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A beginners guide to the social impacts of the Olympics

Taken from http://www.gamesmonitor.org.uk/node/333

The Olympics project is large and complex. It is not easy to quickly grasp the nature of its probable impacts on the Lower Lea Valley and London. Here is a collection of four useful papers which together give a relatively short description of some of the significant impacts.

Martin Slavin

1

The social impacts of major events

Around the world urban areas (sometimes nations) are using big events to try to regenerate and promote particular places. It sometimes seems that there is scarcely a city that is not claiming loudly that it is hosting,about to host or just bidding for the event that will make the eyes of the world shine upon it, the feet of the world itch to visit it and the cash of the world pour forth to rejuvenate it. (H. F. Moorhouse 1991: 822)

Events present special challenges for social impact assessment (SIA). The larger events typically have wide ranging impacts over space and time. Procedures for their assessment tend to be ad hoc or even vague and uncertain. Rarely are the events themselves captured in legislated environmental impact assessment (EIA) provisions. Institutional responsibilities are sometimes unclear, multiple and even contested. Some impacts associated with hallmark events are both difficult to analyse as well as to mitigate.

Many of the impacts of hallmark events are cumulative impacts which present added problems for the impact assessment of large events. Especially for events with long lead times, such as Olympic Games, the nature and dimensions of the event may change significantly over time, further complicating effective impact assessment and management.

This paper will firstly define the term hallmark event and capture some of the dimensions that impact assessment must address. The motivations behind staging events-showing off the city-will be examined, with examples drawn from recent events. Events have impacts and often negative ones. These impacts frequently show up the city rather than show it off.

Some of the common and not so common impacts of events will be briefly discussed. Finally, the social impact assessment of the Sydney 2000 Olympic Games will be analysed and some critical lessons for the assessment of similar large scale events will be highlighted.

Extract from: The Social Impact of Major Events, Gary Cox, Social Impact Assessment Newsletter 40, August 1996

See ‘Showing Off or Showing up the City’ page 5 of PDF downloadable from: SIAN 40

Or ‘Showing Off or Showing up the City’ p5 at SIAN40 link

2

From: The role of Mega events in urban competitiveness and its consequences on people. Carolina del Olmo, Universidad Complutense,Sept 2004

….if we were to study the strategy that consists in organizing large scale events of any kind in order to revitalize a city that before was destroyed by a mix of deindustrialization, unemployment and social service cuts, Spain would be a great example.

In Barcelona, the Forum de las Culturas is about to conclude as I write this essay. Valencia is working to host the 32nd edition of the America’s Cup yacht race. And Madrid is striving to be the host city for the 2012 Olympic Games (along with Paris). Even if they last only a few weeks, these events require years of preparation, take up a huge amount of public funds and permanently change the physical landscape of the city.

But Spain is not alone in supporting this ideology. If we take a look at the figures, we will notice that the competition for hosting an Olympic event becomes more difficult every year since the economic success of the 1984 Los Angeles games (a success largely due to the growth of worldwide communications).

The same rivalry prevails in the fight for hosting a World Fair or any other large scale event. How can we explain this mega-event obsession? First of all, we must realize that this kind of competition is nothing more than the most conspicuous form of global competitiveness. This competition between cities and regions is a consequence of the political and economical changes that have occurred in approximately the last thirty years.

To summarize these changes, we can make use of a common term and discuss a transition from a Fordist regime of accumulation to a post-Fordist regime of increased flexibility. The growing geographical dispersion of production and a financial capital boom have played an essential role in allowing this transition to take place, a transition that, in turn, has had important consequences on capitalistic cities.

Towns are experiencing a prolonged crisis related to the loss of traditional industries, the growing importance of tertiary sectors, and the increase of unemployment and poverty. They have begun to compete against each other in a fierce fight for attracting investments from the private sector or from different levels of government.

They also strive to obtain money by promoting a culture of consumption, in search of some kind of compensation for the loss of steady jobs. The urban governments have taken the initiative in what has been called the “rise of an entrepreneurial city”, encouraging a good business climate and taking measures to attract economic growth. Measures that, in turn, intensify flexibility and insecurity.

As was to be expected, the investments aimed to convert a city into a dynamic and competitive enterprise presume the use of scarce public resources in favour of firms and high level consumers at the expense of disadvantaged classes, specially in a fiscal austerity frame like the one we have had in the last years.

As well as the deregulation of the labour market and the gifts (fiscal exemptions and all kind of incentives) that urban governments offer to firms to lure them to their cities, other efforts aimed to construct a competitive position for the city have primarily been concentrated in the field of urban environment transformation. The city, with the help of post-modern architecture, on the one hand becomes a spectacle in order to make it an attractive space for tourism and consumer spending.

On the other hand, the city devotes itself to the construction of infrastructures of whatever kind that are highly valuable for corporations and quality customers, as convention centres, business areas, highways, airports and so on. In this frame of competitiveness and in this process of converting a city into a spectacle is where we must set the recent obsession with mega-events.

This obsession is perfectly illustrated with Barcelona since they have hosted the 1992 Olympic Games. Since then, it has hosted the Forum this summer and, in between, has organised a myriad of minor tourism-based events.

Now, let’s focus on the so-called advantages of these kind of events. Besides being able to heal the citizen’s psychological discomfort, as we previously noted, politicians constantly brag about two other virtues of mega-events:

  1. they are believed to be the perfect occasion for the city to fulfil its longstanding general need for infrastructure and installations.
  2. they can stimulate the economy and generate employment

. This last claim reads as follows: the mega-event turns the city into a global focus of attention, providing a top-quality kind of marketing and advertising that contributes to sell the city’s image all over the world; as a result, the city will capture a huge amount of tourists and will also attract a lot of corporate headquarters and new events, with the resulting growth of economic activity in the long run and the creation of new jobs.

More at: Carolina del Olmo

3

Upon Further Review: An Examination of Sporting Event Economic Impact Studies,Victor A. Matheson, 2001

Introduction

As pointed out by Soonhwan Lee (2001) in a recent issue of The Sports Journal, there exists a great deal of debate about the validity of economic impact studies on sporting events. Economists widely believe that league and event-sponsored studies exaggerate the economic impact of professional franchises and large sporting events on local communities.

These overstatements are a result of several factors.

First, the studies often ignore the substitution effect. To the extent that attendees at a sporting event spend their money on that event instead of on other activities in the local economy, the sporting event simply results in a reallocation of expenditures in the economy rather than a real net increase in economic activity.

Next, studies usually ignore the crowding out effect. Many large sporting events are staged in communities that are already popular tourist destinations. If hotels and restaurants in the host city normally tend to be at or near capacity throughout the time period during which the competition takes place, the contest may simply supplant rather than supplement the regular tourist economy.

Third, the studies may fail to address whether the money spent at a sporting event stays in the local economy. Much of the money spent by out-of-town visitors goes towards hotel rooms, rental cars, and restaurants. To the extent that these firms are national chains, profits earned during the event at these businesses do not increase the welfare of citizens in the local economy but rather accrue to stockholders around the country. Similarly, revenue from ticket sales is often paid to the league or the sport’s ruling body instead of local organizers.

Fourth, non-economic costs such as traffic congestion, vandalism, environmental degradation, disruption of residents’ lifestyle, and so on are rarely reported (Lee, 2001).

Finally, since economic impact studies are often used by sports boosters to justify public expenditures on sports infrastructure, ultimately, the real question faced by any observer is whether an analysis conducted by agents with a vested interest in the outcome of the study can ever be considered an objective examination of the true economic impact of an event.

Victor A. Matheson, Assistant Professor, Department of Economics and Business, Lake Forest College, Lake Forest, IL, USA

For full text see: ‘Review of Impact Studies of Sport Events’ pdf attached below

4

London’s Olympic Myths, Kevin Blowe, November 2004

After the disaster of the Millennium Dome, the delays and spiralling costs of the new Wembley Stadium and the abandoned plans to stage the 2005 World Athletics Championships at Picketts Lock in Enfield, you would expect us all to be sceptical of the government’s competence in handling international events or large-scale ‘regeneration’ projects.

But organisers of the bid to stage the Olympic Games in London in 2012, including the government, London Mayor Ken Livingstone and London business leaders, have apparently pulled off a remarkable achievement – convincing around sixty percent of Londoners in a recent poll that there are nothing but benefits to hosting the Games in the capital. They have done so largely by portraying the two-week sporting event itself as incidental to the ‘positive’ social, economic and environment impact on east London.

As a result, anyone raising concerns about the astronomical £2.375 billion [now 9.3 billion pounds] that will have to be spent between 2005 and 2012 is likely to be written off as ‘opposing much needed regeneration’ of a socially deprived area’. This has been a very effective strategy in closing down public debate about the implications of hosting the Olympics and the misleading claims of the bid’s supporters.

However, if London is chosen as host in July 2005, a multi-million pound Olympic industry will have already gathered momentum and it will be too late for public scrutiny to have the effect it can have in the first six months of 2005.

From managerialism to entrepreneurialism: The transformation in urban governance in late capitalism by David Harvey, 1989, is an excellent analysis of how the international mobility of capital stimulates competitive ‘place marketing’ among cities.

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