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Economic and social impacts of the Olympics
Economic and social impacts of the Olympics
Positive economic impacts associated with the preparation of the Olympic games
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Introduction
The ancient Olympic Games originated in Greece in 776 BC and were started as a mark of respect to the Greek gods. But the ancient Olympic Games ceased in 393 AD, because the roman emperor Theodosius decreed that the ancient Olympic Games were a pagan cult. The modern Olympic Games started again in 1894 and continue to this day.
The Olympic Games are held every four years with the main intent to “promote people’s physical and psychological level, likewise to promote different country’s people, have more communication and to help maintaining world peace” (official website of Olympic movement). However, there are many risks in hosting the Olympic Games, for example the effects of an economic downturn after the closure of a host country’s
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Games and with the 2016 Olympics looming this is a contentious issue. Some scholars describe this phenomenon into three categories of risk: blind investment, Venues underutilized, bubble economy. These three risks have become known as “the valley effect”. Indeed as a consequence of the ‘valley effect’ the question of whether they are still worth hosting has arisen. Many Countries still continue to bid to host, and make it better than before. However, there are questionable benefits received from hosting the Olympics and the setbacks to each benefit a country receives from the opportunity. This essay will explain the main causes of the “valley” effect of the post-Olympic Games and the subsequent effect that this has on the host country’s economy. Explain The “valley” effect of the post-Olympic games refers to the phenomenon that some economies were hit by a post-Olympic economic downturn.
The phenomenon was mainly caused by a dramatic investment increase or excessive social and psychological expected at the pre-Olympic stage. Normally, it will lead to a waste of infrastructure, facilities idle, the Olympic host city real estate prices fell, and the stock market fell, in part or in overall economic growth slow down after the Olympic Games. According Josh Sanbum’s report “For years, studies have shown that holding the Olympics often has severe negative economic effects on host cities, despite the temporary burst of tourism and global attention. The competition between cities often causes governments to go financially overboard merely to win an Olympic bid. Once construction gets under way, governments often fail to budget properly. And after the Games are over, many cities are left with infrastructure that suddenly has no real use.” (2012).That shows the Olympic Games often has serious negative economic effects on host …show more content…
cities. Blind investment The first cause of the ‘valley effect’ is ‘blind investment’ which comes before the beginning of each Olympic Games, which means too much investment that comes from the government and which is used to build new venues and improve infrastructure. Every Olympic Games can stimulate the demand of the host country’s investment, but not all of the Olympic Games can get more in return compared with investments. Sometimes, income from investments is less than investments themselves. In general, the Olympic investment, including direct investment and indirect investment.
The direct investment refers to investment in direct expenditures Olympic venues and service facilities as well as the organization of work and so on. The indirect investments are held in order to improve the environment, transportation, communications and other infrastructure in the host city. Moreover, the Olympic revenue also includes direct income and indirect income. Direct income includes aspects of souvenir sales, Olympic sponsors and partners to provide sales and television rights. In addition to these direct revenue items, the host city will attract numerous tourists come for sightseeing, taking a variety of cultural events for the Olympic Games, the hotel accommodation costs and other consumer visitors during their stay in the host country but also to bring employment and increase revenues, which called indirect
income. Profit and loss report on the Olympics host country of the Olympic Games announced are by comparison with direct investment in the Olympic Games between direct income and does not include large scale infrastructure investment and earnings. Since the Olympic host cities in developed countries already have better urban infrastructure, it does not require large-scale transformation of urban construction and infrastructure, so the Olympics direct investment in these countries accounted for most of the total investment. For example, the 2000 Olympic Games in Sydney, the Australian federal government invested a total of $ 320 million, but only $ 190 million for the Sydney urban renewal fee. In accordance with the investment budget for the Beijing 2008 Olympic Games, Beijing hosted the Olympic Games were the largest investment in the history of the Olympic Games, with a total investment budget of $ 35 billion, most of which will be used to improve the city's infrastructure, for the construction of Olympic venues and operating costs and other direct investment of about $ 3.5 billion. For nearly $ 3.5 billion in direct investments Olympics, Beijing Olympic Organizing Committee if reasonable operating cost recovery or profit is very possible (James, 2010). However, the scale of direct investment of nearly 10 times for urban infrastructure improvements and beautification how indirect investment environment recovery is still a problem. Therefore, all Olympic-related investments are proved that optimistic thoughts clearly expected return is not rational. The effects of the above “blind investment”. Each Olympics will stimulate demand for the investment in the host city, but not all will get a high return on investment. It is often less than the Olympic Games investment. These income are less than expenses after the Olympic Games. The consumption is reduced in short time, the investments could not recover the cost, so that result in deficits and large debts. According Nick Malkoutzis “many Greeks may wonder how their country went from the international glory of the Athens Games in 2004 to the recriminations of today’s crisis. Hosting the event cost almost €9 billion ($11 billion at today’s exchange rate), making the 2004 Games the most expensive ever at that point. Greek taxpayers were on the hook for €7 billion, which did not include Olympic Games income is less than expenses after the Olympic Games” (2014).The consumption is reduced in short time, the investments could not recover the cost, so that result in deficits and large debts. According Nick Malkoutzis “As they watch the London Olympics, many Greeks may wonder how their country went from the international glory of the Athens Games in 2004 to the recriminations of today’s crisis. Hosting the event cost almost €9 billion ($11 billion at today’s exchange rate), making the 2004 Games the most expensive ever at that point. Greek taxpayers were on the hook for €7 billion, which did not include the cost of extra projects such as a new airport and metro system.”(2014). that means for Greece, the excess investment in the Olympic causes severe government debt. Greece's budget deficit in 2004 accounted for 6.1% of GDP, it is on the line more than twice the euro-zone, while debt reached 110% GDP, is the highest in Europe (Steven Rosenblum, 2009). Thus blind investment is very dangerous for Olympic host country’s economy.
Since 776 BCE, the Olympics have been a way for people of different cultures to come together and compete in friendly competition. In 1892 the first modern Olympics were held in Athens, although it had been over a thousand years since the last game it still had brought together an assortment of different religions and ethnic groups together. Many factors shaping the Olympic Games reflect the changes that have taken place in our world since the last game in 393 CE in Greece such changes include woman’s suffrage, global economy, world wars, and proving competency.
First of all the stadiums and the teams always seem to be a great contender for positive economic development jobs focusing on helping the economic growth of a city. However, this is different from other economic improvement devices like tax credit, sports stadiums, soccer pi...
The sports industry is a very big business that contributes great amounts to the economy in terms of turnover, taxes and jobs. The sports industry has an economic cycle. So it depends on different parts of the year to hold big events. The benefits to be gained are that local communities as suppliers of services and goods obtain increased business.
The Ancient Greek Olympics were not only sporting events, it was a celebration to honor the great and powerful Zeus. The Ancient Olympics were held every four years at the famous Olympia, a district of Elis, here all free Greek men were allowed to compete. The first record of the Olympic Games was held in 776 B.C. The main sports were the Pentathlon, the Equestrian Events, Pankration, and Boxing.
The following essay provides discussions of the scope and objectives of the London Olympic Games 2012, and identifies event major stakeholders. Work break-down structure, McKinsey 7S, PESTLE Model and other relevant planning techniques will be introduced to demonstrate project requirements such as infrastructures, financial, man-power, technologies, resources, risks management, operations, procedures and more. This essay will also point out the obstacles faced by the project manager during the preparations of the events, and provide solutions adopted that influenced project outcomes.
With the Olympic games being held in Sydney this year, I wondered if perhaps the performance of the economy was being affected in part by the fiscal stimulus provided by Olympic construction in Sydney and other parts of the country. Australia’s economy has been performing well recently, suggesting that there might be some effect. Over the last five years, growth in Australia’s gross domestic product has averaged 4.35%, almost a full point above it’s thirty year annual average of 3.5%, and the unemployment rate is near a ten year low. According to one estimate, the Olympics will tack on an additional six and a half billion dollars, about 1.6% of the GDP, to Australia’s GDP over the 1994-2000 period. A natural question to ask is if this growth is due primarily to the Olympic preparation, or if, instead, it is a result of some other change in policy, or perhaps just plain old luck.
Hosting the Olympics comes with many perks for such as, prestige, the creation of new facilities and countless amounts of benefits. With so many things the Olympics has to offer, there can be numerous reasons why countries compete to be elected as the hosting country for the Olympics. The most common reason countries want to host the Olympic is because of its potential ability to improve the country’s economy significantly. With the entire world participating in the Olympics, the hosting country can market...
In Preuss report:“ 26% of those surveyed regarding the Sydney games stated increase tourism as a reason to host the Olympics. In 1998, an ATC study reported an expected increase in tourism of 1.6 million visitors due to the Olympics.”(qtd. in Moss) This is a great opportunity to showcase Boston to the millions of viewers all over the world and a unique superiority to the other competitors. And the tourist trade will face an increase that occur only once in a thousand years. (Boston 33).“ An Oxford economics study estimated that the Olympic games will have generated 16.5 billions of pounds for the British economy by 2017.”(International) And the report of Chinese Tourist Agency shows that the number of oversea tourist arrival had been raised around 19% from 2008 to 2010, international tourism receipts of 2010 from oversea tourists is about 4 billion dollars more than 2007.(China) The Olympic games is the best advertisement for a city even a nation. Considering the United States’ wide territory and its influence in the world, the Boston Olympic Games is a good point for the tourists to travel to the greater Boston region, even the United States, and the tourist trade will
Businesses in New South Wales won A$1bn worth of contracts from the Sydney games and an additional A$300mn was generated by local business. Over 55,000 people received employment related training. If London hosted the Olympic games, thousands of UK firms could be involved in supplying everything from construction to manufacturing, catering to merchandise.
The Olympic Games were started by the Greeks a long time ago. It was in the honor of Zeus, the kings of the gods and were part of a religious festivals. They started in 776 B.C. The games were held every four years in Olympia, which is located in southeast Greece. People came from all around Greece to take part or just watch the games. Events in the Ancient Olympic Games were boxing, chariot racing, riding, pentathlon, discus, javelin, jump, running, and wrestling. Events in modern Olympic Games are swimming, diving,
Hosting the Olympic Games has proved to positively affect the economy of several cities in many different countries across the globe. Three host cities that have experienced a boost in economy and national attention are the 1984 Los Angeles Olympics, the 1988 Seoul Olympics, and the 2012 London Olympics. LOS ANGELES To begin, the 1984 Los Angeles Olympic Games were very financially and economically successful as a result of smart infrastructure investment.
It is evident that the Olympic Games are popular and have worldwide support, but one cannot ignore the lead up to the games in which host cities spend exorbitant amounts of tax dollars to revamp areas of the city that leads to many forced evictions. While some may acknowledge that some people are indeed displaced due to new construction, and there is a lot of money spent up front for the games, they may counter that the monetary and societal rewards reaped later will be huge. But, this paper will rebuke those claims by providing examples that exhibit that the oft asserted financial gains rarely come to fruition and that the societal impact is anything but rewarding. Lastly, even though any change is unlikely, two proposals, which could curtail some of the negative impacts brought on by the Olympic Games, will be offered, which are either create a permanent Olympic site, or hold the games less frequently, on a rotating basis,...
The Olympics is a mega sport event which is presented once every four years and it has become a golden opportunity for hosts to emerge as a strong country. Hosting the Olympics is a big thing for every country and they receive worldwide attention from the preparation period until the actual event. However, hosting the Olympics comes with heavy stakes and experts tend to argue about the appropriateness for the countries to host it. There may be people who oppose with hosting the Olympics, however, the country rebranding, the economy hike and also the pride and patriotism of citizens just demonstrate the need of hosting the Olympics for the development of the country.
(2012) noted, capital is a vital part of resources of events management, and Goldblatt (2014) stated the primary reason cause unsuccessful events planning is fail in financial management. Because financial decisions occurred alongside the event, as a result, the skill of maximising the effectiveness of money resource in the events management is considerable for events managers. The key skills in effective financial management includes creating an accurate budget and maintaining sufficient balance, different financial strategies should be applied according to different objects of the events , for those for-profit events, selling products is the event organisers’ purpose such as the new product launch of Apple Inc., which the income exceeds costs. For more general events that for the purpose of leisure, however, budgeting is one of the most difficult challenges from the start of the events planning, which based on limited information and assumptions (Goldblatt, 2014). Hence the event managers need strong capability of analysing the previous events’ financial history with the current economy environment, to estimate the total cost appropriately. When conducting the event’s plan, maintaining a balance in the financial account requires the event managers make effort in aspects of reducing the cost and increasing revenues, which test the event managers’ skills in making the best of fund. In 2008, China successfully held the 29th Olympic Summer Games under the global economic crisis, which achieved a balance of more than 1 billion yuan by the National Audit Office’s supervision, but with the existed problems of over-budgeting and underutilisation of some projects and materials, which still conducted the fund-raising under effective control (BOCOG, 2010). In a result, an effective financial management needs rational anticipation on the problems (budgeting) and making the most use of the resources (keeping financial balance). In addition, the costs of
Introduction Today, the Olympic Games are the world's largest pageant of athletic skill and competitive spirit. They are also displays of nationalism, commerce and politics. Well-known throughout the world the games have been used to promote understanding and friendship among nations, but have also been a hotbed of political disputes and boycotts. The Olympic games started thousands of years ago and lasted over a millennium.. The symbolic power of the Games lived on after their demise, and came to life again as the modern Olympic Games being revived in the last century. Both the modern and Ancient Olympics have close similarities in there purpose and in there problems.