Factores de riesgo

Based on the industry analysis of the studied countries, as outlined in the above subsections, the current research identified a different Condition Cycle for each stage of the animation industry life cycle. Each Condition Cycle describes the general characteristics of the animation industry in a particular stage. The term Condition arises from Porter's theories regarding industry lifecycles (see section 2.1.2.1), in which each industry stage is defined as having particular conditions. This thesis described the condition as a Cycle due to the fact that the particular conditions or characteristics have a direct impact on one another in a circular manner. Therefore, this research has chosen the term Condition Cycle to describe a system characterised by mutually reinforcing conditions.

In the Introduction stage, the analysis of the animation industry in Saudi Arabia (see section 4.5.1) reveals three main barriers that prevent the animation industry from moving into the Growth stage. The first barrier is an absence of skills providers where only a few institutions offer training and education courses that provide skills related to the animation industry. The second barrier that challenges the animation industry in the Introduction stage is financial. This is due to the high costs required to establish

firms within the animation industry, such as buying sufficient advanced computer hardware and rendering engines to run the latest professional software with updated licences, and the costs of hiring qualified professionals. These expenses naturally lead to high levels of business risk. The third barrier is that during the Introduction stage, there is an absence of distribution channels due to the weakness of the infrastructure.

Further details on these barriers and the strategies that can be used to overcome each of them during the Introduction Stage will be presented later, in section 6.1.2.

These barriers shape the Introduction Condition Cycle, which is illustrated in Figure 29. This Condition Cycle has five characteristics: lack of trained workforce; poor quality animation productions; low demand; restricted capability; and few firms within the market. Framing this as an Introduction Condition Cycle, the absence of skills providers results in the lack of workforce and the poor quality, while the financial risk that results from firms’ limited capabilities prevent the establishment of new firms in the market. The absence of distribution channels plays a role alongside poor quality in causing low demand for animation during the Introduction stage.

These elements have direct correlations with one another, forming a continuous cycle.

Therefore, changing some elements directly affects the other elements, also (see section 6.1.2 for more details on the strategies indicated in the Theoretical Model for use in the Introduction stage). In Figure Figure 29 below, the relationships between these barriers and the conditions of this stage are highlighted with arrows.

Figure 29: Introduction stage Barriers and Condition Cycle

In terms of the Growth stage, the Condition Cycle, as illustrated in Figure 30, is once more shaped by the industry barriers that arise in this stage. According to the findings from the Emirates and Egyptian industry (see section 4.5.2 and 4.5.3), the industry barriers that constrain movement from the Growth stage to the Maturity stage are similar to those that limit industries in the Introduction stage. However, the degree of these barriers and the scale of their impact changes, affecting the nature of the constraints. One of these barriers is the relative shortage of skills providers, in terms of both quantity and quality. A quantity shortage is generally due to a limited number of institutions offering full-time courses leading to animation degrees, while a quality shortage often arises due to the relative lack of experience within skills providers,

which provides the industry with a workforce that is less competent than that found in a Mature industry. In addition, the moderate levels of local demand found in a Growth stage industry do not encourage practitioners to develop their skills to the same extent that practitioners in a Mature industry must, due to the higher expectations of international demand. A further barrier is a shortage of distribution channels due to infrastructure weaknesses, but the final industry barrier is a general shortage of financial resources, leading animation entrepreneurs to have limited capability and preventing them from improving their product quality to compete with animation studios in Mature industries. These barriers shape the Growth Stage Condition Cycle, which includes the five following elements: a workforce with moderate competence, good quality production, moderate demand, limited capability, and moderate number of firms entering the industry. The relationships between particular barriers and conditions are shown in Figure 30 by arrows. In a similar manner to the Introduction stage, in the Growth stage, the Conditions have direct correlations to each other, and therefore remain part of a continuous cycle. Thus, once again, any change in a given element will affect the other elements directly (see section 6.1.3 for more details on the strategies indicated in the theoretical model to assist the Growth stage industry in developing to a Mature stage).

Figure 30: Growth stage Barriers and Condition Cycle

Regarding the Mature stage, the findings from the UK animation industry (see section 4.5.4) show that there are particular characteristics of the Mature industry that shape its Condition Cycle, as illustrated in Figure 31. This Condition Cycle has five elements: excellent quality; high international demand; large capability; many firms competing in the industry; and a workforce with high levels of competence. However, although the UK animation industry has reached a Mature stage, barriers to healthy progression exist that could lead the animation industry to move to the Decline stage.

The main barrier is that the UK faces competition from cheaper competitors such as Asian countries, France and Canada. France and Canada have used tax regulation to reduce costs, while in Asian countries, general workforce costs are lower. These cheaper competitors have attracted a lot of business, as international buyers prefer to buy from them for cost reasons. In addition, some local producers from the UK have

started to commission and outsource animation production process to these countries.

In Figure 31 below, the Condition Cycle can be seen to have reached its peak; it is now only constrained by reduced demand due to the competitors. However, these cheaper competitors create a threat to the entire Condition Cycle, particularly if they are of high competence.

Figure 31: Mature stage Barrier and Condition Cycle

4.6 Summary

This chapter provided a holistic picture of the animation industry within Saudi Arabia and the multiple case study countries. An overview of the analysis for their level of animation industry was given, and it also traced the historical development of the animation industry within those countries. This analysis assists in the development of

an understanding of how the industries in the various countries studied have developed. A discussion of the findings arising from the analysis of the animation was also presented. This discussion identified the characteristic features for each country’s industry stage, as well as discussing the barriers that act as obstacles to the development of the animation industry for each country. The identification of these characteristic features and barriers helps to provide a foundation for the development of the Theoretical Model by aiding an understanding of the conditions inherent in each stage of the animation industry life cycle. This understanding will be used as a guide for the researcher in terms of determining which strategies to apply in each stage. The strategies themselves will be extracted from the analysis of the research framework carried out in the next chapter.