future skills issues affecting industry sectors in wales › 4349 › 1 ›...

FUTURE SKILLS ISSUES AFFECTINGINDUSTRY SECTORS IN WALES

Media and New Media Sector

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FUTURE SKILLS ISSUES AFFECTING INDUSTRY SECTORS IN WALES

Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p4

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p6

2. The Media and New Media Sector in Wales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p7

3. Sectoral Skills Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p11

4. Action on Skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p16

Annex A: References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p18

Annex B: Welsh Sectors in Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p19

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IntroductionThis document is one of a series commissioned by theFuture Skills Wales Research Forum. The overall projectaims to extend and complement the work begun by theoriginal Future Skills Wales project, which forecast futuregeneric skills needs across Wales using forecasting andsurvey data. The current project adds studies of futurevocational skills needs within key sectors in Wales. Eachsector study is based on desk research and qualitativeinterviews with practitioners and employers, and aims toprovide an overview of the sector, the skills issues, andcurrent and potential actions to further strengthen thesector.

Businesses and employees in each of the sectors studiedhave achieved great successes; that is why these sectorshave become important for Wales. Our focus on currentskills issues should not obscure these achievements orthe determination of all concerned to meet current andfuture challenges.

Sector ProfileThe Media and New Media sector in Wales is a hybrid oftwo technologies and traditions:

• video and film for broadcast;

• digital multimedia for all distribution channels includingthe Internet.

The video/film part of the sector has been strong inrelation to the size of the Welsh economy, due to demandfrom the major broadcasters, S4C, BBC Wales and HTVWales. But the independent producers have sometimesbeen limited in their ambitions, reflecting their reliance onrelationships with local broadcasters. This part of thesector faces an uncertain future due to these internalfactors and the external pressures of global competition.

New media and multi-media technologies are beingadopted by these firms, but there is a new generation ofNew Media enterprises which have based their entirestrategies around these. Many of the better knownexamples are based in Cardiff, with others in the Valleysand distributed throughout Wales. Due to the expansionof services based on the new technologies, this part ofthe sector may have clearer growth potential.Infrastructure developments may offer new opportunitiesfor rurally located businesses.

Apart from these considerations, the sector is importantin cultural terms, being a key means of expressing Welshidentity both in Wales and potentially across thedeveloping global media markets.

Estimation of the number of firms and employees is notstraightforward, partly due to the large numbers offreelancers and the volatile nature of the New Media partof the sector. However, current estimates suggest around600 businesses employ around 6,000 in Wales. The maincentre of activity is around Cardiff, with a significantcluster of both ‘traditional’ Media and New Mediabusiness in the North, particularly around Caernarfon.

The occupational profile of the sector is distinctive, withvery few operatives, but significant proportions inprofessional, associate professional, technical, craft andservice occupations.

In employment terms, the sector is smaller in Wales thanis normal, relative to the rest of the UK. The employmentforecast for the sector is for growth, which is seen asfairly modest in terms of absolute numbers, butsignificant in percentage terms - around 28% over tenyears. However employment in the sector is not forecastto grow in importance relative to the UK sector as awhole.

A determining factor will be the extent to which majorpurchasers in Wales are prepared to establish innovativebusiness strategies using new digital technologies.

Skills IssuesSkills issues identified by our study include:

• separation between business, creative and technicalskills;

• skills deficiencies in commercial and marketing areas;

• interactive and new media technical skills needs;

• strengthening skills and entrepreneurial approach innew entrants.

Action on SkillsThe media and new media companies have establishedlinks and groups to address issues for the sector,including skills issues. Detailed action plans have beenprepared for the sector in North Wales.

Themes for ongoing action include:

• strengthening funding and provision arrangements forNew Media, especially the NVQs offered (Cyfle/MediaSkills Wales);

• establishment of a Digital Media Wales Forum, buildingon current work by the New Media Group Wales andon proposals and action in North Wales, to provide anational dimension to action;

• location of skills strategy within a national developmentstrategy embracing New Media;

• within Careers advisory work, emphasis on thedistinction between general academic and vocationalmedia studies.

A number of more detailed recommendations are madeand are summarised in the table below.

Recommendations are also made for further research:

• on the New Media subsector across Wales;

• to extend the research directory recently produced forSgrîn;

• on training provision covering the latest technologies;

• on the destinations of FE media studies students;

• and using an event-based methodology to engagemicro businesses and freelancers.

Executive Summary


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RecommendationsNo. Recommendation When Key Players

1 Disseminate results of qualifications mapping and AVITG work, and Late 2000 ACCAC/NTOsany proposed changes

2 Reinforce messages to independent sector to stimulate demand for ongoing Cyfle/MSW/TAC/S4C/ management and new media training Assembly/CETW

3 Facilitate formation of a Digital Media Wales Forum for companies Start 2000 Employers/WDA/in traditional and new media, to transcend existing boundaries and Assembly/NTOs/Newrepresent the digital content sector on policy and training issues. Media Group Wales/CETWAdapt and adopt existing North Wales cluster development proposals Partners in ‘North Walesfor all Wales. Multimedia Action Plan’

4 Use Digital College to offer and promote supply-chain development From late S4C/Cyfle/MSW/WDA/courses for the sector 2000 Key employers

5 Within the Forum, constitute a global marketing and exploitation From 2001 Employers/WDA/CETW/sub-group to co-ordinate and support the sale of Welsh product, Sgrîn/Cyfle/TAC and building on existing North Wales plans North Wales partners

6 Celebrate and disseminate excellence in HE, FE and Cyfle/ HE/FE/Cyfle/MSW/CETWMedia Skills Wales provision for the sector in Wales

7 Offer the Cyfle/MSW New Media NVQ more widely, and agree the For 2001 Cyfle/MSW and Board, funding arrangements needed to allow this courses with WDA and Assembly/

CETW

8 Identify and co-ordinate sources of investment for new content and ongoing Broadcasters/New Mediaproduction ventures Group Wales/

key employers/WDA

9 Emphasise distinction between ‘general’ academic Media Studies ongoing Careers/schools/FE/HEprovision and vocational provision, and encourage young people – ES/New Deal/CETWespecially females - to consider vocational routes

10 Review and encourage potential for New Media development within 2000 Assembly/WDA/Obj 1rural and Objective 1 areas bidders

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1. Introduction1.1 This document is one of a series commissioned by

the Future Skills Wales Research Forum. The overallproject aims to extend and complement the workbegun by the original Future Skills Wales project,which forecast future generic skills needs acrossWales using forecasting and survey data. Thecurrent project aims to add studies of futurevocational skills needs within key sectors in Wales.

1.2 Businesses and employees in each of the sectorsstudied have achieved great successes; that is whythese sectors have become important for Wales.Our focus on current skills issues should notobscure these achievements or the determination ofall concerned to meet current challenges.

1.3 Each of the individual sector reports iscomplemented by a report on management andinformation technology skills issues across thesectors studied. This reviews the situation in eachsector and draws out common themes andimplications.

1.4 The Media and New Media sector was selected forinclusion in part because of the rapid changesaffecting the sector. On the one hand, theexpansion of broadcast output resulting from theadvent of digital channels, and the growth ofInternet-traded products and services, presentopportunities for those working in broadcast anddigital technologies. This may translate into growthopportunities for the sector in Wales.

1.5 On the other hand, these same developments, andparticularly the technological and market revolutionsassociated with the convergence of broadcast,digital processing, and communicationstechnologies, may weaken the position of Welshproducers within a wider, more competitive market.

1.6 Regulatory and public policy developments willhave a significant bearing on the outcome. But thedevelopment of skills within the sector, to meetthese new challenges and exploit newopportunities, will also be critical in determining thefuture health of Media and New Media companiesin Wales.

Method1.7 The first phase of the study proceeded mainly by

desk research and telephone discussions.

1.8 In the second stage, further meetings were heldwith sector representatives, and employer casestudies were undertaken to extend and deepen theanalysis of vocational skills issues.

1.9 The aim was not to conduct quantitative primaryresearch, but to consult with sector representativesin order to identify perceived skills issues, theactions being taken in response to these, and thepotential for further action or policy development.The published reports should therefore provide aclear introduction to the sector, a ‘snapshot’ ofsector issues, and pointers to current and potentialaction.


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2. The Media and New Media Sector inWales

Definition 2.1 The media/new media sector is not easy to define

because of the many developments which aretending to blur the previously well defined edges ofthe sector.

2.2 At the core of the sector is all the activity relating tothe production and broadcasting of programmes viathe ‘traditional’ electronic media - film, radio andtelevision.

2.3 The market for most of this activity in Wales is quitewell defined - the Welsh broadcasters, especiallytelevision broadcasters, are the customers for mostactivity in these areas. As well as employing manyworkers in these areas, they take output from asubstantial group of independent companies. Theseare producing mainly video-based output, althoughthere are also vital animation and film productionsub-sectors.

2.4 In addition to this activity, however, there is a wholerange of related production which also makes useof new electronic media to produce and deliverprogrammes or ‘content’. These new media areessentially CD-ROM and pc/internet systems.Activity in this area would include website design,electronic games, virtual reality systems, multimediapresentations or training packages, computerisedanimation, or special effects for direct distributionor integration in film or video productions.

2.5 There is already some crossover between these twoareas, and the convergence of broadcast andIT/communications systems is likely to increase theinterdependence of these originally separateactivities.

2.6 The Standard Industrial Classification (SIC) codesused in research were:

• 92.11 film and video

• 92.2 radio and TV

• 72.6 other computer related services.

Sector Characteristics2.7 It follows from the above that there are three main

groups of organisations in the Media and NewMedia sector:

• the major broadcasters;

• independent suppliers to the broadcasters;

• other suppliers working with new electronicmedia.

Number of Firms2.8 The broadcasters are relatively easy to identify:

• BBC Wales and Radio Wales;

• HTV Wales;

• S4C;

• Radio Cymru;

• Independent Radio Broadcasters such as RadioGynnedd (N).

2.9 It is more difficult to give exact numbers ofindependent media suppliers, because many of

these are either small companies or freelances whomay leave and re-enter the market depending ondemand.

2.10 The total number of firms in the sector was reportedby an internal report on the original Future SkillsWales project, covering ‘Media and Multimedia’, asaround 200. A recent survey undertaken byCyfle/Media Skills Wales was mailed to 133 TV andfilm production companies.

2.11 Less is known about the numbers of suppliersworking in new electronic media - this is also likelyto be volatile, given the rapid development oftechnology and the market in this area, and therelatively low cost of entry at the bottom end. TheCyfle/Media Skills Wales questionnaire was mailedto a total of 420 ‘New Media’ companies, with ‘theterm... used in its widest possible sense’ (Cyfle,2000). In combination the two figures suggest asector population of around 500-550 employerorganisations. In addition 115 questionnaires weresent to freelances.

Locations2.12 The main TV broadcasters are based in the Cardiff

area, and this has determined the location of a largeproportion of suppliers in the independent sector,who also tend to be based in and around thecapital.

2.13 Figure 2.1 shows the location of the 86 companieslisted as members on the website of TeledwyrAnnibynnol Cymru (TAC), the trade association forindependent producers in Wales. These are allindependent suppliers to S4C, BBC Wales or HTVWales. Over half are Cardiff based.

Figure 2.1: Locations of TAC Member Companies

2.14 The chart shows that the main exception to this isS4C and an associated group of suppliers of Welshlanguage programming, based in the Caernarfonarea (18 TAC members were based in this area,most in Caernarfon itself).

Employees2.15 Estimates of the numbers working in the sector

exist, but are difficult to support with hard evidence.In forecasts recently produced by BusinessStrategies Limited (BSL, 2000), the populationestimate for people working in organisations withthe SIC codes listed earlier is 6,000 across Wales.However this includes all those working in ‘othercomputer related services’, which may include

Cardiff and area

Caernarfon & area

Other North Wales

West WalesMid Wales

England

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some employees who are outside the New Mediasector as we have defined it.

2.16 The Cyfle/Media Skills Wales survey found that onaverage firms in the TV and Film Production part ofthe sector employed ten full time staff and sevenstaff on contracts of less than one year. For 133firms this would produce a total of around 1,330 fulltime and around 930 part-time staff - however thisexcludes people working within purely New Mediaenterprises.

2.17 Of the 62 employees and freelances responding tothe Cyfle/MSW survey, 42% were aged over 40;most of these were male. The gender split was 67%male, 33% female. 74% were freelances working oncontracts of less than one year, reflecting thesampling method for this part of the survey.

2.18 On this evidence, a reasonable estimate ofworkforce numbers would be around 2,200 or so inTV and Film with another 3,000 to 4,000 in NewMedia (including part-time and freelance workers); atotal of 6,000 or so. Some of these latter may alsobe active in areas which might broadly bedescribed as ‘other computer services’ such as pcand network support, database system design andso on.

2.19 The BSL figure for employment in the sector for theUK as a whole is almost 192,000, meaning thatWelsh employment represents just over 3% of theUK sector total. Employment in the sector in Walesrepresents 0.5% of total Welsh employment.

2.20 Recent forecasts, by Business Strategies Limited,provide an estimate of the broad occupationalprofile of this and the other sectors studied by YorkConsulting. Figure 2.2 below compares the profiles.The media and new media sector has relativelylarge proportions of professionals, associateprofessional and technical staff. Annex B hasfurther comparisons between the sectors studiedfor this Future Skills Wales Sectors project.

Figure 2.2: Sector Occupational Profiles - 2000

Source: BSL Sector Forecast, 2000

Markets and Exports2.21 There is some evidence to suggest that the main TV

and film production sector is restricted in terms ofexports by the retention of copyright on allprogrammes supplied to S4C. This means in effectthat S4C suppliers need to focus, and can surviveby successfully focusing, on a local Welsh market.In contrast to this, as in other sectors themedia/new media sector generally is characterised

by increasingly global supply chains andcompetition. This creates something of a challengefor suppliers working mainly with S4C.

Turnover2.22 An earlier Cyfle report (Cyfle, 1998) estimates the

annual turnover of the Welsh media and televisionindustry at between £160m and £170m per annum.However this may be a conservative estimate in thelight of figures reported elsewhere. For example, theproceedings of the Select Committee on WelshAffairs on Broadcasting in Wales and the NationalAssembly (13th May 1999, quoted in Cyfle, 2000,p71) states the turnover of the sector as £350m. Astudy by the Cardiff Business School (1998), gives asimilar figure of £309m for the annual turnover ofthe media sector.

Sources of Change2.23 An important background factor is the recent

rationalisation of suppliers by S4C, (from 1997). Thecompany, in effect, asked their independentsuppliers to cut costs in exchange for longer termcontracts. This reflected an increasing need to fillbroadcasting time, especially in connection with theintroduction of digital services. The change involveda reduction in overall supplier numbers.

2.24 The biggest factor affecting the future of the sectoris the convergence of traditional and new mediainfrastructures. This means, for example, thatprogramming in previously separate web, broadcastand film technologies is starting to be available indigital format via a number of delivery methods(cable, terrestrial, satellite) and a single piece ofdomestic or mobile equipment. The ramifications ofthis are yet to emerge in full, but, for example, theyseem very likely to affect current funding andregulatory systems for the main broadcasters, withprofound effects on employment and skills needs inthe sector.

Prospects for the Future2.25 One scenario discussed in recent Cyfle reports is

that the number of independent producers will befurther reduced by cost pressures, to form a core ofproducers with close, long-term supplyrelationships with the main broadcasters (especiallyS4C). The Cyfle 1998 report comments ‘it is difficultto imagine production companies competing intelevision production longer term without turningover in the region of £2m - £5m’ (p5); ‘Could we bedown to 10 prominent production companies inWales?’ (p3). The authors note that some of the TVproduction companies surveyed were planning tomove out of the TV market and diversify intomultimedia and corporate productions. Alliancesand mergers were also seen as possible responsesto the tightening of the market.

2.26 However, the results of the Cyfle 2000 survey donot provide a clear confirmation of this trend.Although some companies still noted possible oractual moves into New Media production, twothirds ‘did not envisage a change in their coreoperation - with Broadcast production stillaccounting for 95-100% of their turnover’ (Cyfle2000, p13). ‘The results show only three Welshindependent television production companiesseeing any significant income (over 20%) arising

0% 20% 40% 60% 80% 100%

Farms

Social Care

Tourism etc

Bus/Finance

Media/New Media

Automotive

Food Proc

Electronics

Aerospace

Managers Professions Technical Clerical CraftPersonal Sales Operatives Other


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from digital interactive media in the next five years...this would appear to reflect an abject failure by theWelsh Film and Television Production andBroadcast sector to seriously engage with NewMedia and to address the issue of convergence’(p31).

2.27 Key questions for the future development of thesector are:

• how quickly will the New Media sector grow?

• how quickly will consolidation and decline affectthe existing broadcast production sector?

• Will existing production companies adapt byembracing New Media, or will a largely separatebut parallel New Media sub-sector continue toemerge and eventually outgrow the existingMedia sub-sector?

2.28 The most likely scenario at present seems to be fora slow decline in numbers of firms and workforce inthe more traditional Media businesses (not leastbecause of the ageing profile of the principalswithin the independent workforce, who in manycases left broadcasting companies whenoutsourcing quotas were introduced). Unless thesecompanies can adapt to new technical approaches,and in many cases new markets, they will not moveinto New Media, but instead will gradually bereplaced by a new generation of New Mediaproducers.

2.29 This new generation will base themselves on digitaland interactive technologies, but the larger unitsmay grow to incorporate video and film production.These companies will be able to offer a morecomplete service to broadcasters (who willincreasingly need to offer digital tie-ins tocomplement broadcast material). But thecompetition in this market will be wider - firstly fromthe UK, and increasingly from Europe and acrossthe Atlantic. Therefore, the producers themselveswill either need to become larger to compete, or willneed to form themselves into close coalitions orsupply chains for the same purpose.

2.30 This scenario poses a threat to the existing sectorin Wales, which reflects the existing strong marketpositions of local broadcasters. These may beeroded by the technical convergences noted above,and by corresponding changes in the regulatoryregime. UK and Assembly policies will be animportant factor in the shorter and middle term. TheSelect Committee of 13th May 1999 concluded ‘weurge the National Assembly to recognise theimportance of the broadcasting sector to economicdevelopment in Wales, and, in consultation with theindustry, draw up a strategy for fostering its growth’(Cyfle, 2000, p71).

2.31 One key driver of the development process wouldbe the adoption, by larger companies inside andoutside the media sector in Wales, of newmarketing and communications strategies, or widerbusiness models, involving the use of newmultimedia technologies. An example might be theadoption of strategies based on interactive TV, forexample, where the necessary technologies existand await effective exploitation by major potentialpurchasers.

2.32 It should be noted that unlike the case of the moretraditional broadcasting producers, growth in thepopulation of New Media enterprises may notnecessarily be as concentrated in particular areasof Wales. There may be opportunities to foster thissub-sector as a contributor to employment andwealth creation in rural areas.

2.33 Limitations on the current communicationsinfrastructure can restrict the potential for thesecompanies in the more remote areas, primarilywhere they rely on faster, higher-bandwidthservices. In many such areas cable is not installed,and high speed telephone based services usingasymmetric digital subscriber lines (available fromBT from July) will often not work due to thedistances between the local exchanges and ruralhomes.

2.34 However, the UK government is planning to issuelicenses covering broadband fixed wireless access,which uses reserved areas of the radio spectrum toprovide high speed internet access in rural areas.These services may provide a viable alternative toland-based systems where radio reception is good,and will start to become available followingcompletion of bidding in September 2000.

Forecast of Sector Employment2.35 As noted earlier, new employment forecasts for the

sectors studied by YCL were recently produced aspart of the continuing Future Skills Wales researchprogramme by Business Strategies Limited (BSL,2000). The forecast is for modest but steady annualgrowth in employment, from the current level of6,000 (2000) to 7,700 in 2010. In percentage terms,this is a 28% employment growth over the tenyears. Some New Media employers suggest thatthis may be a significant underestimate - they pointto growth in their own companies of 100% or morein the initial few years of operation.

2.36 Using the BSL figures, one can calculate theemployment quotient of the sector in Wales. This isdone by calculating the extent to whichemployment in the Welsh sector is proportionate toemployment in Media/New Media for the UK as awhole, given the relative sizes of the Welsh and UKworkforces. An employment quotient of 1 indicatesthat the sector in Wales is roughly the size onewould expect in employment terms; scores below 1indicate under-representation of the sector inWales.

2.37 The BSL forecast shows an employment quotient of0.73 for the Media/New Media Sector in Wales in2000. This is little changed by 2010, when theemployment quotient has declined very slightly to0.71. In other words, the forecast suggests that thesector in Wales is currently relatively weak inemployment terms, and that, although it willexperience employment growth, it will fail to makeup any ground relative to the UK as a whole.

2.38 One should note that, due to the concentration ofUK media and new media employment inside theM25, it is possible that the forecast for Englishregions outside London would not be dissimilar tothat for Wales in employment quotient terms. (Anexception might be the South East due to its

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proximity to London). A study for TeledwyrAnnibynol Cymru (TAC, 1998), notes the dominanceof London companies and notes that ‘research...has found that 25% of the programmes listed bythe BBC as “regionally produced” were, in fact,produced by London based companies on locationelsewhere in the UK..’ (p5).

Summary Sector SWOT

Strengths WeaknessesWell established independent sector Key independent workers ageingNational broadcasting infrastructure Lack of market penetration beyond WalesIndigenous training/assessment provision Lack of data on New Media sub-sectorSubstantial research data on media sector No strategy for New Media convergencePolitical interest/support

Opportunities ThreatsInward investment Exposure to broadcast policy changesNew generation of workforce entrants Out migration of younger workers Add New Media to training coverage Loss of markets within WalesIncreased production volumes for digital Reduced budgets for digitalOpportunities for rural locationAdoption of innovative technical approaches by major purchasersPotential for producing more material for export


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3. Sectoral Skills Issues3.1 Figure 3.1 shows LFS estimates of the sector profile

in terms of highest qualifications held. These mustbe treated with some caution because of the lownumbers involved in the sector. This also meansthat no estimate has been made of the proportionswith Level 3 qualifications and with noqualifications, since the absolute numbersgenerated by the estimate were very low.

3.2 However, the analysis does show that, in contrastto most of the sectors studied, the Media/NewMedia sector workforce contains a markedly higherproportion of people with degrees or higher degreesor equivalents (Level 4 and 5).

3.3 Numbers within the workforce holding craft (Level 2)qualifications are relatively low (estimated at10.8%), with very few holding supervisory level(Level 3) qualifications or qualifications atFoundation level. There is, however, a substantialproportion (just over 11%) with no qualificationswhatsoever. The picture emerging, therefore, is of a‘two-speed’ workforce, consisting of a substantial,highly qualified stratum supported by a much lesswell qualified section representing about 22% ofindividuals employed in the sector.

3.4 This picture may give rise to concern if we reflectthat the less qualified section of the workforceappears not to be able to move up to accessopportunities at the higher level. The relativeabsence of Level 3 qualifications suggests that feware taking either the vocational route, or part-timeacademic routes, to higher level qualifications withinthe sector. The stratification of the workforce fits ascenario where workers either enter the sector witha degree or similar qualification, or enter it, andremain, at a much lower level.

Fig 3.1: Estimates of Highest QualificationsProfile, Media/New Media Workforce

3.5 Is there a need for these Level 3 vocational skillsand qualifications within the sector? A ‘TrainingNeeds Analysis for the Multimedia sector inIndustrial South Wales’ produced by the Universityof Wales Institute Cardiff, 1999, noted that ‘an idealrecruit would be a graduate accredited in parallel toNVQ3 in the use of at least one of the industrystandard packages’.

Current Vocational Skills Issues3.6 The main source for current data on vocational

skills issues is the Cyfle 2000 report. It isunfortunate that this is based on a small response;nevertheless it is the best direct informationavailable on the sector.

3.7 The report provides a list of areas where respondingTV and Film production companies felt there wasthe greatest need for training courses. This isreproduced in Table 3.1. The areas in whichindividual respondents felt they would benefit fromfurther training are shown in Table 3.2.

3.8 By combining the rankings in each table, weproduced a table of training needs common to bothgroups, ranked by overall importance (Table 3.3).Though not conclusive, due to the different natureof the two samples, and the low numbers involved,the results do indicate the mix of training needs:

• a strong strand of business development andcommercial skills needs (pitching, finance,copyright, distribution, employment law);

• a significant common need for training in newerdigital and communications technologies (Internetuse and applications, Internet programming);

• training needs to support creative and contentdevelopment work (script development andwriting factual);

• needs in existing technical and supporting areas(video editing, single camera directing and healthand safety).

3.9 These needs are consistent with a perceivedrequirement to develop new markets (first bulletpoint) and new product to meet their needs (thirdbullet point) as well as to utilise new production anddistribution technologies (second bullet point).

0

10

20

30

40

50

60

Level 5 Level 4 Level 3 Level 2 Level 1 NoQuals

perc

ent

per

cent

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Skills Development Provision3.10 It is difficult to access and analyse meaningful and

comprehensive data on skills provision in thesector, mainly due to the need to distinguishbetween general education in the form of ‘mediastudies’, and vocational provision which developsskills needed by practitioners. The latter is providedby Cyfle and Media Skills Wales, as well as by anumber of institutions with a strong vocationalorientation, such as the Newport Film School. Thisprovision includes some New Media elements, suchas the New Media NVQ offered by Cyfle.

3.11 Our information on provision funded by Training andEnterprise Councils (TECs) is incomplete, butsuggests that numbers funded on vocationalcourses directly relevant to the sector are very small- in single figures, for example, for 1999-2000 inboth Mid and South-East Wales.

3.12 By contrast, figures supplied by the Welsh FundingCouncils for provision funded by the FurtherEducation Funding Council for Wales (FEFCW)show that in these two Welsh regions alone, a totalof 6,021 students were enrolled on Media coursesat further education institutions. Clearly, given thesimilar numbers actually employed in the sector inWales, few of these will find work as mediapractitioners with Welsh companies: in most casesthe qualification must be relevant rather as ageneral indicator of academic performance foremployers in other sectors.

Management and IT Skills 3.13 Our analysis indicates that management and IT

skills development is likely to be central for thehealthy development of the sector. Enhancedcommercial skills are likely to be required in themanagement team, as well as better planning andstrategic development skills to identify and exploitdiversification and wider market opportunities.

3.14 In IT, the particularly fast-moving nature of technicaldevelopment for New Media markets creates aparticular challenge for provision planning.

Related Workforce Issues3.15 The Cyfle findings also indicate some other possible

issues for the future composition of the workforce:

Table 3.2: Needs for Further Training(Individuals)

Training Area Percentage Noting Need

Internet use and applications 47Health and Safety 45Successful freelancing 45Pitching to clients/funders/commissioners 42Script development - drama 29Business finance skills 26Copyright/acquisition/contracts 24Distribution: cinema/TV/funded 24E-mail 24Law on location 21Assertiveness 21Word Processing 21Introduction to film 18Camera craft - location/film 18Video editing (non linear) 18Writing factual for TV 18Time management 18Stress management 18Single camera directing 16Negotiating skills 16Employment law 16Finance packages - budgeting etc 16Internet programming 16Graphics, sound and other asset design 16Source: Cyfle/Media Skills Wales

Table 3.3: Training Needs Common to Firmsand Individuals

Training Area Joint Ranking Score

Pitching to clients/funders/commissioners 5Business finance skills 8Internet use and applications 8Copyright/acquisition/contracts 11Script development – drama 12Health and Safety 18Distribution – cinema/TV/funded 23Writing factual for television 25Video editing (non-linear) 29Internet programming 30Single camera directing 30Employment law 41Source: Derivation from Cyfle/Media Skills Wales Data

Table 3.1: Need for Training Courses – TV andFilm Companies

Training Area Percentage Noting Need

Pitching to Clients/Funders/Commissioners 74Business finance skills 39Interactive Production 39Production Research – radio/video/tv 37Copyright/acquisition/contracts 37E-commerce 37Internet use and applications 34Script development – drama 34Negotiating skills 34Multi-camera directing 34Video editing (on-line) 32Single camera directing 32Time management 32New media 32Internet programming – html, Java, asp etc 32Video editing (non-linear) 29Writing drama for television 29Distribution – cinema/TV/funded 29Health and safety 29Multi-media programming 29Multi-media production management 29Writing factual for television 26Presentation skills 26Employment law 26Multi-media production and design 26Source: Cyfle/Media Skills Wales


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• from their results there would appear to berelatively few women in senior positions in theworkforce – however, respondents andcommentators contributing to YCL’s studyquestioned this, pointing out the existence oflarge numbers of women at senior levels inbroadcasting;

• some employers fear that employees trained inadvanced technologies will be tempted awayfrom the firm - indeed perhaps away from Wales,to areas where higher pay is on offer for their newskills;

• the ageing of the independent workforce impliesthe need (assuming that the sector is to maintainitself at least at current levels) to attract newentrants and to enable them to develop by newroutes - the old methods, via in-housebroadcaster training, being no longer available tothe same extent.

3.16 For the major broadcasters, the future remainsuncertain to the extent that existing workforcenumbers may fall in response to changing marketand regulatory conditions. This may release someskilled workers for the independent and New Mediasectors. However, the majors face the same needsfor skills in the development and commercialisationof content based on the new technologies, and willbe competing with the independents and with othersectors for people with these skills. They may facedifficulties in obtaining the right recruits, as theytend to operate relatively formal pay and gradingstructures which are difficult to adapt to conditionsof highly competitive recruitment.

Case Studies3.17 Case studies produced with the help of employers

are provided below to illustrate the themes of thereport.

Case Study: S4C - A Strategic ViewS4C is the Welsh language TV broadcaster providinganalogue and digital channels, most of the content forwhich is commissioned from independent productioncompanies.

The key strategic need is for recognition anddevelopment of Welsh creative talent. Contentdevelopment is the basis for success in the globalmarket. The fortunes of the sector will depend oncombining this creative talent with good technicalskills and a wider commercial vision and ambition:

‘Most production in Wales has hitherto been led bypublic sector demand rather than by the commercialmarket.’

New opportunities for competitiveness and growth willdepend on developing a new commercial vision - ‘thebig challenge is how can Wales be part of thisinternational market for content?’. In recent years theawareness of the need for business skills, as well ascreative talent, has grown in the industry, and ‘thereare some entrepreneurs around’.

This shortage of new enterprise is especially true asregards new media applications - ‘95% of UKregistered websites are inside the M25 - we are waybehind in Wales’. There is a need to reverse theperception that ‘you can’t do it in Wales’.

The S4C policy to consolidate the independentsupplier base has been aimed in part at producinglarger, more competitive organisations, to move awayfrom the old tendency to produce via ‘cottageindustries’. Funding for development will remainconditional on ownership of subsequent rights, butS4C will consider proposals for other arrangements:

‘Much material is rightly and inevitably too local to bemore widely exploitable. But where producers canproduce internationally exploitable material, which canachieve a critical mass, we will be happy to negotiate...to work hand in hand to develop it. S4C can marketthe product more effectively - so there are deals to bedone.’

In meeting the strategic skills needs there is a need tofoster high level vocational provision. It is important todistinguish this from ‘Media Studies’ at school andundergraduate level, which is legitimate in academicterms and as a means of producing a ‘media-literate’population, but does not produce vocational skills.Postgraduate and specialised provision is availablefrom a number of Welsh institutions including theCardiff School of Journalism, Lampeter, the NewportFilm School, and Trinity College Carmarthen, as wellas from Cyfle/Media Skills Wales.

14


Case Study: S4C - Delivering Training DigitallyOne of the key needs in provision for the sector is todevelop entrepreneurialism - Welsh TV ‘doesn’t pay itsway commercially’. Initiatives such as the WalesManagement Council’ s new ‘Enterprise Action’programme will help.

There is a need to deliver wider access to lifelonglearning and this type of training for business. TheDigital College will provide this by offering lifelonglearning services using S4C digital TV broadcasts andTV-based interactive training courses. Digital set-topboxes will provide Internet access. The content willembrace New Media techniques, combining broadcastand website material. A specially developed searchengine will enable users to identify courses of interesteither within the services or externally via colleges. Insome cases it will be possible to purchase anddownload college course material. Expert advice willbe available via website discussions.

A five day TV service based on three hours eachmorning will commence from November 2000. Onestrand will provide support and training for businesses,especially SMEs - for example training needsanalyses, help with exporting, customised languagetraining.

The content for this service will be commissioned fromthe colleges. This will include the audiovisual content,but the key components are the materials and coursedesigns, teaching input, and websites. Colleges will beable to combine their facilities in terms of TV and filmstudios used for Media courses, website design andprogramming expertise, and pedagogical knowledge.

A benefit of this approach is that by developing thecolleges as, in effect, multi-media productioncompanies, it should provide opportunities for theirstudents to obtain experience of new mediaoperations which are real, not simulated. Theoperations will also offer the opportunity to transcendboundaries between media, IT and other disciplines,reflecting the market demands which students willencounter in industry.

Case Study: Barcud DerwenBarcud Derwen is an independent company providingfacilities and post-production services for TV and filmproduction firms. It is the largest company in this fieldoutside London. It originated in a merger of two similarcompanies - Barcud in Caernarfon, which served theindependent production sector in that area, andDerwen in Cardiff. It has continued to expand anddiversify and now comprises a number of distinctactivities including:

• acting as the host broadcaster for the Assembly;

• giant screen hire for stadium and outdoor events;

• cinema special effects (via acquisition of a Londoncompany);

• investment in joint productions;

• computer graphics and multimedia businesses (forexample, building the website for the NewMillennium Centre in Cardiff and S4C linkedwebsites and CD-ROMs);

This diversification has offset declining profits from thetraditional business, caused by the declining numbersof independent producers in Wales, and theirincreasing average size. This factor, with cost andtechnology improvements, enables them to establishmore production facilities in-house.

The company therefore points a way forward for thesector in Wales, being well advanced with an effectivetransition or extension from traditional to new mediaactivities. However it is open to question how manyother firms in the independent sector possess thevision, the will, or the expertise to make similarprogress.

Traditionally the BBC trained production personnel forthe industry, but this stock of trained workers is nowdeclining and will need replacement from elsewhere.

Cyfle is seen as providing an excellent entrance pointinto the industry, although the English-based (MediaSkills Wales) provision is still relatively new. A BarcudDerwen employee was an early student on the NewMedia course which Cyfle/Media Skills Wales haveintroduced. Provision for the existing workforce ismore problematic, mainly because of demandlimitations caused by shortages of time and money inthe independent sector. Even when financial support isprovided (for example via the Sion Pyrs Fund, a trustfund to train management), applications have beendisappointing. This partly reflects the traditionally closerelations between purchaser (S4C) and suppliers,leading to a lack of emphasis on management andcommercial skills.

‘Cyfle/Media Skills Wales can be developed to meetlarger scale needs and New Media trainingrequirements. There should be no difficulties withprovision as long as the funding is available and thedemand is there.’


15

Case Study: Ffilmiau’r NantFfilmiau’r Nant, based in Caernarfon and MenaiBridge, is one of the largest independent producers inNorth Wales, with a strong track record in drama,documentary, children’s soaps, and sport. Thecompany employs up to 200 at a given time,depending on the productions in progress. Most ofthese are freelances on contracts of varying lengths.

Although the founders were trained in the majorbroadcasting companies, particularly HTV and theBBC, a new generation of producers and directors,trained within the independent sector, is nowbecoming important. Cyfle provision has been‘invaluable’ in supporting this process.

Pressure on time and budgets means that it is moredifficult to develop professionals via intermediategrades such as second assistant director. There is alsoan unrealistic expectation among some youngerworkers that they can move quickly toproducer/director level.

The main orientation is towards creative skills, butthere are difficulties in finding skilled actors, editorsand scriptwriters/storyliners for drama. Ffilmiau’r Nantis working with Trinity College Carmarthen and a smallindependent drama school, to try to establish anacting training course.

The company is aware of the need to add amultimedia dimension to its productions, but will buyin the necessary technical expertise for this in line withnormal practice. For example, they will be seeking asupplier to build a programme-linked website; thereare now companies offering these services locally.Investment is seen as potentially risky due to thevolatile nature of the technologies and skills involved.

The principals feel that they have become ‘morestreetwise’ as regards rights, exploitation andmarketing issues. However the difficulty of breakinginto English-speaking markets must not beunderestimated. For example, it is probably necessaryto form alliances with English producers in order toestablish a foothold.

Support for producers wanting to identify and accesssources of funding would be welcome - along the linesof Irish European Media Enterprise Funds. Forexample this might provide expertise in the nature ofthe various forms of support, the formation ofproposals, and bidding.

Case Study: ImaginetImaginet is a significant member of a group of newsuppliers of digital media productions, many of whichare based in the Cardiff area. The company works witha range of interactive digital technologies, includingwebsites interactive TV, CD-ROMs and kiosk systems.

This activity requires a wide range of skills. Imaginetemploys graphics and design specialists, creativeprogrammers, graphic and computer animators andpeople with more traditional media skills. There arealso core ICT workers such as database developersand systems integrators, advertising and marketingspecialists, and account managers. The company aimsto progress by being proactive, innovative andentrepreneurial.

Imaginet sees clear scope for growth - ‘there arecompanies like us in London but with five times thenumber of staff, and some in the USA with up to 9,000employees... we need more people’.

For Imaginet, a clear vision of the way forward isneeded which exploits the enormous potential of newtechnologies. This must be shared by suppliers, keypublic sector organisations such as the WDA and theUniversities, and key public and private sectorpurchasers and users. Key Welsh companies need tobecome fully ‘e-commerce enabled’ and to integrateglobal interactive communications with their owninternal systems - ‘Wales hasn’t started yet - nobody’sdone all of that’.

To facilitate this, new people with new skills in keyareas are needed:

• commercial/technical awareness amongst keycorporate managers;

• graduates with expertise in interactive TV andmobile media systems;

• ICT expertise in large server based systems;

• skills in newer technologies such as voice activatedsystems.

An example of the urgent need for marketdevelopment is interactive TV, a key market for whichthere is currently no client in Wales. There is a need fora strategic lead in these areas.

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4. Action on Skills4.1 As far as the TV and film production sector is

concerned, Wales is lucky to have, in Cyfle andMedia Skills Wales, well established NVQ provision.The numbers involved remain fairly small; it seemslikely that provision in this area will need to beexpanded at some point to meet the need forreplacements as the workforce ages. In particular,there appears to be a need to strengthen workforceskills at Level 3, perhaps in closer conjunction withexisting degree level provision.

4.2 Cyfle and Media Skills Wales have a clear view thatthey also need to develop similar provision for theNew Media sector. This could potentially serve toease the diversification of the existing independentproduction sub-sector, as well as serving the newerpopulation of digital technology based suppliers.

4.3 Such provision, if effective and widely accessed,could have an important effect on the ability of theWelsh sector to meet emerging challenges. It couldaid the repopulation of the production sector,especially if elements of traditional and newtechnology could be combined by mixing NVQmodules. This might require strategic co-operationbetween NTOs in the media and new media sectorand in the IT sector (Skillset and ITNTO).

4.4 In the shorter term, Cyfle and Media Skills Waleshave established a New Media NVQ and hope todevelop this as a key driver of skills development inthe New Media part of the sector. There are fundingissues associated with this, as these organisationsare funded mainly by the broadcasters and otherbodies from within the more traditional areas of thesector. These issues need to be resolved so thatprogress can be speeded in this area.

4.5 The key need is for agreement at a strategic levelfor an approach to sectoral development and theassociated skills issues, which can embrace bothparts of the sector, overcoming historicaldifferences to recognise and exploit theopportunities offered by convergence. TheAssembly has an opportunity to facilitate such adevelopment, but will need to consult and frame itsdeliberations on an appropriately wide basis.

4.6 There is currently a relative lack of involvement bycompanies in the New Media part of the sector,especially if they have no film or TV productionelement within their offer. In these cases they maynot have links via TAC, Cyfle, Media Skills Wales orSgrin to existing structures. The New Media GroupWales, the national association in Wales for newmedia firms and individuals, is administered bySgrin and sponsored by the WDA and others. Itprovides a focus for the exchange of informationand support for marketing and developmentactivities. As such it will have an important part toplay in future work to address skills anddevelopment needs for the New Media sub-sector.

4.7 There is a need to build on these existing structuresto build a widely based employer forum, to includeemployers in new and emerging areas of digitalcontent development and production, such asinteractive games and learning systems, websites,and e-publishing.

4.8 On the wider UK front, work is being done to mapqualifications for the media and cultural industries,and this is intended to inform development of aqualifications framework which can meet the needsof this sector, while providing the necessary links toother frameworks, especially for IT. This work isbeing taken forward by QCA, with ACCACinvolvement, and using input from a speciallyconstructed sector advisory group comprisingrepresentatives of the various NTOs concerned. Theresults of the qualifications mapping phase shouldbe available in late Autumn 2000.

4.9 Complementing this should be the work of theAudio Visual Industry Training Group, (AVITG),meeting under the auspices of the Department forCulture, Media and Sport (DCMS) and Skillset. Thisis looking at how skills needs can be identified andprovided for, across the UK. It is due to report inNovember 2000. Input from Wales is provided byHuw Jones, Chief Executive of S4C.

4.10 The sector itself is developing, in the shape of theDigital College, a ready made means of developingand delivering vocational information and trainingvia new technologies. This should be exploited toaddress the skills needs of this, as of other sectors.

4.11 In Wales the new opportunities to establish NewMedia enterprises in formerly impracticable ruralareas, offer the prospect of complementing relatedstrategies for the establishment of a ‘Green Wales’brand covering new technology industries, organicfood products, and related attractions likealternative technology and ecology themed centres.

4.12 As regards management skills development needs,the focus is on the development of outward lookingmarketing and exploitation work, to the rest of theUK and overseas. Some important work has alreadybeen done in North Wales to assist opportunitysourcing and cluster development (TAC, 1998, andWDA 2000). Similar work covering the whole ofWales, and tapping a wider range of fundingsources, would be a logical development from this.

4.13 Amongst other action, for example, this workrecommends:

• enhanced provision via an Applied MultimediaSkills initiative and a Scholarship Programme;

• a Workforce Multimedia Literacy and Multi-skillinginitiative;

• A Multimedia ‘Hot-House’, mini-incubators, andgraduate placement schemes.

4.14 Table 4.1 summarises the above points andpresents some more detailed recommendations.


17

Recommendations for future research4.15 Cyfle and Media Skills Wales have a record of

producing focused and relevant research on thesector, although there have been difficulties arisingfrom the small size of many target companies andtheir corresponding reluctance to respond tosurveys.

4.16 More recently, the Sgrin Research 2000 Project(Phase 1), conducted by Strategic Marketing,reviewed research on the UK and Welsh sectorsand produced a database of publications (Sgrin,1999). This will be an important resource for furtherwork within this project, and succeeding workthereafter. There was an intention to conduct asecond phase of this research, but the precisenature of this had not been defined. Meanwhile, thelatest Cyfle/Media Skills Wales research hasbecome available.

4.17 Other useful work has been done in North Wales,based in part on research with the sector there (TAC1998 and WDA 2000).

4.18 There is now an opportunity to review theinformation available and to identify informationgaps and potential methods for addressing these. Itmay be appropriate to consider a jointSgrin/Cyfle/Media Skills Wales approach to this, inline with the wider and more strategic generalapproach outlined earlier.

4.19 Areas which suggest themselves as themes forfurther research include:

• all-Wales research to identify employers in theNew Media sector, building on the sampleconstruction work undertaken for the Cyfle/MediaSkills Wales Survey 2000.

• work to build on the directory of relevant researchrecently developed for Sgrin; for example thismight be extended to cover material on the NewMedia sector and linked work on relevant IT andcultural/creative sector issues;

• the availability, location and quality of trainingprovision covering the latest digital technologiesand packages;

• first and further destinations of FE and HEstudents leaving media and new media coursesin Wales.

4.20 Finally, given the difficulties experienced in reachingmany small companies in the sector by moreconventional survey methods, an event-basedmethodology should be considered for future work.This could take the form of a conference dealingwith wide sector development issues, for examplethe proposals made above to convene a wideremployer forum with a focused sub-group formarketing. Discussion groups or workshops canthen be run off this wider event. These could alsobe used, for example, to construct an employerpanel for use in further research.

Table 4.1: RecommendationsNo. Recommendation When Key Players

1 Disseminate results of qualifications mapping and AVITG work, and Late 2000 ACCAC/NTOsany proposed changes

2 Reinforce messages to independent sector to stimulate demand for ongoing Cyfle/MSW/TAC/S4C/ management and new media training Assembly/CETW

3 Facilitate formation of a Digital Media Wales Forum for companies Start 2000 Employers/WDA/in traditional and new media, to transcend existing boundaries and Assembly/NTOs/Newrepresent the digital content sector on policy and training issues. Media Group Wales/CETWAdapt and adopt existing North Wales cluster development proposals Partners in ‘North Walesfor all Wales. Multimedia Action Plan’

4 Use Digital College to offer and promote supply-chain development From late S4C/Cyfle/MSW/WDA/courses for the sector 2000 Key employers

5 Within the Forum, constitute a global marketing and exploitation From 2001 Employers/WDA/CETW/sub-group to co-ordinate and support the sale of Welsh product, Sgrîn/Cyfle/TAC and building on existing North Wales plans North Wales partners

6 Celebrate and disseminate excellence in HE, FE and Cyfle/ HE/FE/Cyfle/MSW/CETWMedia Skills Wales provision for the sector in Wales

7 Offer the Cyfle/MSW New Media NVQ more widely, and agree the For 2001 Cyfle/MSW and Board, funding arrangements needed to allow this courses with WDA and Assembly/

CETW

8 Identify and co-ordinate sources of investment for new content and ongoing Broadcasters/New Mediaproduction ventures Group Wales/

key employers/WDA

9 Emphasise distinction between ‘general’ academic Media Studies ongoing Careers/schools/FE/HEprovision and vocational provision, and encourage young people – ES/New Deal/CETWespecially females - to consider vocational routes

10 Review and encourage potential for New Media development within 2000 Assembly/WDA/Obj 1rural and Objective 1 areas bidders

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Annex A: ReferencesBSL, 2000Employment Forecasts by Sector produced for theFuture Skills Wales Research Forum by Business Strategies Limited, August 2000.

Cardiff Business School, 1998‘The Economic Impact of the Arts and CulturalIndustries in Wales’,Bryan et al, Welsh Economic Research Unit.

Cyfle, 2000‘Training Needs for the Welsh Media Industry 2000’,Elwyn Vaughan Thomas and Richard J. Staniforth forCyfle/Media Skills Wales.

Cyfle, 1998‘Training Needs Analysis of the Film and TelevisionIndustry in Wales 1998’, Cyfle/Broadcast Training Wales.

Future Skills Wales, 1998‘The Media and Multimedia Industry in Wales’ (Internal project report).

Sgrin/Strategic Marketing, 1999‘Sgrin Research 2000 Project (Phase 1); End of Project Report’.

TAC Websitewww.taccyf.demon.co.uk

TAC, 1998‘Sourcing Opportunities for the Welsh Media Industry’,David Graham and Associates, Taunton, for TeledwyrAnnibynol Cymru.

University of Wales Institute Cardiff, 1999:‘A Training Needs Analysis for the Multimedia Sectorin Industrial South Wales’.

WDA, 2000‘North Wales Multimedia Action Plan’, DTZ Pieda for WDA, North Wales Media Group, NorthWales Economic Forum, Cyngor Gwynedd Council.

Welsh Funding Councils 1998‘Further and Higher Education Statistics in Wales:1997/98’; available from www.wfc.ac.uk.

Other Key SourcesCardiff Business School, ‘Transmitting the Benefits; the Economic Impact ofBBC Wales’, Bryan et al, Welsh Economy Research Unit (undated,1997 or later).

‘Made in Wales’ 2000Handbook of Media and New Media organisations,Sgrin/MEDIA Antenna Cymru Wales, 2000.

Digital Media Alliance, 1998‘Recommendations for Growth: UK Digital Media’.Wales Media Forum, 1999: ‘Cymru.com: Here’s How’, IanCourtney and Simon Gibson.

Euryn Ogwen Williams, 2000‘How do you solve a problem like the media?’; published in Agenda magazine.

Skillset, 1997‘An Occupational Map of the Broadcast, Film andVideo Industry

Skillset, 1999‘People Skills Scoreboard; Final Report’.

Skillset/Pact, 1997‘Production Training: A Report for Skillset and PACT’,Sabita Kumari-Dass.


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Annex B: Welsh Sectors in ContextA Brief Overview of the Relative Size andImportance of Welsh SectorsThis paper presents an overview of the sectors selectedfor study within the Future Skills Wales Sectoral Skillsproject. It aims to give the relative scale of the sectorsinvolved and some idea of their relative importance inWales.

The data on employment used in this section is takenfrom the latest estimates from Business StrategiesLimited (August 2000). Data on business units are takenfrom NOMIS. Some of the values given (for example forthe number of businesses within Wales, or the size of theworkforce, for a given sector) will not agree withestimates or calculations from other sources. This is dueto differences in the detailed definitions of sectors, or inmethods of estimation. However by using one source inthis discussion, consistency in measurement orestimation is established, and better comparability isensured. This is appropriate since here we are concernedwith the relative sizes of sectors and their workforces, asmuch as with absolute numbers.

Sector Size: Workforce NumbersFigure B.1 shows the employment figures for each of thesectors (employees and self employed) as a percentageof the total for Wales. By this measure Tourism, Leisureand Hospitality is the largest of the selected sectors,followed by Business and Financial Services, Social Care,and Agriculture and Farm Enterprises.

Together, the nine sectors selected for study in thisproject provide work (either as employees or in selfemployment) for around 26% of people working in Wales.This indicates the scope and potential importance of theexercise for the understanding of skills issues in Walesand the formulation of policy responses. (The rest ofemployment in Wales is accounted for by a large publicsector, including government, education and publicsector healthcare, and by the primary, construction,transport and distribution sectors, including retail).

Figure B.1: Employment as a percentage ofWelsh Employment: by Sector

Source: BSL FSW Sector Forecast

Employment Location QuotientsFigure B.2 provides a different view of the sectors, interms of their importance within Wales relative to the UKas a whole. It does this by comparing the employmentlocation quotients for the sectors. Employment locationquotients are used to express the degree to whichemployment in a given sector is located in a selectedregion. To calculate a location quotient, an averagepercentage is first calculated for all employment in theregion. Using the BSL estimates, for example, one findsthat 4.3% of all employment in the UK is located inWales.

Figure B.2: Employment Location Quotients forWales: by Sector

Source: BSL FSW Sector Forecast

Therefore, if employment in a given sector is distributedevenly over all regions of the UK, one would expect 4.3%of its employment to be in Wales. The sector’s Welshemployment percentage, at 4.3%, will be equivalent tothe average employment percentage for Wales.

To calculate the employment location quotient, thesector’s percentage is expressed as a ratio of the Welshaverage percentage. For example if a sector has 5.2% ofUK employment, the employment location quotient willbe the ratio of 5.2 to 4.3, or 1.2. Quotients of more than 1therefore indicate over-representation of employment inthe Welsh sector relative to the UK as a whole. Quotientsof around 1 indicate that employment in the sector inWales is much as one would expect given the overalldistribution of employment across the UK; and quotientsbelow 1 indicates that the sector in Wales is relativelyunder-represented in terms of employment.

Figure B.2 shows that the strongest Welsh sectors, inthese terms, are Agriculture, plus three of themanufacturing subsectors - Automotive, Aerospace andElectronics Manufacturing. UK employment is relativelyconcentrated in Wales for these sectors, despite the factthat some of them are small in relation to Welshemployment as a whole (Figure B.1). The Social Caresector also shows employment strength, while FoodProcessing and Tourism, Leisure and Hospitality areapproximately in line with the Welsh share of UKemployment.

Media and New Media, and the Business and FinancialServices sector, are both under-represented in Wales inemployment terms, with employment location quotientswell below 1.

0.0 2.0 4.0 6.0 8.0

Aerospace

Automotive

Electronics

Food Processing

Agriculture

Tourism

Social Care

Media

Bus. & Fin. Services

0 0.5 1 1.5 2 2.5

Aerospace

Automotive

Electronics

Food Processing

Agriculture

Tourism

Social Care

Media

Bus. & Fin. Services

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Sector Size: Number of BusinessesAn alternative method of comparing sectors is by thenumber of business units in each sector. This can be lessstraightforward than the employment location quotientmethod used above. Here we are using data on businessunits in Wales and for Great Britain as a whole, providedin NOMIS. The main difficulty is the definition of abusiness unit within the published figures. This does notmake a distinction between separate businesses, andlocations representing branches or sites within onebusiness. It also omits small ‘one-person’ business siteswithout formal employees.

This means, in particular, that these figures are apt to bemisleading as applied to the agricultural sector, sincethey represent agricultural businesses with employees,rather than all farms. They therefore greatly under-represent the number of agricultural enterprises in Wales.Although the business unit figures for agriculture havebeen included in the following analysis, they are thereforenot a reliable guide to agricultural sites in Wales.

Figure B.3 shows the sectors studied in terms of thenumber of business units in Wales. It shows that, by thismeasure, the Tourism, Leisure and Hospitality sector is bysome way the largest. According to the NOMIS figures,this sector contains 12.4% of all Welsh business units, -around 1 in every 8.

A further 6.6% of Welsh business units are in theBusiness and Finance sector, and 3.2% in Social Care.The next largest sector, Media and New Media, includesa large number of businesses classified under ‘Othercomputer related services’. Many of these may be ‘NewMedia’ businesses within our study definition. Others,however, may be providing services which are notrelevant within this definition. As explained above, thefigures for agriculture do not represent the farming sectoraccurately.

In total the sectors covered by the study account for over25% of business units located in Wales.

Figure B.3: Number of Business Units - SelectedSectors

Source: NOMIS

Site Location Quotients of Welsh SectorsFigure B.4 shows the site location quotients calculatedfor the sectors covered by this study. These arecalculated as for the employment location quotients usedearlier, but using business unit figures instead ofemployment numbers. Four of the sectors have quotientsgreater than 1. In other words, these sectors are ‘over-represented’ in Wales relative to what one might expecttaking Great Britain as a whole. These quotientsrepresent a degree of concentration of business units inthese sectors within Wales. These sectors are Aerospace,

Tourism, Hospitality and Leisure, Social Care, and FoodProcessing.

The Automotive Manufacturing sector in Wales, with alocation quotient of 0.96, is close to the size one mightexpect (in terms of numbers of business units). In otherwords, Wales has ‘a fair share’ of business units in thissector, according to these NOMIS figures. At the otherend of the scale, the Business and Finance sector, with asite location quotient of only 0.6, is under-representedwithin Wales - confirming the findings of the first FutureSkills Wales study in 1998.

Again, the quotient for ‘Agricultural Businesses’ reflectsthe limitations of the method, although it may indicatethat Welsh farms and agricultural businesses tend to besmaller than the average for Great Britain, inasmuch asfewer of them are large enough to be included asbusiness units.

Figure B.4: Site Location Quotients

Source: NOMIS

Selection of Sectors for the StudyThe above discussion sheds light on the reasons forselecting this set of nine sectors. The reasons vary, butcan be simply expressed as follows (some sectors areselected for more than one reason):

• sectors with significant proportions of Welshbusinesses and/or workforce (Tourism, Business andFinance, Social Care);

• sectors which are important components ofmanufacturing industry within Wales (Aerospace,Electronics, Automotive, Food Processing);

• sectors which are relatively strong in Wales(Aerospace, Tourism, Social Care, Food Processing);

• sectors which are relatively weak in Wales, but areimportant for future growth (Business and Finance,Media/New Media);

• sectors with particular significance for Welsh cultureand communities (Agriculture, Media/New Media).

The Manufacturing SectorManufacturing has been more important in the Welsheconomy than for the UK as a whole. In 1998employment in manufacturing (including but not limited tothe sectors studied in this project) accounted for 19.7%of Welsh employment. This contrasted with 16.6% for theUK - a difference of 3.4 percentage points. Projectionsfor 2004 show manufacturing employment as a lowerpercentage of employment in both cases - 17.3% inWales, against 14% for the UK. Although the percentagesare smaller, the difference between Wales and the UK, at

0 2000 4000 6000 8000 10000 12000 14000

Agricultural Businesses

Business/finance

Media/New Media

Social Care

Tourism

Aerospace

Automotive

Electronics

Food Processing

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6

Business/finance

Agricultural Businesses

Electronics

Media

Automotive

Food Processing

Social Care

Tourism

Aerospace


21

3.3 percentage points, remains almost unaffected. (DfEE,Skillsbase/IER, June 2000).

Although these projections show a fairly significantdecline in the size of the manufacturing sector as apercentage of overall Welsh employment, the absolutenumbers involved change less significantly. This is due toa projected rise in the total numbers employed in Walesover the period 1998-2004. Thus, the figure of 227,000for those employed in manufacturing in 1998, becomes205,000 in 2004 - a decline of 22,000, or just under tenpercent.

When considering the future demand for skills it isimportant to keep in mind that, as illustrated above,relative decline in the manufacturing sector does notimply lack of future demand for manufacturing skills. Thiswas one of the insights behind the original Future SkillsWales project methodology.

This point is further illustrated by the replacementdemand projections for occupations associated withmanufacturing. Figure B.5 shows the replacementdemand projection for skilled metal and electrical trades(SOC 52) for the period 1998-2004, across the UK. In thisperiod, 145,600 jobs in these trades are expected todisappear - part of the overall decline in employment inmanufacturing noted above. However, losses from thesetrades are projected consisting of 248,000 fromretirement, and 56,600 from occupational mobility(movement into other jobs), a total of 304,600 workers tobe replaced. This more than offsets the effects ofdeclining employment, leaving a net requirement figure of169,500. This represents the requirement for new, trainedentrants to these trades in these six years. These may benew entrants to the workforce, or existing workers whohave upgraded or added to their skills and qualifications.

Based on the assumption that Wales would require about4.5% of this number (this being the approximate size ofthe Welsh workforce relative to that of the UK), thisimplies a net requirement for some 7,600 skilled metaland electrical tradespeople over this period for Wales.

Figure B.5: Replacement Demand: Skilled Metaland Electrical Trades, 1998-2004 (UK)

Source: DfEE Skillsbase/IER

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AcknowledgementsSion Hughes – Chief Executive, Cyfle/Media Skills WalesSkillsetBerwyn Rowlands – SgrînLinda Harpwood – Sgrîn/New Media Group WalesBryn Roberts – Barcud DerwenHuw Jones – S4CEuryn Ogwen Williams – S4CRobin Evans and Susan Waters – Ffilmiau’r NantDafydd Hughes – TACGreg Cannon – ImaginetClaire Dowds – BBC WalesStrategic Marketing LtdPatrick Sullivan – Welsh Development AgencyMax Munday – Welsh Economic Research Unit, Cardiff Business SchoolBusiness Strategies LimitedThe statistics section – the Welsh Funding Councils Michael Phelps and Gareth Evans – Economic Advice Division, Office of theNational Assembly for WalesJoanne McCallum and Deserie Mansfield – South East Wales Training and Enterprise Council

The views presented in this report are those of York Consulting Limited.Stephen Burniston, August 2000.

Notes

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