The Olympics Is About More Than Economic Growth

I don’t know about you, but I haven’t done much work in the past week. Although we could do with a boost to the U.K. economy after three straight quarters of contracting GDP, there’s no time for shopping when you have double trap shooting qualifiers on the agenda.

Takuya Matsunaga | Aflo | Getty Images

I did sink a hundred quid in as many seconds at the London 2012 Megastore in the Olympic Park last week, but it’s going to take more than that to get us out of this double-dip.

Undoubtedly, there are lots of visitors to the capital, and the Olympic ticket sales that were made in previous quarters will be booked this quarter. This will go a small way to help. Also, it’s impossible to deny that the redevelopment of Stratford in London is spectacular. And at the very least, the Olympics will provide a handy excuse for companies looking to blame someone else for a tough third quarter. The Jubilee was apparently to blame for practically every woe that befell the British Isles in the last quarter.

However, some take a longer-term view. Paul Donovan of UBS believes the Games serve as a shop window for the host country. By showcasing your ability to carry off a big event with efficient infrastructure, friendly locals and so on, you make the point to investors that you are open for business. The long-term effect of showcasing Britain to the world is hard to quantify, and stands at odds with the received wisdom that hosting an Olympics presages economic disaster (although Athens might disagree).

Brazilians will certainly be watching with great interest with an eye to their Olympics in 2016. Bhanu Baweja, global head of emerging market research at UBS, told me last week that he thinks Brazil will cope just fine under the spotlight, but added that this doesn’t change the underlying problems that are spooking investors.

The Brazilian central bank has lost its independence and people are worried about inflation, according to Baweja. Investors have fallen out of love with Brazil and hosting the Games is unlikely to help the world to rediscover the country.

Maybe I am too swept up in the Olympic spirit, but whether we see an Olympic boom or bust, I hope we don’t worry too much about the economic impact from this event. Great Britain is surely more than the sum of its latest economic data.

What an extraordinary year: Jubilee street parties and concerts; the Thames pageant; the Olympic torch relay; the nation embracing the Olympic Games; and the plethora of medals coming our way. All ages, ethnicities and classes have embraced these events, which has brought Britain together.

As I stood in my local park in Ealing last month, watching the Olympic cauldron being lit, with tears streaming down my face, it seemed hard to believe this was the same neighbourhood blighted by riots last summer.

A year on, we have our community back. And I’ll take a dip in productivity for that.