UK development sector losing international status

UK development sector losing international status
Will Freeman

By Will Freeman

December 8th 2008 at 12:21PM

National industry could slip to fifth in global rankings, falling two places in two years

The UK’s development sector may be about to drop to fifth place in the global rankings, from third place in 2007, reports Edge.

In a new report by the National Endowment for Science, Technology and the Arts, titled ‘Raise the Game’, it was suggested that the possible drop in standing relates to a “severe skills shortage, funding crisis and the industry’s poor record for online development”.

Speaking of the UK’s dwindling presence in the international game development sector, Ian Livingstone, creative director at Eidos, who also spoke of the number of studios closed or bought by foreign companies, said: "The UK is becoming a work-for-hire nation and this trend seems certain to continue unless government takes action. Cash tills at games stores might be ringing loudly but not through sales of games developed in the UK.”

NESTA’s report highlights how governments overseas support their own developers, while in the UK companies creating games are having to petition the authorities over issues regarding tax-breaks and opportunities. Jonathan Kestenbaum, NESTA’s chief, is concerned tax-breaks in foreign countries are also causing an exodus of UK development talent to other countries, stating: “In order to put a halt to this, the UK needs to wake up to the value in this sector and beat these foreign incentives with our own supportive measures."

NESTA has also provided a series of suggested solutions for the problems facing the UK development sector, proposing a simplified R&D tax credit system, an improvement in skill development and education, increased support for the creation of original IP, a bolstered presence online, and various ways to combat foreign competition.

As the UK faces dropping to fifth place, Canada, China and Korea look set to climb up the rankings, which are based on global revenues.