Animation Around the World: How Incentives Drive a Growing Industry

The animation industry has experienced significant growth in recent years, fueled by a rise in worldwide production incentives. Governments around the globe have seen the potential economic benefits that the industry can bring and have implemented attractive production incentives to bolster economic growth.

These production incentives have supported local content creation and have functioned as a catalyst for the development of infrastructure. Studios are expanding swiftly, oftentimes working across continents, and creating a global and expanding network of talent in the visual storytelling process.

In 2021, the animation industry saw a 5% boost in its global market size, reaching a staggering $372 billion. Since then, the global animation industry has continued a strong growth trajectory. The latest market reports estimate that the industry surpassed $420 billion in 2024, continuing its steady upward trend. Projections now estimate the market will exceed $600 billion by 2030, driven by demand for animated content across film, streaming platforms, and gaming.

International players in animation

United States

Over the past century, the animation industry in the US has experienced evolutionary shifts; from the earliest stop-motion animation to the rise of hand-drawn animation. As traditional animation (think your cherished Saturday-morning cartoons) declined, a new era emerged—the era of computer animation— usually enhanced with the use of computer-generated imagery or CGI.

The animation sector continues to thrive in the US, with streaming platforms like Netflix, Apple TV+, and Amazon Prime investing heavily in original animated content. This has led to increased demand for both traditional and digital animation talent across the US.

The first animated feature film made entirely with CGI was Disney-Pixar’s groundbreaking film, Toy Story (1995). The film’s massive success compelled studios to produce their own CGI filmmaking. Unsurprisingly, between 2004 and 2013, computer-animated films consistently achieved the highest gross margins, reaching around 52% of all film revenue. 

This time period witnessed a number of award-winning animated feature films, originating from industry giants like Walt Disney Imagination, Pixar, DreamWorks, Sony Pictures Animation and Universal’s Studio – Illumination Entertainment. These studios, and other prominent industry players, have made significant contributions to the world of animation that continues to shape the industry today.

Many jurisdictions across the US have benefited from the growth of the animation industry, particularly the states that have offered new or enhanced production incentives to attract animation studios.

Oregon offers two notable programs aimed at supporting the animation industry: the Oregon Production Investment Fund (OPIF) and the Greenlight Oregon Labor Rebate program (GOLR), which combined offers up to a 26.2% tax rebate on qualifying projects.  In addition, there is no sales tax in Oregon and there are additional incentives for local and regional production work. Savings for basing your project in Oregon could easily exceed 30%.

Oregon remains an internationally recognized major hub for stop-motion production houses. For his 2022 film ‘Pinocchio,’ Academy Award-winning director Guillermo Del Toro partnered with Netflix and Portland-based animation studio, Shadow Machine. Fellow Oregon-based LAIKA Studios, known for its stop-motion films ‘ParaNorman,’ ‘The Boxtrolls,’ and ‘Kubo and the Two Strings, ’ is currently developing ‘Wildwood,’ an ambitious stop-motion feature based on the bestselling novel by Colin Meloy, slated for release in late 2025. The studio continues to push the boundaries of the craft while benefiting from Oregon’s production incentives.

California’s Film & TV Tax Credit 4.0, which launches on July 1st, 2025, continues to include incentives for stop-motion animated projects. However, the state’s incentive program faces increasing pressure from states like Georgia, New Mexico, and Texas.

On the East Coast, Connecticut offers an equally competitive package to digital animation production, providing a tax credit of 10% to 30% based on qualified spending within the state. The Digital Animation Production Company Tax Credit is available to companies that maintain studio facilities located within the state and employ 200 full-time employees within the state.

Blue Sky Studios, known for its hit animated films ‘Ice Age,’ ‘Rio,’ ‘Horton Hears a Who!’ and ‘The Peanuts Movie,’ was based in Connecticut, operating from 1987 until its closure in 2021. Blue Sky’s latest animation project, Academy-award nominated ‘Nimona,’ was adopted and completed by Annapurna Pictures after they launched their own animation division with former Blue Sky executives Robert Baird and Andrew Millstein. The film was released on Netflix in June 2023.

Canada

Canada’s animation industry is currently valued at over $1 billion and projected to grow by 10% in 2025. In British Columbia (BC) specifically, a range of attractive incentives are available for the animation industry. Eligible domestic productions can benefit from a refundable tax credit on labor with a 39.5% effective rate, while digital animation or visual effects (DAVE) activities, including post-production, receive a 16% credit on BC labor expenditure. BC also offers Regional and Distant Location incentive uplifts on labor.

In 2023 the province contributed a historical contribution of $42 million to bolster the creative sector. A portion of this investment, amounting to $15.9 million over three years, is dedicated to supporting BC domestic productions, and nearly $1 million is allocated for workforce development and the recruitment of under-represented groups.

Vancouver remains one of the world’s top VFX and animation hubs. The province’s continuous support and investment into the creative sector has proved beneficial to various animation studios, such as Industrial Light & Magic (ILM), and Walt Disney Animation Studios, which established a new production facility in Vancouver in 2020. Dedicated to producing long-form series and special projects exclusively for Disney Plus, the studio plans to expand its films into series, with projects like ‘Moana,’ Baymax’ and ‘Zootopia’ in the pipeline.

Animal Logic, which was acquired by Netflix in 2022, been responsible for the visual effects and animation in well-known feature films like ‘Happy Feet,’ ‘The Lego Movie’ and ‘The DC League of Super Pets.'

Ontario and Quebec also offer animation and visual effects credit on labor (18% and 16% respectively) on top of Ontario’s 21.5% Production Service Credit and Quebec’s 20% Production Service Credit (both offering the credit on labor and production spend).

United Kingdom

In its latest effort to continue investing in the animation industry, the UK government recently expanded the Audio-Visual Expenditure Credit (AVEC) to a remarkable 29.5% for animated projects, a move which has been widely praised by the industry.

A shining example of the success of British animation studios, Aardman Animations is renowned for its signature stop-motion and clay animations. In 2020, the studio achieved an impressive global revenue of $1.1 billion (USD), averaging $135.6 million per film. One of their most celebrated films is ‘Chicken Run’ (2000), which made it the studio’s top-grossing film as well as the highest-grossing stop-motion film of all time. Aardman Animations’ ‘Wallace & Gromit: Vengeance Most Fowl’ (Netflix) is nominated for Best Animated Feature at the 2025 Academy Awards, marking a return to form for the iconic stop-motion studio.

Another notable name in the industry is Blue Zoo Animation Studio, recognized for its children’s television series and short films. The studio has won numerous BAFTAs as well as an Emmy Award for its production, The Adventures of Paddington.’ Other more well-known children's series produced by the studio are ‘Alphablocks,’ Numberblocks,’ and ‘Miffy’s Adventures Big and Small.’

Hailing from East London 3 Mills Studios is known for its work on the Wes Anderson films ‘Isle of Dogs’ and ‘Fantastic Mr. Fox,’ as well as Tim Burton’s ‘Frankenweenie’ and ‘Corpse Bride.’ For ‘Isle of Dogs’ the studio crafted an astounding 1,105 animatable puppets, which involved the dedicated work of 12 sculptors working six days a week, alongside an additional 2,000 puppets designed for background characters. 

Ireland

Ireland’s animation industry has also experienced remarkable growth over the past decade, contributing over $100 million annually to the local economy and providing employment to 1,600 full-time staff, a significant rise compared to 70 positions a mere decade ago. Irish studios have been successful in producing content for global audiences, partnering with major broadcasters like Disney, Nickelodeon and Cartoon Network.

The Irish government has maintained its strong commitment to animation incentives, with Section 481 continuing to offer a 32% tax credit, along with regional incentives that make Ireland highly competitive.

Additionally, Animation Pathways Fund, sponsored by Screen Ireland and Animation Ireland, provides funding to provide work opportunities on productions for above- and below-the-line professionals from under-represented communities and individuals striving to advance their careers where current barriers may exist.

These investments into the animation sector have allowed several Irish animation studios to thrive and create original 2D and 3D content, often drawing inspiration from Irish folklore and culture. Notably, animation studio Cartoon Saloon has gained recognition for its animated feature films ‘The Secret of Kells,’ ‘Song of the Sea,’ and ‘Wolfwalkers’ and the cartoon series ‘Puffin Rock.’ Cartoon Saloon continues to expand its footprint, with multiple projects in development.

The studio’s most recent animated film ‘My Father’s Dragon’ won multiple awards, including Best Irish Feature at the 2023 Irish Animation Awards.

Boulder Media, one of the country’s largest animation studios, was recently acquired by Australian media company Princess Pictures. Boulder Media produced acclaimed animated series like ‘Transformers’ and ‘My Little Pony’ under then ownership of Hasbro. The studio also produced international content for BBC’s ‘Go Jesters’ and ‘Danger Mouse.’

Brown Bag Films, too, have made significant contributions in creating serial programming for international television networks. Their portfolio includes BBC’s ‘Octonauts,’ Disney Junior’s ‘Doc McStuffins’ and ‘Vampirina’ and 'Wobbly Land’ for Nickelodeon UK.

France

France has firmly established itself as a leading producer of animated content in Europe. With animation dating back to the early 1900s, some even credit the French with inventing the genre. Over the years French animation studios have produced some of the highest acclaimed animated movies, including 'The Triplets of Belleville’ (2003), ‘Ernest and Celestine’ (2012), and ‘The Little Prince’ (2015).

France offers a 30% to 40% tax rebate on eligible expenses incurred in France, with a cap of €30 million per project. To retain its position as an animation powerhouse with the support of reforms, France continues to increase funding for animation; an expansion of its CNC tax credit system was introduced in 2024. This includes increased rebates for projects hiring locally trained animation talent and additional incentives for innovative animation techniques and projects that meet sustainability benchmarks.

Additionally, legislation requires local broadcasters to invest a portion of their revenue in the creation of original animated content. France Télévisions (FTV), the public broadcaster of the country, stands as the most significant commissioner of animation, annually investing €32m in the animation sector. It is estimated that the total investment in animated series from broadcasters annually in France surpasses €60 million.

In recent years France’s animation industry has experienced significant growth, as the number of animated movie production companies have expanded from 68 in 2004 to 163 by 2020. With a continuous demand for content, the animation sector has been able to tap into a rich source of talent, as more than 500 students graduate from French animation schools every year.

Universal’s Illumination Studios Paris (formerly known as Illumination Mac Guff) is credited for producing some of the most internationally recognized animated films in recent years, including “Sing 2” (2021), “Minions: The Rise of Gru” (2022). Illumination Studios had another record-breaking year with ‘The Super Mario Bros. Movie’ (2023), which grossed over $1.3 billion globally, reaffirming France’s status as a major animation production hub.

Animation at the forefront

These countries, among others, have recognized the economic and cultural significance of the animation market and understand that investing in infrastructures is vital for strengthening their presence in the global animation industry.

Animation studios worldwide have produced some of the most iconic films cherished by audiences worldwide, with charming characters and innovative storytelling. And as animated films consistently rank as some of the highest-grossing films, it's no surprise that animated films are competing with (and in some cases outperforming) non-animated movies at the box office.  

The 97th Academy Awards will take place on Sunday, March 2. This year’s ceremony will recognize animation from across the globe:

BEST ANIMATED FEATURE

• Flow (Director: Gints Zilbalodis) Janus Films/Sideshow
• Inside Out 2 (Director: Kelsey Mann) Disney/Pixar
• Memoir of a Snail (Director: Adam Elliot) IFC Films
• Wallace & Gromit: Vengeance Most Fowl (Directors: Nick Park and Merlin Crossingham) Netflix/ Aardman Animations
• The Wild Robot  (Director: Chris Sanders) Universal/DreamWorks

BEST ANIMATED SHORT

• Beautiful Men (Director: Nicolas Keppens)
• In the Shadow of the Cypress (Directors: Hossein Molayemi, Shirin Sohani)
• Magic Candies (Director: Daisuke Nishio)
• Wander to Wonder (Director: Nina Gantz)
• Yuck! (Director: Loïc Espuche)

If you haven’t had a chance to watch some of these films, a movie and popcorn night might be the perfect way to prepare for the big event!

Looking for more information about incentives available to animation, VFX, and other production? We encourage you to refer to our incentives map for a detail summary of US and International production incentives for animation and all types of production. In addition, the incentive pages offer a jurisdiction comparison tool and incentives estimator to help productions determine the best incentive jurisdictions available world-wide.