Behind the scenes: How transnational firms are constructing a new international division of labor in media work

Predictions that work in fields such as computer programming, architecture, and graphic design will be globally sourced have raised the specter of job losses among skilled workers in high wage economies. One of the most interesting cases tied to this controversy is that of so-called "runaway" motion picture and television production from the traditional center of entertainment media production in Los Angeles to non-US satellite production centers. Although runaway production is an old complaint in the entertainment media industries, the production location decisions of media entertainment firms since the mid-1990s look considerably different than those in the 1980s when a similar alarm was raised. Among the critical differences are: (1) the location of an expanded range of production activities in regions outside the "headquarters" location of Los Angeles; (2) the ability of transnational firms to access multiple, self-organized and networked pools of skilled labor in production locations outside Los Angeles; and (3) the expanded role of the sub-national state in reducing the overall production costs of transnational firms, including those attendant to their use of skilled labor pools. The current controversy provides an opportunity to consider how transnational firms use international out-sourcing to address their need for high-skilled and specialized labor in the production process. It also contributes to the on-going theoretical debate over how transnational firms are combining the advantages to be derived from territorial agglomeration with those of substitutability of labor skills in multiple locations. (c) 2006 Elsevier Ltd. All rights reserved.