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Impact of 2012 Olympics on London and UK Proposal


Introduction

Olympics forms part of the world’s major sporting events. The event is enormous and complex, making it a rather difficult project to put together. While arranging to host such a mega event, it is critical for the host nation to assess with accuracy the potential impact that the event will have on the nation and its population.

The aim of this research shall be to establish the economic, social-cultural, and environmental impacts of the 2012 Olympics on London at its environs, with the objective of contrasting the pre-Olympics estimates of the impacts and the actual effects as determined after the event.

Background of the Study

Over the years, it has become important for the International Olympics Committee (IOC) to assess the impacts of the games on the host countries (Lee 2001). This move by the IOC came after the realization that the impact of the games on the host countries’ communities was long-term.

There was thus need to carefully determine the positive and negative effects that this sporting event held for the hosting nation before the games were held in order to maximize the positive gains and minimize the adverse effects. In other words, the assessment helps to enhance the intended impacts while reducing the unintended ones.

By so doing, IOC figured out that Olympic Games would become more sustainable which is important if the sporting event is to achieve its goal of bringing the world together through games (Houck 2009).

There are three key dimensions to the attainment of sustainability namely economic, social-cultural, and environmental aspects. A mega sporting project like the Olympics harbors substantial long-term effects to the host community on each of these dimensions (Houck 2009).

The aim of these games is not only to unite the world, but also to promote the economic, social and cultural welfare of the host communities and, at the same time, ensure that the environment does not suffer negatively due to the event.

The 2012 Olympics Games

The 2012 Olympics games will be staged in London. The major reason the city bid for these games was the need to create a long-term sustainable legacy for both London and the United Kingdom (Porter 2011). Part of this bequest involves economic development of some of the underdeveloped regions in London such as East London, and the UK in general.

Another legacy that the nation hopes to achieve through the Olympic Games is the creation of an urban park that will be the greatest in Europe. Other objectives relating to the games include promoting the development of road infrastructure and residential buildings, as well as encouraging locals to participate in games and similar activities in order to enhance their lives (Null & Zimbalist 2008).

According to the UK government, the Olympics Games avail a very grand opportunity for inspiring the youth in the country to engage in new activities, acquire new skills, and to connect and build networks with the global community. Thus, the agenda of these games as far as the UK government is concerned relates to the young people.

The Vision and Objectives of the 2012 Olympic Games

The vision of the 2012 edition of the Olympics is to stage an inspiring and all-embracing sporting event that will leave sustainable positive long-term impacts on London and the UK (Null & Zimbalist 2008). The vision has been further broken down into more measurable objectives as follows:

  • To host sensational Olympic and Paralympics games.
  • To construct the Olympic Park and other infrastructure for the games and deliver them within schedule.
  • To promote the economic and social welfare and environmental conditions of East London and the UK in general.
  • To improve sporting events in the UK.

Governance of the 2012 Olympic Games

There are a large number of players involved in organizing the 2012 Olympic Games in London (Porter 2011). One of the players is the Olympic Board which is charged with ensuring successful delivery of the games. Another player, the Olympic Delivery Authority, is in charge of developing infrastructure and venues for the games.

Moreover, the London Organizing Committee has been given the role of showcasing the 2012 games. Other significant bodies governing the event are the Greater London Authority in charge of strategic matters of the event, and Government Olympic Executive whose role is to oversee that the legacies set out for these games have been achieved.

External players include the International Olympic Committee and its representative bodies (Menshesha 2009). Successful hosting of the games is crucial to advance the interests of both the UK government and the IOC as well as those of the global community.

Research Objectives

The objectives of this research shall be as follows:

  • To establish the economic impact of 2012 Olympic games on London and UK.
  • To establish the social-cultural impact of the games on London and UK.
  • To establish the environmental impact of the games on London and UK.

Research Questions

  • What is the economic effect of 2012 Olympic Games to London and the UK in general?
  • What is the social and cultural impact of the games to London and the UK?
  • What is the environmental impact of the games?

Hypothesis

  • A statistically significant variance exist between estimated pre-Olympics predictions of the economic, social-cultural and environmental impacts of the games, and the actual effects of the event as determined after the games have been held.

Significance of the Study

This study will be very important to the various stakeholders who harbor an interest in these games as it will reveal the potential economic, socio-cultural, and environment effects of the event to the UK population. From the results of the study, appropriate measures could be taken to minimize the negative effects and to maximize the positive ones.

Literature Review

Economic Impact of Mega Sporting Events

There has been a lot of controversy regarding the economic effects of mega sporting events on the host nations (Lee, 2001). Many researchers have claimed that the surveys carried out to assess the economic impacts on the local communities produce invalid results because of exaggeration.

Moreover, evidence shows that the greatest beneficiaries of these events are corporations through supplying materials and infrastructural facilities, as well as through the marketing opportunities availed by the events (Anderson 2001).

On the other hand, studies shows that governments usually end up with deficits from these events, together with obsolete sporting infrastructure which have little usefulness after the games are over. A good example is the bird nest stadium of China that was hosting the Olympic Games.

This arena has seen very little use since the end of 2008 Olympic Games. The economic impact on the local communities has also been ascertained to be very minimal (Baade & Matheson 1999).

Yet, prior studies into the effects of large sporting events on host countries have often predicted positive economic impacts by the events. There are various reasons that have been given for this exaggeration. To start with, the surveys do not take into account the substitution effect of the games (Baade & Matheson 2001).

When the local people attend a major sporting event in their country, they are in effect putting aside their day to day economic activities. Therefore, the sporting events cause a decrease in the level of real economic activity in the host country.

Another factor of major sporting events that studies fail to consider is the crowding out effect. Major sporting events are often hosted in nations that are popular tourist destinations such as London and Beijing. Thus, the economic impact of the events tends to be replacing tourism economy with sporting economy, the net gain being very minimal or a deficit (Baade & Matheson 2000).

Thirdly, the researches do not take into account whether money spent on major sporting events remains in the domestic economy or it goes elsewhere. Much of the money expended by foreign visitors to mega sporting events goes to the hospitality industry which is suffused with many multinational companies (Anderson 2001).

Thus, such expenditures do not benefit the domestic economies but instead, they benefit the resident countries of the multinational companies where majority of shareholders of these companies are based.

In the same way, most of the proceeds from ticket sales are passed to the governing bodies of the sporting events, for instance, in the case of Olympic Games, the proceeds go to the International Olympics Committee or IOC.

Fourthly, there are other indirect economic impacts of the events that are not considered by studies (Anderson 2001). These include traffic jams, interference with the residents’ way of life, environmental pollution, and economic sabotage by law-breakers who take advantage of the confusion brought about by the presence of so many foreigners in the host nation.

Lastly, the underlying aim of most researches on the economic effects of mega sporting events has been usually to promote the ends of sports promoters, usually multinational companies (Baade & Matheson 1999). The interest of these companies in promoting the sporting events is to obtain marketing opportunities and contracts for supplying sporting merchandise and services.

However, it is very expensive to lay down the sporting infrastructure for major sporting events and this can only be done using public funds. Therefore, to validate government expenditures on sporting facilities, sports promoters tend to exaggerate the economic impacts of major sporting events, while discounting the negative impacts that the events cause to the domestic economy.

An Empirical Investigation of the Economic Impacts of Mega Sporting Events

The fact that many surveys on the economic impact of large sporting events are exaggerated points out to the need to devise a tool of ascertaining the true economic effects of such events (Houck 2009).

One way of assessing the validity of these studies is to compare the predicted economic impact of a previous mega sporting event and the actual results obtained by the host country or city.

Various empirical researches have been carried out on the experiential economic effects of mega sporting events and the building of new sporting infrastructure (Mensheha 2009).

Regarding sporting infrastructure, many researches have investigated the association between the constructions of new infrastructure and the economic growth of host cities and countries (Baade, 1996). In all the researches, it has been ascertained that there exist no statistically significant relationship between the establishment of new sporting facilities and economic growth.

This is contrary to the arguments of sports promoters and committees who contend that mega sporting events hold huge economic benefits for host countries that can justify the huge public expenditures by the local governments on games infrastructure (Coates & Humphreys 1999).

The impact of the sporting events on the host cities day to day economy as well as employment is also often hyped in pre-Olympics studies on the economic effect of the games to host cities.

For example, it was estimated that the 1996 Olympic Games held in Atlanta Georgia would rake in $5.1 billion to the country through both direct and indirect economic activities, while creating around 77,000 jobs (Humphreys & Plummer 1995).

However, the post-studies of the event indicated that the economy grew by a paltry $440 million from the event, a far cry from the estimates given under the auspices of the International Olympics Committee (Humphreys & Plummer 1995).

The constant discrepancy between the estimated economic impact of major sporting events and the actual results provides a sufficient cause to investigate the real economic impact of such events to the host nations. The events should create a win-win situation for both the hosting nations and the organizing committees (National Football League 1999).

Social-Cultural Effects

It is predicted that the 2012 Olympic Games will have various social and cultural effects on the population of London and the UK in general (Menshesha 2009). The effects of the games on the local community include promoting goodwill, cooperation, and volunteer spirit.

The construction of the Olympic Site will also have lasting social effects on the people of London. Moreover, the effect of the event on domestic culture is expected to occur through the Cultural Olympiad and several other culture-associated activities that will take place with the event.

In addition, interaction with foreign cultures will provide the UK people with more exposure regarding the way of life in other parts of the world (Noll & Zimbalist 2008). Such interaction is crucial to improving the hospitality of the country’s population.

It has been argued that the 2012 Olympics will enhance education, health and communication technology in London and the United Kingdom (Porter 2011). The event has also been touted as having the ability to bring a sense of cohesion and inclusion in the UK society by encouraging community members to participate in organizing the event.

Moreover, the housing sector is expected to grow thereby enhancing the quality and accessibility of housing for the local population. Also, the overall health of the nation is predicted to improve as the games will portray the value of physical activities and exercise (Porter 2011).

Similarly, safety and security is anticipated to improve in London through increased investment in surveillance equipment with the view of averting any security threats such as terrorism that could target this event. Such enhancement in security infrastructure is likely to live on even after the Olympic Games are over.

Environmental Impacts

Environmental sustainability is one of the priorities of the London 2012 Olympic Games. As a result, specific action programs have been drawn by the organizers which seek to reduce the adverse effects that the games could have on the environment (Baade & Dye 2010). There are various environmental aspects that the programs have focused on.

One of the areas is ensuring that the air quality during the games is as natural as possible. Mega sporting events have the capacity of compromising the quality of air which is a threat to human health (Seigfried & Zimbalist 2000). Therefore, taking measures to guard against deterioration of the quality of air during such events is very crucial.

Other areas that the programs are concerned with are avoiding interfering with ecosystems, reducing the impact on climate change, and ensuring proper waste management during the event (Baade & Dye 2010). The contribution of the games to land, water, and noise pollution will also be kept at a minimum according to the objectives of the environmental sustainability programs.

Other environmental plans by the organizers are promoting the adoption of carbon taxes and improving recycling of waste materials in the city of London and in the UK at large.

Methodology

As pointed out earlier, the aim of this research shall be to assess the economic, social-cultural, and environmental impact of the 2012 edition of Olympic Games to London and UK. The objective of this assessment will be to compare the estimated impact and the actual impact, to find out if there will be any statistically significant variance.

Before holding any edition of Olympic Games, a lot of studies are done to assess the effect of the event on the host country. Thus, there are numerous sources of information of data from studies commissioned by both the organizers and governments.

The aim of the organizers is to justify public expenditure in building infrastructure for holding the event. Governments, on the other hand, are concerned with the effect of the games on their countries economies.

In light of the above situation, this study shall rely exclusively on secondary data that is publicly available regarding the economic, social-cultural, and environmental impact of the 2012 Olympic Games. Thus, the research is not going to undertake any primary data collection.

This approach bears some advantages in that the researcher will be able to save on both time and money and, at the same time, produce high quality research results since the available secondary data on the 2012 Olympic Games is very reliable. The data that is available at present regarding these games is based on estimates.

After the games have been held later in June 2012, the actual data on the impact of the games will become available. This research will then compare the actual data to the estimates to establish whether there is any statistically significant discrepancy.

Some of the data sources that will be used include the studies of the Economic and Social Research Council on the impact of the 2012 Olympics Games, the UK department of Culture Media and Sports’ survey on the effect of the 2012 Olympics, and studies on the event by various institutions of higher learning such the University of East London.

Results

The results of the study will either confirm or negate the null hypothesis that a statistically significant discrepancy exist between the estimates of the positive impact of Olympic Games on the host nation and the actual impacts.

These results could form the basis for further research to determine the cause of variance in case the null hypothesis will be confirmed, or the reason behind the claims if the null hypothesis is negated.

Conclusion

There have been claims from various sources that sports promoters and governing bodies are the main beneficiaries of the mega sporting events in the world. In contrast, the hosting countries are said to reap very little benefits that are far from those promised by the promoters of these events.

This research shall seek to establish or disprove those claims by comparing the estimates of the economic, social-cultural, and environmental impacts of the 2012 Olympic Games with the actual results after the event.

Reference List

Anderson, T 2001, St. Louis Ready to Raise NCAA Flag if Atlanta Cant’’, St. Louis Business Journal, January 19, 2001.

Baade, R & Matheson, V 1999, ‘‘Assessing the Economic Impact of the Summer Olympic Games:The Experience of Los Angeles and Atlanta’’, Forthcoming in the conference proceedings of the International Conference on the Economic Impact of Sports, Athens, Greece.

Baade, R & Matheson, V 2000, ‘‘An Assessment of the Economic Impact of the American Football’’, Reflets et Perspectives, 34(2-3), 35-46.

Baade, R & Matheson, V 2001, ‘‘Home Run or Wild Pitch? Assessing the Economic Impact of Major League Baseball’s All-Star Game’’, Journal of Sports Economics, 2(4), 307-327.

Baade, R 1996, ‘‘ Professional Sports as a Catalyst for Metropolitan Economic Development’’, Journal of Urban Affairs, 18(1), 1-17.

Baade, R. & Dye, R 2010, ‘‘The Impact of Stadiums and Professional Sports on Metropolitan Area Development’’, Growth and Change, 21(2), 1-14.

Coates, D & Humphreys, B 1999, ‘‘The Growth Effects of Sports Franchises, Stadia, and Arenas’’, Journal of Policy Analysis and Management, 14(4), 601-624.

Houck, J 2009, ‘‘High-stake Courtship’’, FoxSportsBiz.om, January 21, 2000,

Humphreys, J & Plummer, M 1995, The Economic Impact on the State of Georgia of Hosting the 1996 Summer Olympic Games, Mimeograph, Athens, Georgia: Selig Center for Economic Growth, TheUniversity of Georgia.

Lee, S 2001, ‘‘A Review of Economic Impact Study on Sport Events’’, The Sport Journal, 4(2).

Mensheha, M 2009, ‘‘Home-court Edge: Final Four Promises to be Economic Slam Dunk’’, San Antonio Business Journal, March 27, 1998.

National Football League 1999, ‘‘Super Bowl XXXIII Generates $396 Million for South Florida’’, NFL Report, 58, 7.

Noll, R & Zimbalist, A 2008, The Economic Impact of Sports Teams and Facilities, In Noll, R. & Zimbalist, A Sports, Jobs and Taxes, Washington, D.C.: Brookings Institution.

Porter, P 2011, Mega-Sports Events as Municipal Investments: A Critique of Impact Analysis.In Fizel,J., Gustafson, E. & Hadley, L. Sports Economics: Current Research, Westport, CT: Praeger Press.

Seigfried, J and Zimbalist, A 2000, The Economics of Sports Facilities and Their Communities, Journal of Economic Perspectives, 14(3), 95-114. www.foxsports.com/business/trends/z000120allstar1.sml.

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IvyPanda. 2019. "Impact of 2012 Olympics on London and UK." April 17, 2019. https://ivypanda.com/essays/impact-of-2012-olympics-on-london-and-uk/.

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