Economic Impacts of Olympic Games
The UK government has vowed to capitalise on the success of the Olympics to boost the struggling economy. Olympic Games have an immediate short-term impact on the host city and region in terms of local investment and regeneration. However, in many cases, host countries have not being able to generate longer-term impacts.
Before reaching the wrong conclusion we want to analyse the impacts, benefits and legacies of past Olympic Games.
Sidney 2000
Price Waterhouse Coopers concluded that the Sydney Olympic Games delivered substantial benefits to the region including about $3 billion in business outcomes and over $6 billion in infrastructure developments. The tourism revenue reached $6 billion during 2001.
Athens 2004
The Greek government spent €10 billion ($12.3 billion) to stage the Athens Olympics that led to a number of positive developments for the city's infrastructure. €1.3bn ($1.6 bn) was destined to transport improvements that include connections to the stadiums and athletes’ village.
The economic activity associated with the preparation for the Olympics had a positive effect on the Greek economy. Greek GBP expanded by 5% during the following years. The annual growth reached 4.7% due to an increase in the domestic demand triggered by investment and construction activities linked to the Olympic Games. The Olympic Games left Athens with a significant infrastructure that improved the living conditions of all its inhabitants. The Olympic village provided houses to approximately 3,000 families, an important contribution to social housing in Greece. Greek tourism increased steadily during 2000-2, but suffered a setback in.
Beijing 2008
To prepare for the games, China invested nearly $40 billion in infrastructure alone from 2002 to 2006, transformed the cityscape of Beijing. The Olympics have had a significant influence on Beijing's economic development, environment, and the growth of the country's advertising, television, Internet, mobile phone, clean energy, and sports sectors.
Transport improvements included 5 additional metro lines completed between 2004 and 2008, contributing over 50 new stations. A further 13 lines will be completed or have major work.
Some sectors of the economy may have benefited from the influx of tourists, but other sectors, such as manufacturing, lost revenue due to plant closings related to the government's efforts to improve air quality.
An analysis by Tobias Birkendorf concluded that the main economic legacy attributed to the Beijing Olympic Games was the infrastructure investments that led to improvements of production conditions for domestic and foreign business. As a consequence of this, Beijing became more attractive to foreign investors.
London 2012
David Cameron is confident that the Olympics can generate 13 billion pounds for the UK’s economy over the next 4 years. Dr Adam Blake at the University of Nottingham analysed the likely impact of the Olympics on GDP and concluded that the total UK GDP in the period from 2005 to 2016 would be increased by £1.9 billion as a result of the Olympics.
Goldman Sachs economists are less optimistic. They have warned to be cautious over the real benefits of holding the Olympic Games.
Evidence shows that the Games have a positive impact on perceptions about the host city as a result of the publicity given to the host city and region, which attracts investment. London, which is already a high profile city, may benefit from additional publicity that will help it to continue to compete with other European business destinations.