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Top: Most construction for the Games (as opposed to investment in infrastructure) is a necessary expense with little return. The IBC could be the exception to the rule. Middle: Holger Preuss with James Graham and Bob Lentell in Beiing. Bottom: The Olympic Green in Beijing The first is that the Games are used by politicians and stakeholders to create the momentum for major infrastructure projects. In our case it might be Crossrail or the DLR extension and expansion, for example. In Athens it was the Airport. In Beijing it was the Airport, the ring-road, underground lines and major environmental projects. Pressure from the population to host the Games, a lack of knowledge about what precisely is required by government, pressure from Organising committees and local stakeholders all add to the upward pressure on costs. Holger made the point that this infrastructure spend is not in the same category as the three to five billion Euros that are in effect, buying the one off ability to host the Games. These infrastructure investments have a much longer depreciation and are often where real benefit is derived from hosting the Games by boosting the infrastructure development of the city by ten years. Holger then looked in more detail at the drivers of genuine legacy from the Games. He noted that the injection of money from tourism and visitors to the Games leaves no noticeable impact two years post Games. In Germany it was estimated that the World Cup boosted the German gross domestic product by just 0.13%. The Games-time new money leaves no impact. The real benefit comes from: • Change of location factors • Signaling effect Change of location factors are these: Changing the image of the host city and nation. Holger noted that whilst London is a well known global city, that well known global brands have to continue to promote themselves in a highly competitive environment. [2] Paradoxically it is only the additional infrastructure spend that secures a positive legacy Changing emotions: pride and a feel good factor for people looking to live or work in the host city. Increasing know-how: not just in terms of how to stage a major event, but the knowledge gained by thousands of volunteers, specialist knowledge in areas such as security (for example Athens worked alongside the FBI and renewed their security infrastructure). Developing networks: The Games will attract world leaders into a nonpolitical environment. Business leaders can use the Games to broaden and deepen their networks in a conducive atmosphere. Sydney businesses built relationships they are still exploiting today. Culture and sport: The Games bring massive exposure of the host culture and renew and deepens appreciation of the cultural offer. Tourism boost in Barcelona was not because people wanted to wander through the old Olympic Park, but because people had a new view of Barcelona as a cultural destination with a beach. Barcelona spent money developing galleries and other cultural assets and it was these that now attract tourists and repeat visits. Infrastructure: The visible infrastructural changes, not only sport but also DLR, stations, parks, … Both Barcelona and Athens invested heavily in these location factors. This brought Holger to the nub of the dilemma. These infrastructure and location factors drive up costs of Olympic projects, and yet they are the investments that long term drive legacy benefit. The Games are a catalyst and an excuse that can justify this additional spend.
The implication of this seemed to be that strategically planned infrastructure spend, whilst increasing the headline budget, is key to capturing benefit to a host city. A strategy could be developed around this legacy benefit by: Close analysis of the likely knowhow expertise and how to demonstrate that London leads in the given field. Post the gigantism of Beijing London could be seen perhaps as the environmental sustainability world leader. Consideration of the image projected by the Games. The experience of visitors to the Games, particularly in We have been suggesting that one of the subliminal messages from the 2012 Games is that London is reinventing itself as the city for a new generation terms of their welcome and experience of the culture of London is key. Emotions: What will it take to have Londoner’s feel proud of London, and what will be the emotional draw on visitors? Networks: How can London pick up new, deeper political, business and other networks? What location factors will help refresh and deepen London’s offer as a destination for tourism, business visitors and conferences, events and fairs? (It is worth remembering that in Paul Donovan’s original economic impact report for London Legacy 2020 he stressed the potential particularly for business volunteers.) Holger made the point that Games and the way they are staged has signaling effects. That is to say they carry subliminal signals about the host city. The Chinese could have built a budget stadium. By building the Bird’s Nest, they sent messages to their own population and to the world at all sorts of levels. Whatever London does will also send messages, and we would do well to orchestrate these. Holger returned to the factors that drive up costs, noting unplanned factors: • The need to be more state of the art than the last host City. • Strikes, spikes in prices as the deadline looms • Forgotten infrastructure that is suddenly thought of late on • Stakeholders adding projects •Currency fluctuations, particularly around debt Turning to the current economic downturn, Holger suggested that this might work in favour of London, depressing construction costs. He noted too that infrastructure spend in a downturn for a government is cheaper than in a boom, and so concentrating ten years spend into an Olympic burst of energy makes financial sense when viewed in the medium term. He also noted that in terms of the know-how legacy, London could benefit from Athens being perceived as poor, and Beijing perceived as hard to deal with. London expertise gained for 2012 could be current for winter and summer Olympics in 2014, 2016 and 2018 as a consequence. In questions following his presentation, the point was made that 80% of tourists into the UK came from just 30 nations. Holger reported that Sydney had spent some ten million Australian Dollars on a marketing strategy that included preparing stories for visiting journalists. Holger noted the difficulty of measuring the value of changed image of a nation and the “front of mind” factor that might influence purchasing decisions, but note an example of the success post Sydney of Australian architects winning contracts. For more: Peter Welton. 0207 068 6960. peter.welton@legacy2020.org [3] Implications for ELBA Our instinct to continue to help our strategic partners attract inward investment seems to be in line with this, but could perhaps be seen differently. Perhaps our idea to create New Generation London House could aim to help foster new networks – political, business, cultural and educational. Can we work together to identify the key know-how factors that London will want to sell post 2012? I am guessing these could be the IBC/MPC at the cutting edge of new digital media, including business models that will work for the small independent producers (where we can anticipate an explosion of creative activity given the increasing accessibility of the technology). What about environmental sustainability and science? Security might seem to be another but is best dealt with elsewhere. These thoughts suggest we might want to use our company networks to pull together the worlds of science, sustainability and education and additionally to sit down with digital media companies to think about what would make London the home for new talent in this industry. What scope is there to use our plan to create a “National Youth Theatre” equivalent for the broadcast and new digital media industry to create content and build relationships that will be useful to visiting broadcasters, and help build links between young Londoners and young people around the world? The volunteering and skills development work of ELBA companies again appears to fit well. We are currently working up ideas around volunteering opportunities that will reinforce East London as a destination and prepare a swathe of company, youth and community volunteers. Thames Water and EDF have pioneered skills academies on site and will develop under the Jobs and Enterprise Board. What about the potential market for business visitors and their expo and conference needs? As part of our work to support the mooted visitor centre at Bow, should we develop a tour that highlights ExCeL and Canary Wharf options? Is there a way to create London’s much talkedabout new conference centre in the Olympic park?
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