An Olympic is an international sporting event that features winter and summer sports competitions in which thousands of athletes compete in various games.
The Economic and Cultural Benefits of Olympics
Impacts of Olympic Games to the economy of the host country
Olympics games act as a source of revenue that is significant for economic growth and development for a country. They have a positive impact on the exports and development of industrialization for the host nation, and hence its reputation increases. For instance, the 1988 Olympics held in Seoul enhance industrialization of the Korean economy. It pushed Korea to be a newly industrialized country from the developing country. Furthermore, the games stimulated $7 billion of production as well as $2.7 billion of national income from 1981 to 1988. The games not only resulted to $300 million of profits, but it also triggered constructional development in the country. However, the games also contributed $127 million to the GDP from manufacturing sector. The contribution to GDP was 33%, 35% and 20% from construction, manufacturing, and service sector respectively. Additionally, the Olympic Games resulted to job creation for 336,000 workers. This was an increase in employment by 153,000 from the service sector; while those from manufacturing and construction were 54,000 and 94,000 workers respectively.
Reasons why Cities are interested in hosting Olympics
Cities are interested in hosting the event because the voters who bid for the games pay the expenses. The increase in the number of bidding cities to host the games and the rising funds invested, in form of Olympic bids; show that local leaders believe securing such kind of games give them a chance to improve their economic and the social aspects of the region or city through the investment accumulated prompted by the Games staging.
The riskiness of Olympics as an investment
This is the right time to consider the impacts of Olympic Games to investors because of the upcoming Winter Olympics-2014 in Sochi, Russia and also Summer Olympics-2016 in Brazil. In order to prepare for the upcoming events, Russia and Brazil are using billions of money to modernize the infrastructure, promote tourism, increase commerce and build stadiums. Such an activity, to a casual observer, seems to promote economic and investment growth. However, the opposite is suggested from the history: after the Olympic Games, the host country is usually left with massive debt and budget overruns, and there is no investment strategies driven by event have ever succeeded. Therefore, it is a risky investment to cities because huge costs are incurred in hosting the event, and; on the other hand, the benefits received are few.
The effects of hosting Olympic Games on a country’s reputation
Olympics bring about glory and prestige to the country hosting the event. Besides the simple associations of image displayed through media coverage, Olympics can engender images concentration about the country hosting the event. Apart from the featured individual events, a lot of attention is paid on the extra-sports and extra- Olympics aspects. Therefore, Olympics, which have appeared to be one of the international cultural events, provide a way that the host country can promote its image globally. Even though there are variations in the content regarding the hosting country in global media coverage, the Games create opportunities as well as the challenges for the hosting countries to consider their image-building strategies in a global perspective. Finally, the hosting countries also utilize the Olympics in showcasing their technology, people’s positive attributes, economy, and political stability.