TIGA Comments on Zurich Insurance Report Conclusions

August 31, 2011 -

UK video game industry trade group TIGA said today that high technology businesses in the region were at risk of a "brain drain and skill shortages," complicated and compounded by the existence of tax breaks in other countries. The group has long sought tax breaks and incentives for the video game industry, but the financial downturn and austerity measures in the UK forced the government to abandon any measures that were on the table at the time. TIGA made the comments following a report ("The Technology Hazard Warning Report") by Zurich Insurance, which revealed that 57 percent of the UK’s mid-sized technology companies (turnover of £5 - £30 million per annum) feel that they are at risk from losing skilled employees.

The report (p. 10) offers this conclusion:

"Many qualified workers are exploring the opportunity to work abroad, with an estimated 67 per cent of IT workers considering or having applied for a position overseas according to a study by the IT job board. Portability of skills, coupled with higher salaries and the chance to enhance lifestyle are cited as the key reasons for considering a move abroad…Experts warn that the lack of students opting to study technology related subjects, coupled with tax breaks offered by other countries to entice business, means we are compounding problems further for the future."

Dr Richard Wilson, TIGA's CEO, concluded that the report confirms three of the trade groups long standing arguments: the UK is in a precarious position when it comes to "brain drain" because the region is losing highly skilled IT workers to other regions; low numbers of students studying technology subjects such as computer science is creating recruitment problems for the industry; and tax breaks that help with games production in other regions are hurting the UK.

"To surmount the challenges posed by the brain drain and skill shortages we need to incentivise students to study subjects such as mathematics and computer science," said Wilson. "Additionally, we need the Coalition Government to enable UK high technology businesses to compete on a level playing field. Many of our key competitors benefit from generous tax breaks. The UK games industry does not. TIGA will continue to make the case for a tax break for games production and for improved R&D tax credits."

More details on the Zurich Insurance report can be found here.


 
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