With the 2012 London Olympics right around the corner, everyone around the globe is gawking in anticipation of what might possibly be the most awaited event of the year. London will be at the centre of the sporting universe on Friday. But as we might all suspect, the country has been wrestling with the tides to get this event underway. UK has an outlay of a staggering £9.3bn est. Just want to point out: Bill Gates could provide the funding for the whole extravaganza right out of his pocket. Err… Sounds pretty daunting but the guy is filthy rich. Humor aside, could the income from the Games possibly make the weight of the cost unfelt?
The Dept. of Trade and Industry [UKTI] speculated that the Games could reap a £13bn profit. Remember though that its just a plausible figure for the amount of business that could be generated. There are no guarantees, whatsoever. Along with the increasing air traffic that will be making its way into Heathrow during the Olympic tourism frenzy, there will also be a ‘Trade and Investment’ conference that is going to be held as Lancaster House in Central London. The conference houses some of the most prominent economic and business leaders of the world to discuss the forecast of what is to become of the Games. Mr. Cable, one of the members of the conference, was asked if there was a possible profit to be made. His response:
“We do believe we can turn the Olympics into not just a great sporting spectacle, which it will be, but also into a great opportunity for the UK from a business and economic point of view.”
The hopes of a prospective turnout is poised on the foundation and insights that the people at Lancaster House can come up with. There is said to be about 4000 business leaders, from Google to European Central Bank heads, meeting up there, actively taking part in many meetings to achieve a suitable business blueprint.
Possible avenues the UKTI is contemplating which could possibly get the money rolling in:
- £6bn could come from direct investment into UK projects and development by overseas companies. One possible overseas development is the £8bn Battersea Power Station which could creat 33,000 jobs.
- Hopes for its “Great” advertising campaign led by Oscar-winning actress Dame Judi Dench and Slumdog Millionaire star Dev Patel. Projected tourism increase by 4 million and revenue build up of £2.8bn. Quite a number for a campaign led by two people.
- Special business summit for the UK’s third biggest overseas investor: China. Ministers forecast these events should generate £1bn in extra sales by UK firms.
The events above would take 10 years to fully take hold and culminate into a hefty sum. Over time this should create a fledgling of jobs for the economy. Always a bright sign, with the dearth of jobs flanking almost every economy, especially the economy of the US. An extrapolated 52,741 jobs are expected to be available.
However as all the above unfolds, ironically, the country’s economic output shrank 0.7% in the second quarter of the year. This is not due to the Olympics, but rather it is brought about by the capping woes of the economy’s plight that veils the entire nation. UK is stumbling. The austerity program has bought the axe down on the public. The public are highly concerned about the Continent’s dire economic state. UK has been facing economic constraints and secular declines for the past two years now.
“It is the third quarter in a row that gross domestic product has shrunk and the largest quarterly contraction since early 2009.” – The Wall Street Journal
So with all this taking place in the background, I hardly believe that Olympics will make a big difference. No matter how much profit is generated. Right now the £9bn outlay is itself, a disheartening figure. The profit, I suspect, would only be a marginal step in a staircase of difficulties that has to be, by all means, overcome.
Take a look at the Games…..