Business & Government Oct 15, 2012

Businessweek Explains Iceland’s Next Steps in Recovery

Iceland has turned to Hollywood to help continue its successful economic recovery. Over the past year, the island has become a popular filming location for several Hollywood films, including Ridley Scott’s “Prometheus” and Darren Aronofsky’s “Noah.” The Icelandic government is supporting these films, among others, by reimbursing 20 percent of all film and television product costs in the country. Agust Einarsson, an economics professor at Iceland’s Bifrost University, estimates that the government gets back 5 kronur in tax revenue for every 1 krona it shells out.  

As estimated by Professor Einarsson, about 25 percent of the Icelandic working population is involved in the creative arts. With a total population of 320,000, this means that about 4% of Iceland works within the many creative industries. “I wouldn’t be surprised if creative industries will become the largest contributor to Iceland’s gross domestic product within the next 15 to 20 years,” Einarsson said by phone. “Within that time, we could see that creative industries could account for as much as 30 percent of national output.”