The effects ofLondon Olympic games to the local economy

1、The effects of 2012 London Olympic Games to the local economyIntroductionAs a global competition, every Olympic Games impacts the environment, social culture and economy of the host city and country by different degrees. Especially since 1980s, with the continuous expansion of the scale of the Olymp

2、ics, a growing number of people pay more attention to the impact of the Olympics. Recently, this issue has become a hot topic again due to the 2016 Rio Olympics. The economic impact of the 2012 London Olympic Games will be discussed in this essay.In 2005, International Olympic Committee announced th

3、at the 2012 Summer Olympics will be held in London which had been the host city for twice in past years. Moreover, UK hoped that through this grand event to wake up the British economy which had already slept for a long time.London is the political center and cultural center of Britain and a famous

4、modern international city in the world, which occupies an important position in the international economy. 2012 London Olympic Games was the largest sports event ever held in Britain. In the period of preparations for the Olympics in London, the local economy and various industries developed rapidly

5、. The large-scale investment, consumption and new industries that caused by the organization of Olympic Games created a significant impact to local economy, which made huge changes of economic system. The impact of Olympic economic activities can be divide into two types. The one is direct impact an

6、d another is indirect impact. On the one hand, the direct impact caused by some investment for the Olympics such as the construction of Olympic venues and the development of Olympic resources. Moreover, the local economy can be affected directly by the service industry like tourism and retailing. On

7、 the one hand, there are varieties of indirect effects because of the Olympics. For instance, due to the competition, there are more job opportunities supported to the unemployed. Furthermore, the sustainable developments of related industries will produce some long-term economic impact after the ev

8、ent.Although the Olympic Games can bring considerable amount of positive effects, there are still some detrimental Influence which can exist for ages. Brown and Massey (2001:26) make the claim that hosting the Olympics has not always brought financial reward. Due to the large number of investment an

9、d consumption caused by Olympics, after the competition, several economic activities were dropping. In addition, the low utilization rate of Olympic venues and the maintenance costs are all adversely for the local economy.The organization of this paper is as follows. Section 1 summarizes the differe

10、nt Olympic economic impact of some hosting country. Section 2 researches the positive effects of 2012 London Olympic Games to the local economy by four different aspects which are economic situation, related industries, infrastructures and influences for surrounding areas. Finally, the different eff

11、ects will be concluded at the end of this paper, and there will be some relevant ideas and suggestions.Body1. The Previous Studies of the Olympic GamesIn the past years, there are plenty of researches to Olympic economy. Kasimati (2003) have researched into the impact of the Olympic Games and conclu

12、ded some related points. This section will use large amounts of resources form this paper and additional information from other research to summary the different economic impact of different hosting cities since 1992. Blake (2005) provides an efficient method to this study, which can visually show e

13、conomic effects of the Olympic Games on the hosting country by official data.Barcelona 1992 Brunet (1995) examined the effects of economy of the Barcelona Games. The total budget and investment up to 9.6 billion dollars. Moreover, there is a direct economic effect of 30 million dollars, with 296,640

14、 new jobs in Spain as a whole.Atlanta 1996 Friedman (2001) examined the effects of economy of the Atlanta Games. The Games generate 5.142 billion dollars, accounting for 0.07% of GDP in the United States in 1996, making profit about 10 million dollars. In addition, there are extra 77,026 job opportu

15、nities supporting at that time.Sydney 2000 There are more studies on 2000 Sydney Olympic Games which received reputation with the organization, volunteers, sportsmanship, and being praised in the international media by Australian public (Cool Running,2005). The effects of economy of the Games on Aus

16、tralia was estimated to be 18.03 billion dollars totally, of which 367.5 million dollars for profit. Blake (2005) concludes that overall the studies estimated employment gains to Australia of 156,198 jobs.Athens 2004In Athens, the total fiscal expenditure supported by government for the Olympics is

17、about 6.7 billion dollars (Ministry of National Economy, 2004). In general, the gross investment amount up to 10 billion dollars, including other investment that were not from government. However, the revenue of this Olympics is only about 1.9 billion dollars. It may take decades to make up the huge

18、 deficit. Moreover, there are extra 445000 job opportunities totally supporting in Greece.Beijing 2008According to the official report，2008 Beijing Olympic Games contributed 17.7 billion dollars for GDP. In terms of the employment, the increase of a large scale investment for Olympics stimulated the

19、 demand of labor market, with a growing of a huge number of job opportunities. From the governmental survey, it is confirmed that 1.82 million jobs were provided because of the Olympic factor from 2004 to 2008.These are the general situations of Olympic economic impact for recent hosting cities. The

20、n the mainly research will focus on how the 2012 London Olympic Games affect the local economy.2. The impact of 2012 London Olympic GamesThe UK is a country which is mainly focusing on financial industry and service industry, although the scale of economy is smaller than the United States, the finan

21、cial industry account for a large proportion of the national economy. In addition, London is one of the most significant financial center around the world, which plays an important role in global economy. Britain have faced serious debt crisis since 2008, and be listed as one of the most pessimistic

22、 economic country by the The Economist in 2012. Hosting such a big sports events become the rare opportunity to promote social and economic development. To relieve financial pressure, the British government has repeatedly called business leaders to discuss Olympic economic opportunities for the spon

23、sors. The British Business Minister Mark Prisk promoted the opportunities available to businesses from the Games and he said, "They are a global shop window, which we can use to showcase the very best that this country has to offer." This section will be divided into several parts to discu

24、ss the impact of the London Olympics specifically, which mainly includes overall situation of economy and some related industries.2.1 The total economic impactAccording to the official report, the total revenue of the London Olympic Games is about 8.138 billion pounds and the total investment is abo

25、ut 9.298 billion pounds that is higher than the revenue. However, in the next few years, the London Olympic Games will bring 16.5 billion pounds to the British economy, and create 62200 employment opportunities for the local people.revenueThe mainly revenue of the 2012 London Olympic Games comes fro

26、m three aspects that are ticket sales, Sponsors and sales of broadcast rights. First at all, Olympic ticketing programmes generated substantial revenue to support the staging of the Games. 2012 London Olympic Games provides a total of 8.5 million tickets to sale, and has sold 8.2 million tickets, wh

27、ich account for 97 percent. The ticketing revenue is the highest one than before, which is up to 0.376 billion pounds. Secondly, when it comes to the broadcast rights, which achieve a huge revenue of 1.912 billion pounds. The revenue of broadcast provides a stable financial foundation for Olympic ec

28、onomy.Finally, the revenue of sponsor is about 0.75 billion pounds that as an indispensable part of the finance of Olympics. Moreover，the income created by stimulus spending and indirect economic effect is about 5.1 billion pounds.investment In addition, when it comes to investment scale of Olympics

29、, London as the host city which has a great traffic facilities and communication system, using most of the funds to the construction of the new stadiums. Comparing with the cities that need to overall improve the urban infrastructures such as Barcelona, Seoul and Beijing, London needs less investmen

30、t. However, this part of the economic impact still can't be ignored, which caused greatly increased of direct investment.EmploymentThe British government announced in January 2009, between 2009 and 2012, there are more than 30000 new jobs would be increased. From the official report about the wo

31、rkers, the local residents occupied 24%, 58% of people are from London, and 9% of the workers were unemployed previously. The areas outside of London development agencies were also actively developing work opportunities about the Olympics. For example, East England government encourages the unemploy

32、ed to join the 2012 Olympics volunteers for culture and sports working, in order to gain the skills and experience. It is a beneficial way to help them find rewarding job in the future. At that time, there are extra 75000 job opportunities totally supporting in the UK for transportation and service

33、companies of London 2012 Olympics.2.2 The economic impact for related industriesThe Olympic Games is not only beneficial to increase the country's political, economic and social influence, and provides a large number of business opportunities and economic interests for the third industry. Especi

34、ally for the tertiary industry that related to the Olympic Games such as Cultural industry, tourist industry and construction industry, which can obtain huge benefits from the Olympic Games and promote the local economy.Construction industryHosting the Olympics needs many high quality venues, at the

35、 same time, the sports venues, transportation, communication, electricity and other infrastructure construction of the hosting city all need to reconstruct. In addition, improving the original residents living conditions, building enough hotels to offer the living of tourists. Therefore, the constru

36、ction industry benefits more than most of other industries, and greatly promotes the development of the real property industry, which is a beneficial way to accelerate the infrastructure development of the London.Cultural industryFirst of all, the London Olympic Games attracted a large number of for

37、eign capital and consumption for the development of cultural industry, which created the emergent cultural industries and promoted the development of related retail industries. Secondly, the Olympics promoted the rapid development of film and television media industries in London. Thirdly, it has pr

38、omoted the cultural industry of international communication. Finally, with the policy support and the economic operation, the ability of cultural consumption has been improved. Thus build a complete system of cultural market. Due to this a series of policy measures and activities related to the Olym

39、pics, the development of cultural industries has already showing results in London. According to the figures of International Olympic Committee, “In the years leading up to the Games, more than 14 million people participated in or attended cultural events across the UK. Nearly 170,000 people attende

40、d 8,300 cultural workshops on various art forms.”Tourism industry Olympic Games as a large cultural tourism brand, leading a large number of population flows, especially effectively promoted the increase of international tourists. Many foreign visitors came to London to watch the Olympic Games and v

41、isit local attractions, not only effectively enlarged the business activities of the travel company, but also provided many chances to the other industries such like entertainment, food, hotels and other industries. Moreover, during the 2012 London Olympic Games, overseas tourists had a high degree

42、on consumption than normal. The consumption mainly used in the accommodation, transportation, communication, food, watched the game and bought the souvenirs, which greatly increased the foreign currency earnings of London.ConclusionThe Success of the London 2012 Olympics made a major contribution to

43、 Britain's GDP. Most of the GDP contribution came from the building projects that occurred in front of the Olympic Games, including the construction of the Olympic Park and the development of many industries in Britain. Compared with economic benefit during the Olympics, the coming decade will create more economic benefits. According to government statistics, 2012 the London Olympic Games will make a substantial contribution to UK GDP of 16.5 billion pounds until 2017. In addition, because of the in