Setting the Bar: A review of the

developmental role of the Olympics

Tracy Kornblatt

Centre for Cities at ippr

22 January 2007

About the Centre

• Economic focus: not enough research on the economics of urban regeneration – we aim to fill this knowledge gap

• Comparative context: using lessons and sharing best practises from the U.S., Canada, and Europe

• Inform, connect: feedback our findings to local officials, Whitehall, private sector stakeholders. Convene together and further the dialogue.

Outline

• Why am I here?• Background behind the Games as economic

development catalysts• Framework for thinking about the impacts• London 2012• Questions for discussion

Background – Games as Economic Development Catalysts

• Games are growing in bid popularity– Since 1984, steady increase in the number of bids,

the cost involved, and the profile of cities bidding– Common theme of ‘economic development’– Bidding cities operating under an “unquestioned

assumption that the Games will bring economic and social benefits to those who host them” (Burstyn, 2000).

– But the evidence is mixed

Although most people are familiar with the ‘Barcelona effect,’ there are other important

host stories• 1960: Rome

– First ‘big’ Games: airport, roads, street lighting• 1972: Munich

– Public debt; negative image, infrastructure• 1976: Montreal

– Serious public debt: finally paid off in 2006• 1984: Los Angeles

– Landmark profit, little infrastructure

• 1992 Barcelona– Large-scale public investment; put on the map

• 1996 Atlanta– ‘Coca-cola Games’, temporary venues

• 2000 Sydney– Image success, development disappointment

• 2004 Athens– Early to tell, but some image issues

Difficulties assessing the impact of the Games

• Infrequent, unique – attempting different things• International contexts• Most reporting is ‘official’• Counterfactual is difficult to assess• ‘Soft’ impacts that are difficult to quantify

Key impacts the Games can have on economic development

• Short term economic stimulus• Infrastructure• Political cohesion• Social impacts• Image impacts

Short-term economic stimulus

Year Games Site Estimated Employment

Source Geography

1992 Barcelona 296,640 jobs Brunet, in Blake, 2005

Spain

1996 Atlanta 24,742 FT/PT jobs77,026 jobs

Baade and Matheson

Humphreys and Plummer

Atlanta

2000 Sydney 5,300 jobs each year in 12-year Games period

Madden New South Wales

Source: Preuss, 1978 in Preuss 1998

Employment schematic

Employment continued…

• Most employment is in the construction and hospitality/services sectors

• Most jobs are short-term, some entry-level• Very different depending on the level of secondary

infrastructure• Consider where the investment is coming from –

public/private?• Areas where longer-term benefits can accrue:

– Expansion in tourism and construction sectors• ‘Alien industry’

Infrastructure

• The ideal is to pull-forward investment that matches with post-Games demand

• This can be a substantial benefit, but also risky• Minimise investment in Games-only structures

– Temporary venues– Use of dedicated roads and busses

•Unique context: decades of under-investment in urban infrastructure

•Had an existing GMP plan (1976) of investments they wanted to make

•Used the Games to pull forward large-scale infrastructure projects:

•Ring road, new city centre roads, traffic management system, airport expansion, telecommunications facilities, waterfront redevelopment, housing, renewal of parks and squares all over the city

Example: Barcelona

Political cohesion

• Sudden, unique pressure from the Games has an impact on the way political agents work with each other and the community

• Can unite, or divide, and have lasting impacts• Political red tape on projects is often averted – which can

be a good or bad thing• Political leaders become a part of the image of the

Games

Social Impacts

• The Games have had the power to uproot, unite, improve, and destroy neighbourhoods in the host city

• Often efforts to hide ‘blemishes’• Enhancing civic pride – both locally and nationally –

Atkinson et al 2006• Health/sport impact?

Example: Atlanta•Political cohesion: already racially-charge politics became even more polarised

•Politicians were seen to be working more with the business community and not enough with residents

•Social impacts: low-income housing decreased – displacement impacts

•While upper-income neighbourhoods were able to successfully move a venue out of their community, lower income neighbourhoods were unable to do the same

Image impacts

• The Olympics attract larger television audiences than anything else except “unscheduled accidents” (Tomlinson, 2000)

• Image carries great risk and reward possibilities• Smaller cities may have more to gain, more prominent

cities may have more to risk• Business investment gains, tourism gains – but not

always

Sydney

•Put Sydney – and Australia -- on the map

•Particular investment in image: worldwide ad campaigns, time with media

•Increase in convention bookings and tourism (actual impact is difficult to estimate with Sept. 11 impact) (Chalip, 2002)

•Increase in international businesses opening an office in Sydney

•Low US viewership

London 2012

Source: BBC

Source: London2012.com

London 2012

• London 2012 Games coordinated with the Lower Lea Valley redevelopment

• 4 of London’s most deprived boroughs: Hackney, Tower Hamlets, Waltham Forest, and Newham

• Costs: £2bn operating costs; £3.3bn in infrastructure • Employment impact: (2005-2016): 8,000 jobs NE

London, 39,000 Greater London, 8,000 jobs UK (Blake 2005)

Promoted benefits

• London 2012 predicts impacts (UK-wide): in business, tourism, culture, volunteering, sport

• Additional London benefits: local employment?, boost to Lower Lea Valley Regeneration, housing, athletic facilities, public park, transport improvements, long-term employment

• Each Regional Development Agency has been working on strategies to capitalise on Olympic impacts

Setting the Bar: Lessons for London

• Keep expectations, pressures reasonable• Jobs will be mostly in greater London, but maybe not so

local• Benefits of the Games will be mostly in greater London• Soft benefits – civic pride, social impacts should not be

overlooked• Costs should be updated and clarified

Closing Thoughts

• Although perceived as a development dream, the Games are risky and the impacts are not clear-cut

• Difficult to compare – evidence base is thin• Many studies on impacts are not reliable• A broader range of impacts needs consideration• There are benefits, but it’s not a windfall, so host cities

have to match investments with post-games priorities, manage risk, and think carefully before bidding

Questions for Discussion• Are cities bidding for economic development reasons, or

political reasons. Or something else?• Are the Games worth the risks? For what cities might

bidding be best?• Have the Games become too big? What now?• What more can London/the UK do to maximise the

benefits of the Games?

questions/comments?

t.kornblatt@ippr.org

www.ippr.org/centreforcities