The Social and Cultural Impacts of Hosting the Olympic Games

Categories: Diversity & Inclusion, Global Mindset

The prestigious Olympic Games represent unity, pride, elite athleticism, and peace around the globe. They bring together the world’s leading athletes, and hundreds of millions of spectators watch in awe as they represent their home countries and compete for the ultimate glory of bringing home a medal. Much more than a series of sports competitions, the Olympic Games are a highly-anticipated global event that thousands of experts and journalists scrutinize and analyze as they take place.

Over the years, improved means of transportation and the reach of mass media rendered the Olympic Games accessible to people all over the world. The extreme magnitude of the Games has made them much more than the greatest event in sports competition — they are a tool for economic development, cultural integration, and social regeneration. The Games have evolved over time, and the social, economic, and cultural impacts of the Olympics are reaching far beyond the lifespan of four weeks. The Games represent big business. Revenue is generated through TV broadcasting, worldwide marketing, sponsorship, ticketing, hospitality, and much more.

The idea that hosting the Olympics will stimulate economic growth is relatively new. The Games have increased in global importance over the years. Smaller cities could once make a name for themselves, catching the eye of global business leaders, and larger cities could reinvent themselves. Until recently, the Olympiad was a highly desired entity, as lucrative television deals have changed the landscape of the games.

The International Olympic Committee (IOC) once courted cities, but then cities began to court the commission in order to host the games in a complex bidding process. Although hosting the games comes with a certain amount of risk — after all, spending exorbitantly on a short-lived event is a questionable long-term strategy — the possible cultural and economic showcase often seems to outweigh any financial risk involved. Legacy building appears to supersede profitmaking in many scenarios.

More recently, however, the IOC has struggled to find candidates to host the games. For example, Poland, Ukraine, and Sweden originally bid to host the Winter 2022 Games but canceled, citing either lack of local support to host the games or the high costs involved. It’s predicted that the Games will downsize after the Summer Olympics in Rio de Janeiro.

Hosting the Olympic Games comes with a gigantic price tag for infrastructure, security, and more — and it is not guaranteed that hosting the Games will come with a profit. Scholars continue to refine their theories on how to analyze the benefits before, during, and after the games. Many politicians are quick to point out the economic benefits that will flow to the city, but the economic impact is difficult to measure concerning the Olympic Games.

The impact can last for a long period after the Games, and those impacts can be observed in many different indirect forms. There are many intangible considerations to make as well, such as a stronger city brand and an improved volunteer base.

Benefits of Hosting the Olympic Games

Economic growth, infrastructure legacies, and image promotion are among the top benefits of hosting the Games. Infrastructure developments can lead to technological progress and better productivity for the host city and the country’s economy. The construction sector builds sporting venues and accommodations for the participants, officials, and spectators. It also affects the economy, as more jobs are created. For example, the 1992 Olympic Games in Barcelona produced 88.7 percent of the city’s decrease in unemployment. After the Games that year, the unemployment rate rose by 21,000 persons.

By taking a closer look at specific examples in history, it’s clear that analyzing the benefits that come with hosting the Games is highly complex. There are many analyses conducted before the Games, but not as many post-Game analyses with which to compare them. We can deduce, however, that there are definite benefits that come with hosting the Olympic Games.

Examining case studies of specific Games proves that it’s not always simple to gauge their success.

Case Study: Los Angeles Summer Olympic Games in 1984

Although this is an older case study for analyzing the positive impact of the Olympic Games, we can learn a great deal from the LA Games of 1984. After all, it’s often considered the most successful Olympic Games in history, although political tensions were high during this period. Sixty-five countries boycotted the previous Games in Moscow in 1980 after the Soviet invasion of Afghanistan in December of 1979. Social unrest led to boycotts of the 1984 Games in LA, as well.

LA had hopes of reinventing its image from a murky, dim metropolis lacking in civic pride. Local businessman Peter Ueberroth who led the planning created a committee of entrepreneurs and top business leaders. The committee decided that corporate sponsorships, private fundraising, and television deals would fund the games, and it sold the rights to the broadcast to ABC for USD $225 million.

After deciding that a certain city will host an Olympic Games, there’s often a massive construction undertaking, where new stadiums and buildings arise to accommodate the influx of tourists and spectators. LA decided against building any new structures, instead opting to modify existing structures for the Games. The only new buildings created were financed by corporate sponsors, and some events were held a hundred miles or more apart.

To brand the 1984 LA Games, designers borrowed textures and patterns from Pacific Rim countries, as well as shapes and colors from Indonesian, Japanese, and Mexican cultures. Contrary to the traditional American red, white, and blue, LA used a bold magenta as its signature color, along with bright red, yellow, aqua and purple, creating a definite international air.

The LA Games were the first to be a globalized television event, so the designers focused on elements that would translate well to the small screen. The event was highly profitable, and the planning committee returned 60 percent of its profit to the U.S. Olympic Committee, leaving $93 million for the region.

Takeaways from the LA 1984 Games: There’s a direct connection between fiscal responsibility and economic event success. Likewise, the strategic decision not to build any new infrastructure proved wise. Global audiences watching the well-branded events unfold on television gained a vivid picture of LA, uniting people from around the world. The branding was successful, even though the events of the Games spanned hundreds of miles around the city.

Case Study: Sydney Summer Olympic Games in 2000

Widely regarded as exemplary, the 2000 Summer Olympic Games in Sydney left a lasting impression on the world. They were meticulously planned and expertly delivered. Transportation around the city flowed seamlessly during the events, even though it was anticipated to be a problem before the Games.

The torch relay united Australians, as it involved 11,000 runners, 750 towns and 27,000 km through the country. The event spread from Sydney to the rest of the nation, making it more than a national media event. The Sydney Games were an economic and social success for many reasons, including the following:

  • 47,000 people volunteered. There are obvious economic benefits that come with volunteerism, but the sheer number of volunteers at the Sydney Olympic Games left a significant impact on Australian society as a whole. Volunteers saved the Sydney Organising Committee for the Olympic Games (SOCOG) $140 million, while also creating successful post-Games volunteerism throughout the country.
  • Trade surplus increased. The trade balance increased from a $1.3 billion deficit in August to a $677 million surplus in September.
  • Sydney gained more worldwide attention. The internet brought more attention to the country prior to and during the Games. Specifically, traffic to the website increased 700 percent during the games when compared to September statistics from the previous year.
  • Sydney gained the ability to host large future sporting events. Due to the infrastructure created — such as the Olympic stadium, the Superdome, the Tennis Centre, the Olympic Park Aquatic Centre, and the International Regatta Centre — Sydney is now able to host world-class events like the 2003 Rugby World Cup.
  • New suburbs were created. Sydney Olympic Park and Newington — which was the athletes’ village during the Games — are two of the world’s largest solar-powered suburbs.
  • Environmental benefits resulted. The Games established Australia’s first urban water recycling system, and it also produced the nation’s biggest metropolitan parkland. There are 430 hectares of woodlands, wetlands and remediated lands, as well as a network of more than 40 kilometers of pedestrian and cycle paths.

At first glance, it seems the Games were wholly positive. Some analysts say the Games had a sizeable negative effect on the economy, and that international visits decreased afterward. Regardless, there is little argument that the Games had a positive impact on the Australia psyche.

Takeaways from the Sydney 2000 Games: Post-Game planning is essential to the overall success of hosting an Olympiad. Instead of creating infrastructure specifically for the Games, with no plans for them afterward, it’s vital to consider their use after the influx of visitors leaves the city. Sydney successfully planned for post-Games use of its facilities that were created especially for the game, and the city is now well-prepared to host other world-class sporting events and entertainment.

Case Study: London Summer Olympic Games in 2012

Over two hundred countries competed in the 2012 Olympic Games in London, and a ticket to the opening ceremony cost USD $3,139 (£2,385). The city paid USD $758M in construction costs and earned USD $2,569M in broadcast revenue. Twenty million people visited the city and $14 billion was generated. Four billion people watched the opening ceremonies on television.

The city aspired to use the Games to help reconnect communities across the UK, drive social change, and foster a new culture of volunteer work. In addition to the economic benefits, there were many positive social impacts of the London 2012 Olympics:

  • Increase in volunteerism. London named volunteers for the Olympic Games “Games Makers,” which helped to bring together 700,000 volunteers. Many efforts continue to draw upon the momentum achieved at the Games, and both formal and informal volunteerism has increased as a result. Volunteerism had previously been on a steady decline since 2005. Noteworthy government support for volunteer work post-Games has helped to maintain this energy.
  • Inspiration in sustainable living. Sustainability was a commitment during the London Games and was therefore built into its overall design. Projects ran through 2013 that encouraged further commitment to sustainable living, and the Department for Environment, Food and Rural Affairs updated its Sustainable Events Guide for the public sector by adding lessons from the 2012 Games in London.
  • Creation of the Spirit of 2012 Trust. The Game’s Big Lottery Fund used its share of funds — £30 to £40 million — from the sale of the Athletes’ Village to create a UK-wide trust known as the Spirit of 2012 Trust. Its goal is to secure a lasting benefit from the 2012 Summer Olympic Games in London.
  • Causes of disability inequality were addressed. Over 81% of people surveyed throughout the Games thought that they had a positive effect on how British people view people with disabilities. Funding was increased between the years leading up to the next Paralympics in Brazil. Causes of disability inequality were addressed during and after the games, provoking further changes to the city’s transportation systems.

Takeaways from the London 2012 Olympics: London is an excellent example of a well-planned Olympiad, both before and after the Games took place. Every hosting city puts forth effort well in advance of the Games, but many fall short afterward, leaving infrastructure abandoned and witnessing a drastic fall in spirit following the peak of the Games. London proved to the world that there’s a great benefit in continuing to put effort into strategies post-Games. Momentum can continue to build — especially on social and cultural levels — long after the Games leave the host city.

Beyond the Case Studies: Considering Opportunity Costs

A main criticism of the Olympic Games is that the hosting city is now more commonly awarded to developing nations, which places a significant financial and logistical burden on the economy. The 2016 Summer Olympics in Rio de Janeiro, for example, come with concerns resulting from political and social unrest, water pollution, the Zika virus outbreak, and a troubled economy. Many questions whether or not the already struggling city will be able to seamlessly host a safe Olympiad, or how the event will impact the city after the Games.

On the surface, it’s easy to see the advantages of hosting the Olympic Games, but it’s also wise to consider likely outcomes if the games had not occurred in that city. For example, there’s often a loss of valuable real estate in some of the world’s most expensive cities. Some infrastructure sits vacant after the games, such as those in Athens. After the 2004 Summer Games, many of the city’s two dozen venues created for the games were abandoned or rarely used, now often referred to as “white elephants” in the sports world. Chain-link fences surround some of the deserted, graffiti-covered structures, representing billions of dollars wasted.

It’s also misleading to use the amount of revenue generated during an Olympiad to calculate the profits. A more accurate figure to judge the event’s economic success would compare the amount generated to the projected amount generated in the same city without the Games occurring. Other forms of tourism that generate profits come to a halt during an Olympiad. For example, during the 2012 Games in London, the British Museum saw 137,000 fewer visitors, and Britain saw a 5 percent decrease in foreign visitors in August of 2012 when compared to the same month a year earlier. There’s also a decrease in productivity in other industries, as many locals take vacations to escape the crowds that inevitably come with the Games.

Disadvantages of Hosting the Olympic Games

Proper post-Games planning is crucial to the overall success of the Games on the hosting city. After examining a few of the least successful Games in history, this becomes more evident:

  • Beijing Olympic Games in 2008. China spent $42 billion on the 2008 Olympic Games, and many experts say the Games had a negative impact on the country’s political life. Sun Liping, a Professor of Sociology at Tsinghia University said the Olympics were the start of the climb of the stability preservation regime in China. Leadership approached the Games with a very cautious attitude, and “it was against this backdrop that the failure of power became more and more severe.” Furthermore, most of the infrastructure created for the Games are now empty and, therefore, not bringing in a profit. An outcry over human rights also resulted from the 2008 Games, as 5 million Beijing residents were evicted from their homes to create space for Olympic infrastructures.
  • Montreal Olympic Games in 1976. A great deal of construction was needed before the Games in Montreal in 1976, and much of it wasn’t completed in time. A shortfall of about $1.2 billion was estimated, “severely crippling the city’s financial viability” for three decades.
  • Athens Olympic Games in 2004. The Games this year went over budget by $5 billion, which doesn’t include the cost of building the necessary structures. The country also failed to use the infrastructure as planned after the Games, and overall tourism has declined in the intervening years. The country hit a massive recession in 2014, and many experts note the 2004 Games as the starting point for the decline, as they exemplified Greece’s existing structural problems.

It’s important to remember that many factors should be considered when determining the overall success of an Olympiad, and many of them go beyond the economic benefits and use of infrastructure post-Games. Beyond the surface of economic losses or gains — which are also deeply complex to analyze — it’s wise to consider the following retrospective questions to gauge the success of the Games:

  • Did the staging and branding of the Games leave a positive impression of the hosting city?
  • Did overall global business ventures increase after the Games?
  • Were programs created to continue volunteer efforts post-Games?
  • What cultural benefits came as a result of the Games?
  • How did the Games encourage community within the hosting country?
  • What transport improvements were made because of the Games?
  • What lasting and memorable infrastructure was created for the Games?
  • Did any political movements emerge from the Games?
  • Were any social issues addressed during the Games?
  • Did the Games encourage sustainability or positively address environmental concerns?
  • How fair was the process for assigning construction projects to bidders?

It’s possible to glean some positives from Olympiads that many experts consider the least successful in history. For example, the 2008 Beijing Games athletes broke records and the venues sparkled. The city sold over 95% of tickets to the Games, and it’s remembered as a national project for many Chinese citizens. As for the 1976 Games in Montreal, although deemed by many experts as a poorly managed financial project, many people still commend the staging of the Games, and the legacy still encourages hundreds of Canadian athletes.

Known as the father of the modern Olympic Games, Pierre de Coubertin strived to create Games that would create peace through international contact. The Olympic Games today are magical in many ways, as they bring together people from around the globe in a peaceful display of competition, elite athleticism, and worldwide tradition. As any leader knows, however, success can be measured in many ways.

The Olympic Games are a deeply complex cultural institution, rooted in tradition but meeting higher expectations every four years. The hosting cities take on a colossal task, but the benefits — regardless of how they are measured — are plenty. The Games represent excellence and pushing our body’s limits, but they also represent our collective appreciation for peace and unity as human beings.

The Upcoming 2016 Olympics in Rio de Janeiro

The IOC claims that Rio de Janeiro was ready to host the Summer Olympic Games, having addressed and overcome numerous setbacks. Police in the city protested in June over pay and safety, but a security force of 85,000 individuals supported the event’s venues and infrastructures.

The World Health Organization (WHO) released a statement declaring that changing the location prior to the 2016 Summer Olympics “would not significantly alter the international spread of Zika virus.” The statement also provided actionable advice to avoid Zika for anyone who was planning to travel to the 2016 Games.

New pipes were installed to address water-quality issues at the Guanabara Bay sailing venue, which included high levels of viruses and bacteria. Since their installation, the IOC says tests reveal much-improved levels. The IOC also eased concerns about unfinished venues, reassuring the public that everything was ready for the August games.

As the 2016 games came and went, it’s important to remember that the Olympiad is steeped in tradition but it’s also an evolving entity. Some experts predict a significant downsizing after the 2016 Summer Games, and the IOC and hosting countries will certainly continue to make improvements and strategically plan for future successful Olympiads.

The Lasting Impact of the Olympic Games

The Olympics are an event like no other. People from around the world unite, and an abounding sense of national pride is evoked from athletes and spectators alike. When hundreds of thousands of people from different cultures come together for any event — whether it’s for business or entertainment — it’s important to leverage cultural diversity, communicate seamlessly and successfully across cultural boundaries with the appropriate infrastructures in place.

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