BEFORE THE OLYMPICS arrived there was lots pessimism, not only about how London and its aging transport network would cope; but also how the grand PR exercise would be executed. Let’s be honest, we all feared the worst when North Korea’s Olympic women’s football team initially refused to play the game against Colombia, after South Korea’s flag was mistakenly displayed on a screen next to the players’ pictures. Quite possibly one of the biggest mistakes the organisers could make given the history between the two countries.
However, the opening ceremony followed and all was forgotten, as Britain showed what it was really capable of and apart from the odd further hiccup it was plain sailing. A golden haul of 65 medals followed, giving Team GB its greatest ever standing.
The question now remains; has the greatest show on earth been the greatest PR exercise? There is no doubt that the feel good factor was here in the UK, but has the £11bn been well spent as a long-term investment?
Cameron has been urging world leaders to buy British, but has it done the trick?
It is hard to quantify whether we will see an increase in sales of British products; but what many people don’t know is that our manufacturing sector already generates approximately £140bn in gross value a year and back in 2008 the UK was the sixth-largest manufacturer in the world measured by value of output.
Focusing on the sectors that the UK specialises in (automotive manufacturing, aerospace and pharmaceuticals) it is hard to see the Olympic spend attracting additional investment.
There are however, several other economic benefits that could result from London 2012. As a PR exercise it can only help with some of the misconceptions about the infrastructure within the nation. Heathrow and Gatwick didn’t melt down; London’s public transport system was working efficiently and the overwhelming support from the volunteers showed that not only is Britain open for business but we can do business well. This is not a guarantee to gain investment, but surely it cannot do any harm.
A knock on effect that may help generate further investment, is the benefit to the domestic economy. The feel good factor and the additional income from the Olympics and Paralympics could be the kick start the stalling economy needs, and help to drag the UK out of recession. Combine this with the good publicity the Games have received, and the UK all of a sudden looks a far more attractive prospect to invest in.
Some corners are arguing that too much money was poured into something that won’t amount to much. Surely it is far too early to be making these assumptions, as only time can tell. The true economic benefit of the Olympics will be a slow-burner, the publicity received could potentially help British business for years to come. Was London hosting the Olympics a white elephant? Was the spend worth it? The legacy will live on in memory, so no – of course it wasn’t.
Jamie Jemmeson is a trader at Global Reach Partners
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