are many large companies in the cluster, with the largest 50 publishers employing about 3,000 people.
Cluster attributes
Oxford displays the 'people factors' which are critical to a knowledge-based business cluster. Other key attributes of this cluster are:
- Little local collaboration
- Local supply chains and competition not critical
Key strengths
The cluster has two sustainable competitive advantages:
- The availability of skilled staff, freelancers and academic writers and reviewers.
- The international academic reputation of Oxford - which supports the 'people factors'.
Future growth
The cluster is well-established, highly sustainable and has good prospects for growth. Academic, scientific, technical and medical publishers tend to be more stable and profitable than consumer publishers. Scientific publishing was one of the fastest growing media sectors over the past 15 years and the markets still have good prospects for growth.
Support
There is some evidence of supporting organisations in the Oxford cluster although much is still in the process of development. It appears that specific support focused on publishing would be beneficial. Current areas of support include:
- Oxford University - a source of many graduate employees
- Oxford Brookes University - specialised higher education and vocation training
- Oxford Media Network - advice, support and contacts (not specific to publishers)
- Oxford Publishing Society - organises some local events
Pinewood Shepperton cluster
Cluster type
Pinewood Shepperton owns both Pinewood and Shepperton studios - together they offer the biggest film and TV production facility in Europe. They provide production facilities for clients including the leading British and international film and TV production companies and the Hollywood 'majors'.
The total full-time employment for the two studios is around 230 people. When at full production capacity, total employment can reach into the thousands, with many freelancers used.
Cluster attributes
Although physically separate, links between Pinewood and Shepperton Studios are very strong, and there are links both in terms of resources and knowledge.
At least 265 independent companies form 'media villages' at Pinewood and Shepperton, most of which are at least partially dependent on the studios for their business.
Key strengths
The studio operates in an international market. The keys to its competitive success are:
- The quality if its physical infrastructure
- Its ability to attract a highly-skilled workforce from the locality
Future growth
The studios have expanded their facilities during the past few years, particularly with a move into TV production, driven by a change in ownership.
Support
Responsibility for maintaining the skill base which supports the studios is not very clear, as so much is freelance or fragmented between small and micro-sized companies.
Recent initiatives led by South Screen and SEEDA intend to address this issue and give valuable support in:
- International marketing opportunities
- Skills development
- Mentoring
- Support for business development
- Joint tendering platforms
Conclusions
'People factors'
The reports believes that development of the 'people factors' should be the focus of efforts to further develop these clusters. Examples of this include:
- Development of a relevant skills base in each cluster
- Encouragement of networking and collaboration
- nvestment in facilities which support an attractive lifestyle
Local supply chains
Media business do not usually rely on a local supply chains.
London
London, and how media companies in the South East operate in relation to it, is important to the development of the media industry in the region.
Support agencies
Wired Sussex, and other local support agencies, have played a clear role in developing the Brighton media cluster. Many of these support activities could be beneficial to the Oxford and Pinewood/Shepperton clusters.
Broadband
Broadband is essential to many media businesses as they use it to distribute
their (digital) products.